This presentation by Taimoon Stewart, Honorary Research Fellow, (University of West Indie) was made during the discussion “Competition & Poverty” held for competition authorities officials on 28 September 2023. More materials on the topic can be found at https://www.oecd.org/competition/latinamerica. This presentation was uploaded with the author’s consent.

1. C O M P E T I T I O N &
P O V E R T Y
L A C C F 2 0 2 3
What Advocacy can
Competition Authorities
Undertake?
Dr. Taimoon Stewart
The University of the West
Indies

2. E X T R E M E P O V E R T Y A N D A D V O C A C Y
• Extreme Poverty: basic needs cannot be met;
• Poverty Reduction:% reduction in the numbers of poor
o both are inter-related and important interventions in the fight against poverty
o one cannot discuss poverty without a discussion of the informal sector
• I provide a profile of poverty and extreme poverty in LAC
• I then interrogate the given thinking in how to address poverty
• I provide a stark view of extreme poverty in Jamaica
• I question whether advocacy by the Jamaica FTC can address this sector
• I provide some recommendations

3. E M P L O Y M E N T I N I N F O R M A L S E C T O R A S % O F T O T A L E M P L O Y M E N T

5. T H E C Y C L E O F P O V E R T Y
Poverty
Trap
Chronic
hunger and
malnutrition
Reduce
school
attendance
& ability to
learn
Child labour
to
supplement
family
income
Children
under 2
endure
permanent
brain
damage
due to
malnutrition
2021:
Hunger in
LAC: 59.7
million
persons
Malnutrition
in LAC:
60 million
persons

6. A P P R O A C H E S TO A D D R E S S P O V E R T Y P R O B L E M
Promote and protect competition – resulting in better prices and quality of goods and services accessed by
poor
This has been proven to benefit the poor and studies show a reduction in the quantum that are living below
the poverty line when there is economic growth.
AND
Take measures to bring businesses operating in the informal sector into the formal sector –increase economic activity
and employment and therefore, economic growth
Benefits that will accrue to poor:
1. Better working conditions
2. Social protection coverage
3. Access to health care
4. Basic income security

7. R E S P O N S E T O G I V E N T H I N K I N G
Obstacles to moving into the formal sector in Jamaica:
• Illiteracy: pay someone to navigate the forms and do applications;
• Two picture ID required: many do not have IDs, Driver’s License, passports;
• Deep distrust of ‘government’ and so don’t have voter ID cards
• No bank accounts: need two IDs. Operate in a cash only economy
• Can only get the lowest level of jobs in the formal sector and benefits are not available in most
cases:
• No health care, social protection, job security and not necessarily better working conditions
o EG of security guards employed as consultants with no benefits by largest security firm in
Jamaica;
o Took employer to court to have their employment moved from contract work to full employment
with benefits. Won case.

8. T H E S T A R K R E A L I T Y O F P O V E R T Y I N J A M A I C A
• Corner shops break packages and sell two slices of bread, 1 sausage out of a tin of six, 2 female sanitary
napkins out of a pack, because the customer can’t afford to buy the whole pack.
• They even sell toothpaste by the squeeze (yes, by the squeeze) because the customer can’t afford a tube.
• Customers of these micro shops do not shop in the formal sector
• Shops do not compete with the formal sector and operate in their own community giving credit to those in
need
• According to the JFTC, there is no competition issue because these shops do not operate in the ‘market’
• The firms are innovative in the ways they serve their customers
• There tools and data used by the commissions do not capture the informal sector and do not allow for market
analysis
• Even those operating on the margins of the formal sector are difficult to persuade to formalize their operations
because they have to see an advantage in doing so, and neither the firms nor the JFTC see such advantage.
• In sum, how can a competition commission engage in advocacy in these circumstances?

9. S O C I A L P R O G R A M M E S T O A L L E V I A T E P O V E R T Y I N J A M A I C A
• Support to school children: rental of schoolbooks, vouchers for lunches, subsidized transport;
• But parents have to purchase school uniforms; pay for rental of books,
• No consumer tax on basic food items
• Subsidized medicines for most prevalent diseases available to all Jamaican citizens
• CASE: Complaint by a pharmacy that the gov’t was engaging in predatory pricing and taking away customers.
Investigated by JFTC which found that
• the subsidized medicines were access only by the poor because of the long waits and inconvenience that those
with means would not endure and turn to private sector
• The poor could not afford to buy from the private sector so there was no trade diversion
• There was no effect on competition in the relevant market. No action taken.
It was fortutious that the economic analysis aligned with a pro-poor choice

10. R E C O M M E N D A T I O N S
• The problem is much larger and more complex than could be solved by promoting competition and
persuading those in the informal sector to formalize their operations
• The JFTC and BFTC were of the view that a more useful intervention would be to target development of
entreneurship skills within the informal sector, not trying to bring the operators into the formal sector
• E.g, address hunger and malnutrition by supporting small & micro farmers by providing them with access
to inputs to agriculture, better roads, access to water etc.
• But this cannot be done by a Competition Commission since outside of their purview : Operations confined
to protecting and promoting competition in formal markets and consumers do benefit with better prices
and quality g & s
• The goals in the law could be expanded to give the CA more scope for pro-poor actions (like South Africa)
• CAs could develop MOUs with relevant government ministries and institutions to allow for a wholistic
approach to the problem (as the DOJ and FTC are doing re labor interventions)