Rijit Sengupta CUTS International OPENING MEETING IN ZAMBIA 10 th April 2013, Lusaka (Zambia) 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 market B: Well-designed regulatory framework, adequately resourced regulatory institutions & effective actions for promoting fair competition in a market 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 Develop & Test a Methodology to assess efficacy of competition reforms in benefitting consumers and producers Advocate to key actors (National & International) for greater support to competition reforms in DCs 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) guiding process of competition reforms in DCs Demand from elsewhere 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 2 Sectors: Staple Food & Passenger Transport Phase I: Identify competition reforms undertaken in the two sectors (specific markets) across 4 countries and assess benefits/impacts on consumers and producers (Diagnostic Report) – RESEARCH & CONSULTATIONS Phase II: Develop a common methodology for quantifying benefits/impacts of competition reforms in specific markets – DESIGN THE FRAMEWORK & CONSULTATIONS Phase III: Apply methodology in micro-locations in project countries to gather evidence and advocate –ADVOCACY & PUBLIC EDUCATION

4. CREW Project Actors 11 Program Level CREW 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 Identify ‘competition reforms’ undertaken in the two sectors Gather information about specific policies, practices that benefit/impact consumers and producers Identify the specific markets in each of the two sectors for deeper investigation How can such benefits/losses (for consumers and producers in each of the two sectors) be quantified? 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 (Intra-city Transport services) mostly used by ordinary consumers to get to workplace, markets, schools, college/university on daily basis 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) selling staple foods in 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: (a) Indicators of benefits of competition reforms for consumers and producers (b) Evolve a common methodological framework (c) Selection of applicable Methods and Tools

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 Government-Business Forum 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 Thank You