Download Nitya Nanda

Advocacy and Capacity Building on
Competition Policy and Law in Asia
(7Up2 Project)
Project Synthesis Report
Preliminary Draft
Nitya Nanda
CUTS International
Jaipur, India
Structure of the report
Introduction
Political Economy Context
Market and Competition
Sectoral Regulatory Policies
Consumer Protection and Competition
Anticompetitive Practices
Perspectives on Competition Policy
Conclusion
Introduction - Objectives
Establishment of structures/actors able
to advocate efficiently
Developments/changes in competition
law and policy
Establishment of enhanced training
facilities in the country
Development of a dialogue between
consumer groups and government
officials.
Introduction - Methodology
Two Pillars: Research and advocacy
Country research partners
Research:
Secondary
information,
empirical/case study and some field
surveys
Advocacy: NRG, Training, Dialogues etc.
This Report: A Synthesis


Country reports – five countries
NRG meetings and the review meeting,
other secondary sources
Political Economy Context
Four least developed countries, one developing
country
Largest LDC and one of the smallest LDCs
History of centrally planned command and
control type, one-party rule
Democracy – emerging
Landlocked and hilly
Endowed with huge rivers and water bodies
Population: 144m in Bangladesh to 6m in Lao
PDR
Per Capita Income
Per Capitia Incom e in US$
600
500
400
300
200
100
0
Bangladesh
Cambodia
Lao
Nepal
Vietnam
GDP Growth Rate (2000-2004)
7
6
5
4
3
2
1
0
Grow th Rate
Lao
Cam bodia
Vietnam
Bangladesh
Nepal
5.973706672
5.69738144
6.441826867
5.291787292
3.469501634
Economic Structure
(Percentage share)
The Year 1986
Bangladesh: The Industrial Policy, 1986
Lao: November, Fourth Congress of LPRP - New
Economic Mechanism
Vietnam: December, 6th Congress of CPV, Doi Moi
Cambodia: Hun Sen became the Prime Minister and
the First Five-Year Program of Socio-economic
Restoration and Development (1986-90) started
Nepal: Assembly elections (pro-democracy sweep),
Structural Adjustment Facility (SAF) programme
with the IMF, bilateral textile agreement with the
US
What Else Happened?
February 1986
27th Congress of the Communist Party
of Soviet Union



"Perestroika" (restructuring and socialist
democracy)
"Glasnost" (openness and flexible system of
economic management)
Rapid transition to communism?
Trade Policy
Bangladesh: WTO, SAARC and BIMSTEC
Cambodia: WTO (2003), ASEAN (1999)
Nepal: WTO (2003), SAARC, BIMSTEC,
India
Lao PDR: ASEAN (1997)
Vietnam: ASEAN (1995), US (2000)
Size of Markets
(GDP in PPP $bn)
202
Viet nam
Nepal
35
Lao PDR
10
28
Cambodia
258
Bangladesh
0
50
100
150
200
250
300
Trade Openness
(Figures in $bn)
Countries
Exports Imports
Trade
GDP Openness =
(Exp+Imp)
(Trade/GDP)
X 100
Bangladesh
7.478
10.03
17.508
56.8
25.75
Cambodia
2.311
3.129
5.44
4.597
118.35
Lao PDR
0.365
0.579
0.944
2.412
39.14
Nepal
0.737
1.8
2.537
6.7
37.87
Vietnam
23.72
26.31
50.03
44.0
113.70
Products with high concentration
Country
Products
Bangladesh
Toiletries, tobacco, pharmaceuticals, cement
Cambodia
Tobacco
Lao PDR
Cement, beer, tobacco, motorcycle
Nepal
Cement, sugar, iron & steel, paper, dairy
products
Vietnam
Tobacco (cigarettes), beer, soft drinks, cement,
petroleum products, steel, sugar, fertiliser,
automobiles, motorcycles
*Based on available information only. There can be several
other products with high market concentration
Cost of starting business
Countries
No of
procedures
Duration
(days)
Cost
(US$)
As
proportion
of PCI
Bangladesh
8
35
352.86
0.896
Cambodia
11
94
1550.50
4.58
Lao PDR
9
198
61.82
0.159
Nepal
7
21
183.83
0.759
Vietnam
11
56
136.07
0.258
Hong Kong
5
11
824.77
0.030
USA
5
5
210.00
0.00528
Singapore
7
8
261.65
0.011
India
11
89
264.59
0.413
Some Notable Barriers
Saturated industry: Bangladesh
Approval of a state-owned enterprise:
Cement (Vietnam), Electricity (Nepal)
Regulations at sub-national and local
levels: Preah Vihear (Cambodia)
Government
licence
not
enough:
Bangladesh, Nepal
Some Regulatory Issues
Inadequate or no regulation
Regulators are usually not “independent”
Independent regulatory agencies often
have potential problems -"regulatory
capture" by other groups
And industry capture can undermine the
effectiveness of regulation
Weakness of the overall administration
system
Low sophistication level of policy-making
skills
Consumer Protection
Nepal and Vietnam have enacted
statutes, but implementation…
Nepal Consumer Protection Law has
competition provisions, while Vietnam
Competition
Law
has
consumer
protection provisions
Bangladesh
and
Lao
PDR
are
considering their draft laws
Cambodia ??
Level of Awareness
(percentage of unaware)
Prevalence of anticompetitive practices
Need for competition law
Objective of competition law
Conclusion
Thomas Jefferson, "The price of
freedom is eternal vigilance." - price of
free market is eternal regulatory
vigilance.
Regulatory
bodies
are
important
components of social infrastructure
Appropriate regulatory framework is a
development requirement.
Independence, accountability, conflict
of interests
Conclusion (contd.)
Business
opposition:
Genuine
or
government alibi?
Desired outcomes - complement by
consumer protection regulatory laws
Hybrid law or agency for small countries
- paucity of financial and human
resources,
inter-sectoral
learning,
resolving interface problems
Consumer lobby is almost non-existent
Capacity building of the regulators,
policy makers and other stakeholders