Market power in Guyana is not properly regulated

Dear Editor,
The free market operates best when there are no barriers to entry and exit, and its operation is characterized by large numbers of participants. When these conditions do not exist in an industry, regulation is necessary to prevent suppliers of that industry from usurping consumer surplus, an economic concept of excesses accruing from pricing of total demand instead of each individual demand incrementally; which, as the name implies, rightfully belongs to the consumer.
There are blatant cases of this occurring in Guyana, despite regulatory bodies being in place to prevent their occurrence. Let’s start with the airline industry.
This industry definitely needs to be regulated, as the barrier to entry is the high cost of capitalization for suppliers. It is quite similar to, say, the electric utility industry, which requires large and costly doses of capital to operate. Not many can afford to participate. But this industry escapes regulation. Consequently, the fare to travel to, say, Barbados from Guyana is the same to travel to New York, as if distance is without cost.
But that is not enough for these greedy companies. After prices are established at already high levels, as reservations take place, the companies increase prices for the remaining seats: the confiscation of consumer surplus. In a case known to the writer, the price of a seat to a Caribbean destination increased by US$30 during the few minutes it took to complete the reservation.
But even when regulation exists, as in the banking industry, regulators don’t seem to understand their role. Part of the problem is the skillset of these regulators. One cannot regulate an industry without a sound understanding of price theory, or microeconomics; but that is not a requirement. Consequently, some industries, such as the banking industry, are allowed to set fees for services that have no bearing on their costs, prompting a former Finance Minister to complain about ATM withdrawal fees banks charge, which have depositors agonizing over the high fees to make an electronic transfer from one account to another within the same bank. For one bank, this fee is $1,000 per transaction, and this is obviously “manufactured”, with no relationship to costs. Is this known to the regulator? And if not, why not?
When weak regulation exists, or no regulation at all, for industries with market power, consumers are ripped off. It is time that these industries be identified; placed under appropriate regulation, and by regulators who understand their roles and are competent to carry out their responsibilities. Stop unfairly enriching companies and their shareholders at the detriment of consumers.

Louis Holder