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Nitya NandaCUTS International Jaipur, India
Advocacy and Capacity Building on Advocacy and Capacity Building on Competition Policy and Law in AsiaCompetition Policy and Law in Asia
(7Up2 Project)(7Up2 Project)
Project Synthesis ReportProject Synthesis ReportPreliminary Draft
Structure of the reportStructure of the report
IntroductionPolitical Economy ContextMarket and CompetitionSectoral Regulatory PoliciesConsumer Protection and CompetitionAnticompetitive PracticesPerspectives on Competition PolicyConclusion
IntroductionIntroduction - Objectives - 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 - MethodologyIntroduction - MethodologyTwo Pillars: Research and advocacyCountry research partnersResearch: Secondary information, empirical/case study and some field surveysAdvocacy: NRG, Training, Dialogues etc.This Report: A Synthesis Country reports – five countries NRG meetings and the review meeting,
other secondary sources
Political Economy ContextPolitical Economy Context
Four least developed countries, one developing countryLargest LDC and one of the smallest LDCsHistory of centrally planned command and control type, one-party ruleDemocracy – emergingLandlocked and hillyEndowed with huge rivers and water bodiesPopulation: 144m in Bangladesh to 6m in Lao PDR
Per Capita IncomePer Capita Income
0
100
200
300
400
500
600
Bangladesh Cambodia Lao Nepal Vietnam
Pe
r C
apit
ia In
com
e in
US
$
GDP Growth Rate (2000-2004)GDP Growth Rate (2000-2004)
0
1
2
3
4
5
6
7
Growth Rate 5.973706672 5.69738144 6.441826867 5.291787292 3.469501634
Lao Cambodia Vietnam Bangladesh Nepal
Economic Structure Economic Structure ((Percentage share)Percentage share)
0
10
20
30
40
50
60
70
80
90
100
Lao,PDR Nepal Bangladesh Cambodia Vietnam
Agriculture Industry Services
The Year 1986The Year 1986
Bangladesh: The Industrial Policy, 1986Lao: November, Fourth Congress of LPRP - New Economic MechanismVietnam: December, 6th Congress of CPV, Doi MoiCambodia: 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?What Else Happened?
February 1986 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 PolicyTrade Policy
Bangladesh: WTO, SAARC and BIMSTECCambodia: WTO (2003), ASEAN (1999)Nepal: WTO (2003), SAARC, BIMSTEC, IndiaLao PDR: ASEAN (1997) Vietnam: ASEAN (1995), US (2000)
Size of MarketsSize of Markets(GDP in PPP $bn)(GDP in PPP $bn)
258
28
10
35
202
0 50 100 150 200 250 300
Bangladesh
Cambodia
Lao PDR
Nepal
Vietnam
Trade OpennessTrade Openness((Figures in $bn)Figures in $bn)
Countries Exports Imports Trade (Exp+Imp)
GDP Openness = (Trade/GDP)
X 100
Bangladesh 7.478 10.03 17.508 56.8 25.75
Cambodia 2.311 3.129 5.44 4.597 118.35
Lao PDR 0.365 0.579 0.944 2.412 39.14
Nepal 0.737 1.8 2.537 6.7 37.87
Vietnam 23.72 26.31 50.03 44.0 113.70
Products with high Products with high concentrationconcentration
Country Products
Bangladesh Toiletries, tobacco, pharmaceuticals, cement
Cambodia Tobacco
Lao PDR Cement, beer, tobacco, motorcycle
Nepal Cement, sugar, iron & steel, paper, dairy products
Vietnam Tobacco (cigarettes), beer, soft drinks, cement, petroleum products, steel, sugar, fertiliser, automobiles, motorcycles
*Based on available information only. There can be several other products with high market concentration
Cost of starting businessCost of starting business
Countries No of procedures
Duration (days)
Cost (US$)
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 BarriersSome Notable Barriers
Saturated industry: BangladeshApproval 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 IssuesSome Regulatory IssuesInadequate or no regulationRegulators are usually not “independent”Independent regulatory agencies often have potential problems -"regulatory capture" by other groupsAnd industry capture can undermine the effectiveness of regulationWeakness of the overall administration systemLow sophistication level of policy-making skills
Consumer ProtectionConsumer Protection
Nepal and Vietnam have enacted statutes, but implementation…Nepal Consumer Protection Law has competition provisions, while Vietnam Competition Law has consumer protection provisionsBangladesh and Lao PDR are considering their draft lawsCambodia ??
Level of AwarenessLevel of Awareness(percentage of unaware)(percentage of unaware)
Prevalence of anticompetitive Prevalence of anticompetitive practicespractices
Need for competition lawNeed for competition law
Objective of competition lawObjective of competition law
ConclusionConclusion
Thomas Jefferson, "The price of freedom is eternal vigilance." - price of free market is eternal regulatory vigilance. Regulatory bodies are important components of social infrastructureAppropriate regulatory framework is a development requirement.Independence, accountability, conflict of interests
Conclusion (contd.)Conclusion (contd.)
Business opposition: Genuine or government alibi?Desired outcomes - complement by consumer protection regulatory lawsHybrid law or agency for small countries - paucity of financial and human resources, inter-sectoral learning, resolving interface problemsConsumer lobby is almost non-existentCapacity building of the regulators, policy makers and other stakeholders