FRAMEWORK FOR COMPETITION REFORMS (FCR) Rijit Sengupta CREW NRG-II Meeting 27th June, Lusaka (Zambia)

OUTLINE Background Competition Reforms & FCR Preparatory Work Components of FCR Process in CREW Countries

Background “If countries eliminated policies and practices that distort competition, they could grow rapidly”, Power of Productivity, William W Lewis (2004) Many DCs/LDCs have adopted competition laws in last decade However implementation remains limited Policies affect competition, markets remain concentrated and anti-competitive practices prevail Benefits of competition don’t accrue to consumers, producers Low level of understanding and attention of key stakeholders Benefits of introducing competition reforms needs to be demonstrated

Competition Reforms Components of Competition Reforms: Enabling government policies Well-designed regulatory framework Functional competition regime (policy/law/agency)

What is FCR? Framework for Competition Reforms (FCR) A method to explain how to plan, execute, evaluate & rectify competition reforms in key sectors (ii) To help key stakeholders appreciate benefits of competition reforms on consumers, producers (iii) Lead to greater attention to the issue as part of economic planning and reforms in DCs (iv) Developed for specific sector/market

FCR Preparatory Work Need of a ‘competition champion’ to lead the process Formation of a CRFT (small but decisive group) Identify ‘need for competition reforms’ Identify the sector/market to be reformed and why?

Components of FCR Planning Executing Evaluating Rectifying

FCR Planning Identification of policies, legislations, statues, programmes, practices to be assessed (based on the ‘Need for Reforms’) Setting specific objectives of this assessment (consumer and producer benefits) Selection of Indicators of consumer and producer benefits A ‘stakeholder mapping’ exercise Development of an ‘analytical plan’ for collection of data, analysis and interpretation of results Allocation of responsibilities to different members of CRFT

FCR Executing Assess how components of competition reforms are ingrained in selected policies, legislations, statues, programmes, practices in selected sectors Narrow down to specific reforms from the above, that seem to lead to pro-competitive and/or anti-competitive outcomes Assess current levels of consumer and producer welfare, as well as prevailing concerns vis-à-vis selected reforms Attempt linking consumer/producer benefit/welfare/concerns with above-mentioned set of reforms, over time Record suggestions from consumers, producers and other key stakeholders for refinements

FCR Evaluating Analyse secondary literature/information and primary data Measure current and estimate future impacts of the identified policies and practices on consumers and producers – using specified scientific tools Identify political economy constraints in sectors Generate a body of evidence, to be used in advocating for reviewing the selected reforms through an inclusive and transparent multi-stakeholder process Develop a plan for using the evidence

FCR Rectifying Review and discuss impacts of reforms on consumers and producers in selected markets/sectors in light of the evidence Plan a process for initiating ‘corrective measures’ Develop a M&E framework to periodically assess and report consumer and producer benefits to stakeholders once these ‘corrective measures’ are taken.

Process in CREW Countries Development of outline and drafting FCR Indigenisation of FCR based on country scenario by partners Incorporation of stakeholders’ views to make adjustments Draft sector specific FCR in countries Draft FCR shared with NRG members in NRG-III and finalised for each of two sectors Used to elicit interest among government/stakeholders for FCR in other sectors

NRG-I Meeting, Lusaka

Thank You www.cuts-ccier.org/CREW rsg@cuts.org