Part I — The regulatory shift
Fiji’s economy has changed.
Our regulatory posture has not.
The Fijian Competition and Consumer Commission (FCCC) operates in a small, highly constrained economy where many essential services function under structural concentration, including natural monopoly conditions and limited entry. This is a recognised feature of small island economies with limited market scale and high fixed costs (World Bank, 2014; Asian Development Bank, 2016–2024).
That context matters.
In structurally concentrated economies, regulatory design plays a disproportionate role in shaping household costs, resilience, and long-term affordability (OECD, 2014; World Bank, 2004). In small economies with limited redundancy, a single ownership or structural decision can shape household outcomes for generations (IMF, 2016).
When markets are narrow by design, reactive regulation is not enough.
Intervening only at the point of price approval or tariff review means households encounter regulation after costs have already risen and options have already disappeared. By then, leverage is gone. Economic literature consistently distinguishes between ex-post price regulation and ex-ante structural regulation, with the latter shown to be more effective in concentrated markets (OECD, 2014; Stiglitz, 2008).
Price controls and margin setting address symptoms, not causes. They ask whether a price increase is justified, but often leave unexamined the upstream conditions that make price pressure predictable in the first place: access constraints, entry barriers, policy settings, and structural dependencies.
This is not a criticism of enforcement.
It is a question of regulatory focus.
In today’s economic environment, effective regulation must extend beyond managing outcomes to shaping conditions. That means moving upstream – toward diagnosing bottlenecks, identifying policy-induced constraints, and examining how market design itself limits consumer choice (OECD, 2018).
In sectors such as electricity, where households have limited practical ability to self-supply or switch providers, price regulation inevitably carries a heavier burden than it would in a more open system. While decentralised and self-supply options increasingly exist, they are not always enabled at scale through market design, access arrangements, or institutional incentives. Where credible alternatives remain constrained, regulation shifts from a backstop to the primary line of defence – a dynamic widely observed in natural monopoly utilities (World Bank, 2014).
Where access is restricted, prices rise.
Where alternatives are blocked, costs harden.
Where households cannot produce, substitute, or exit, affordability becomes a permanent challenge.
For households, this is the difference between having a way out when costs rise – or having no choice but to pay.
These are not failures of individual firms.
They are structural realities, and they require structural responses.
The effectiveness of regulation should therefore be judged not only by whether prices are moderated, but by whether people are given meaningful options. The ultimate test of regulation is not whether prices are capped, but whether consumers have credible alternatives when prices rise – an approach increasingly emphasised in modern competition policy (OECD, 2011; European Commission, 2004).
In practical terms, a regulator succeeds when households can choose, substitute, self-supply, or exit – not when they are merely protected after costs increase.
This evolution does not require a new mandate.
It requires a broader application of the existing one.
Rather than focusing primarily on downstream price outcomes, modern regulation should increasingly ask:
• Why is entry limited?
• What prevents decentralised participation?
• Which rules or structures unintentionally entrench dependency?
• Where can consumer agency be expanded without compromising system stability?
This is not about deregulation.
It is about better regulation.
Part II — What happens when structure is ignored
This shift in regulatory thinking has its most consequential application not at the tariff table, but at the point of ownership.
FCCC is not only a price regulator. It is also Fiji’s statutory authority for mergers and acquisitions (M&A) under the FCCC Act. In a small, structurally concentrated economy, ownership decisions often matter more than pricing decisions because they lock in incentives, financing logic, and household exposure for decades (World Bank, 2017; IMF, 2018).
This is not an argument against investment or partnership. Small economies will always require external capital. The issue is not whether capital enters – but whether it enters on terms that preserve long-term public choice.
In monopoly-like sectors, acquisitions are not neutral transactions. They permanently reshape governance logic and constrain future policy space.
Across infrastructure, utilities, and public services subjected to long-term financing arrangements, a repeatable pattern has emerged (OECD, 2005; UNCTAD, 2021):
1. Entry through partnership
Joint structures are formed under the language of reform, efficiency, and risk-sharing, often with explicit or implicit state backing (World Bank, 2017; Asian Development Bank, 2023).
2. Financial structuring
Debt and contractual obligations are layered onto the institution, with returns prioritised through fees and distributions ahead of long-term service value (OECD, 2005; Lazonick, 2014).
3. Operational pressure
Maintenance is deferred, staffing rationalised, and service quality tightens – creating justification for restructuring or higher charges (World Bank, 2004; OECD, 2018).
