Nitya Nanda CUTS International Jaipur, India Advocacy and Capacity Building on Competition Policy and Law in Asia (7Up2 Project) Project Synthesis Report Advocacy and Capacity Building on Competition Policy and Law in Asia (7Up2 Project) Project Synthesis Report Preliminary Draft

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

GDP Growth Rate ( )

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 ( ) 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 th 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)

Trade Openness ( Figures in $bn)

Products with high concentration

Cost of starting business

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