Rijit Sengupta CUTS International OPENING MEETING IN GHANA 7 th May 2013, Accra (Ghana) Overview of the CREW Project Competition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries

Outline 2 Introduction About the Project Project Phases Country-Level Activities & Timeline

3 I. INTRODUCTION

1. Linking Competition with Welfare in DCs 4 Competition can promote consumer and producer/business welfare – not much doubt Competition not an end in itself, but a means for achieving developmental goals CUTS experience on competition research, advocacy and outreach in over 30 countries of Africa & Asia Presence of competition law not adequate, developing countries need to embrace a comprehensive approach - competition reforms However, DCs suffer from various challenges: - Government support often meager - Limited stakeholder awareness & understanding - Development partners’ priorities - Etc.

2. What is Competition Reforms? 5 Competition reforms = A + B + C A: Enabling government policies designed to facilitate a level playing field (fair competition) in a sector B: Well-designed regulatory framework, adequately resourced regulatory institutions & effective actions for promoting fair competition in a sector C: Well defined competition legislation and effective enforcement mechanisms

3. Motivation of the CREW project 6 A story from Kenya: Cane farmers laud increased competition in sugar sector

7 II. ABOUT THE PROJEC T

1. Goal & Objectives 8 Goal To better demonstrate measurable benefits from effective competition reforms in DCs, for ensuring long-term support for competition Objectives Enhance understanding of benefits from competition reforms in DCs (consumers & producers) Develop & test a methodology to assess efficacy of competition reforms in benefitting consumers and producers in specific markets Advocate to key actors (National & International) for greater support to competition reforms in key markets Sustain momentum on competition reforms and take it forward

2. Outputs & Outcome 9 Outputs Documented evidence of benefits from competition reforms in key markets Dialogues involving multiple stakeholders on benefits of competition reforms in DCs Strategy for capacity building of DC competition agencies and sector regulators Framework (Tool) for monitoring and evaluating the process of competition reforms in DCs Demand from elsewhere (other sectors and/or countries) for similar exercise Outcome Greater attention and impetus for competition reforms in key DC markets resulting in consumer and producer benefits

3. Implementation Plan 10 4 Countries: Ghana, India, The Philippines & Zambia 2 Sectors: Staple Food & Passenger Transport Phase I: Assess implications of competition reforms in specific markets; and estimate possible benefits of potential reforms (Diagnostic Report) – RESEARCH & CONSULTATIONS Phase II: Design a composite methodology to quantify (actual & potential) benefits of competition reforms using existing (ex-post & ex-ante) methods – DESIGN & CONSULTATIONS Phase III: Test the veracity of this methodology in micro- locations (four project countries); and use results for advocacy – ADVOCACY & PUBLIC EDUCATION

4. Project Actors 11 Program Level Implementation Team Project Advisory Committee (PAC) Country Level Country Partner Organisation National Reference Group (NRG) National Entities: Competition/Sector Regulator, Business Associations, Research Organisation/CSO, Media

12 III. PROJECT PHASES

1. PREPARATORY ACTIVITIES 13 Planning Meeting (8-9 November 2012, Bonn) Background Paper Identification of Project Advisory Committee (PAC) Inception Meeting (13-14 March 2013, Jaipur) Selection of Project Countries Selection of Sectors Country-specific research in Sectors Identification of partners and NRG members in countries

2. PHASE I Activities Diagnostic Phase (RESEARCH & OUTREACH/CONSULTATIONS) 14 Fact Finding Mission to better acquaint with countries/sectors Identify specific markets in the two sectors for deeper investigation Gather information about benefits of competition reforms (policies and practices) for consumers and producers Identify existing ‘competition concerns’ and determine reform possibilities to address them Create a check-list of used and existing methods for quantifying consumers and producers benefits in markets Collate experience from four countries for each sector - inputs for the design phase (Phase-II)

3. Evidence of Benefits or the lack of it 15 STAPLE FOODPASSENGER TRANSPORT CONSUMER WELFARE Availability of good quality staple food at right prices for ordinary consumers Availability of good quality transport services to ordinary consumers at right prices within city (intra-city) to get to workplace, markets, college/university on a daily basis & also on busy inter-city routes PRODUCER WELFARE Participation of private entities in procurement, storage and distribution of staple food and how they benefit Right price and fair terms for producers (and their groups) in : both inputs and outputs markets Ease of entry of ‘new players’ (an operator) in a specific geographic market for providing such services Fare and terms of service in case of Inter- city Transport services for small traders travelling to nearest market town to sell their produce

4. Programme Logic (Phase-I) 16

5. Phase II Design Phase [DESIGN THE FRAMEWORK (with METHODS/TOOLS) & CONSULTATIONS] 17 Draw Inputs from the Diagnostic Phase (for preparing 2 sectoral frameworks) in terms of: Indicators of benefits of competition reforms for consumers and producers Applicable Tools/Methods to measuring these indicators Evolving a common (yet flexible) methodological framework using applicable tools/methods Getting stakeholder feedback in each country on the methodology for aligning it with country-specific condiions

6. Benefits of competition reforms for Consumers (Possible Indicators) 18 Access: Goods and services reach consumers in areas where they were not available earlier Quality: Quality of goods and services enhanced by firms to attract customers Choice: New firms/products enter otherwise ‘concentrated’ markets Price: Prices are reduced in a ‘contestable market’ Time savings by consumers

7. Benefits of competition reforms for Producers (Possible Indicators) 19  Access to essential services: Firms can easily access infrastructure networks, etc.  Free movement of goods & services: Mobility not affected by policies, practices (inputs & outputs)  Predictability of regulatory actions: Legislations enforced by autonomous yet accountable institutions

7. Benefits of competition reforms for Producers (Indicators) 20  Cost savings: Effective implementation of strategies to reduce costs, e.g. improved application of ICT tools  Fair market processes: Easy entry and exit in markets; considerable ‘ease of doing business’  Level-playing field: principle of ‘competitive neutrality’ is observed  Transparency in market: Well laid out policies and predictable implementation processes (market regulators)

8. Phase III: Validation Phase (MICRO-LEVEL TESTING, ADVOCACY & PUBLIC EDUCATION) 21 Research: (a) competition distorting policies & (b) impact of ACPs on producers, consumers Parliamentary outreach and discussions regarding tangible benefits of competition reforms Government-Business Forum to build consensus for reforms Media (information) campaign Training Workshop for CAs and Sector Regulators - Enhance enforcement capacity (based on market studies) - Highlight need for coordination of actions (CA + SR) National Orientation Workshop (other sectors) - Expanding support for competition reforms - Better buy-in (other sectors)

22 Medasi!