4. Public absorption of risk
As disruption becomes socially or politically costly, the state is compelled to approve tariff increases or inject support because failure has become “too costly” (IMF, 2018).
5. Orderly exit
With cashflows stabilised and valuation enhanced, investors exit. The public retains liabilities, constrained services, and reduced policy flexibility (UNCTAD, 2021; OECD, 2005).
This sequence is not driven by malice.
It is driven by structure and incentives.
Electricity illustrates this dynamic clearly. Once long-term capital is embedded in a monopoly utility such as Energy Fiji Ltd, future pricing outcomes become structurally constrained by sunk costs, financing terms, and return expectations. Public consultations may influence timing or sequencing, but they cannot unwind exposure created at the point of ownership and financing design – a well-documented outcome in global utility regulation (World Bank, 2014; OECD, 2018).
Dividend distributions provide concrete evidence of how return expectations are operationalised once capital is embedded. In 2022, EFL declared and paid $F46.61million in dividends to shareholders, nearly doubling the $F20.04million paid in 2021, and in 2023 paid a further $F40.68million (Energy Fiji Ltd, 2022; Energy Fiji Ltd, 2023). While dividend payments are standard corporate practice, these figures illustrate how revenue recovery becomes an embedded feature of the system, reinforcing pricing pressure independently of tariff review processes.
Recent debates around electricity tariffs and healthcare affordability further illustrate how limited household exit options magnify the impact of structural decisions made years earlier (World Bank, 2014; OECD, 2018).
In healthcare, this dynamic is even more pronounced. Around 80–85 per cent of patients in Fiji are treated for non-communicable diseases – conditions widely recognised as largely preventable through upstream interventions in diet, physical activity, and the built environment (World Health Organization, 2022; Fiji Ministry of Health, 2023). Yet policy emphasis remains overwhelmingly downstream, focused on expanding clinical capacity rather than reducing incidence (WHO, 2019; World Bank, 2021).
The result is predictable. Preventable disease accumulates, treatment demand escalates, and costs harden into permanence. Hospitals expand, budgets grow, and households face rising financial pressure – not because illness is unavoidable, but because prevention remains structurally under-prioritised (OECD, 2020; WHO, 2019).
This mirrors the pattern seen in other essential services: when systems fail to act early, they become locked into managing consequences at far higher cost. Healthcare spending, like energy tariffs, increasingly becomes a function of upstream design choices made years earlier (World Bank, 2014; IMF, 2018).
Until prevention is treated as core infrastructure rather than an adjunct, healthcare policy will continue to treat symptoms while reproducing the conditions that generate them (WHO, 2019; UNDP, 2020).
This brings into focus what remains open – and urgent: the future of Fiji’s remaining state-owned enterprises.
Government has signalled interest in selling stakes in public assets reportedly valued at around $100million. On paper, such transactions support fiscal objectives. In practice, the trade-off is asymmetric: assets are sold once, while citizens pay indefinitely through tariffs, fees, and service charges tied to essential services (OECD, 2005; World Bank, 2004).
At this stage, FCCC’s merger and acquisition role becomes central – not as a transactional reviewer, but as the last effective checkpoint where long-term household exposure can still be shaped.
A simple regulatory test should apply:
Does this transaction expand consumer exit options over time – or does it permanently narrow them?
Vigilance matters because these decisions are effectively one-way gates. Once ownership structures mature and contracts harden, the cost of correction multiplies. What can be prevented cheaply today must be rescued expensively tomorrow (IMF, 2016; OECD, 2018).
Conclusion — The last preventive moment
The central regulatory question is no longer whether prices can later be managed.
It is whether ownership and market-structure decisions made today will leave households permanently exposed tomorrow.
Regulation that intervenes late can only soften outcomes.
Regulation that intervenes early can change trajectories – a core principle of modern competition policy and merger control (OECD, 2011; European Commission, 2004).
This places FCCC’s role – particularly its merger and acquisition function – at the centre of modern consumer protection. Not as a price referee, but as the last institutional safeguard before structural dependency hardens.
That is where regulation must increasingly focus: upstream, where real choices still exist.
The shift required is clear – from price policing to power transfer; from managing dependency to enabling exit.
When regulation arrives after prices rise, it manages damage.
When it arrives before structures harden, it protects freedom.
Because in today’s Fiji, resilience – not reactive price control – is the only form of consumer protection that lasts.
