VANUATU LAWMAKERS QUESTION UTILITY MONOPOLIES

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By Ricky Binihi

PORT VILA, Vanuatu (Vanuatu Daily Post, March 23) – Vanuatu Finance Minister Willy Jimmy told Parliament Tuesday that the government is considering debating a council paper on the monopolies enjoyed by telecommunications company Telecom Vanuatu Limited and power company UNELCO [Union Electrique du Vanuatu ] Vanuatu Limited but has been the frustration of many users for many years.

[PIR editor’s note: Unelco Vanuatu Limited is a subsidiary of French company Elyo Energy Services.]

Minister Jimmy was responding to a question raised by the deputy leader of Opposition Moana Carcasses after Minister Jimmy delivered a statement on the Millennium Challenge Account when the subject of the monopoly was raised.

A council paper is now being prepared to go before the Council of Ministers for the government to discuss the possibility of establishing a regulatory body to oversee the affairs of telecommunications and power in Vanuatu.

Many critics of the power and telecommunications monopoly, which the government has given Unelco and Telecom, argue that if the government is serious about growing the economy it must first break open the power and telecommunications market. They claim that the high cost of power and telecommunication in Vanuatu is not a business incentive for many investors who want to set up factories here.

Recently the government opened up the market for commodities like kava and copra so that the Vanuatu Commodities Marketing Board was not the sole exporter of these products. The rationale behind the government decision to lift the monopoly it gave Vanuatu Commodities Marketing Board is to promote competition so that, when there is competition, farmers are expected to win more – as they now have an option to sell their produce to the highest bidder.

The same reasoning can be made also for Telecom and Unelco, but no government since 1980 has been able to break the power and telecommunications monopoly, thus making it very difficult to do so today. Critics of monopoly say that one of the good aspects of living in a democratic country like Vanuatu is that you have your freedom of choice. But for many Unelco and Telecom customers in Vanuatu, they do not have "freedom of choice" if they are not happy with the service they are getting. Many successive governments have promised to break the monopoly but they have never lived up to their promises.

March 24, 2006

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