CUTS International Opening Meeting in Philippines 7 th May, 2013

1. Overview of the CREW ProjectCompetition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries CUTS International Opening Meeting in Philippines 7thMay, 2013

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

3. I. INTRODUCTION

4. 1. Linking Competition with Welfare in DCs Competition can promote consumerandproducer/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.

5. 2. What is Competition Reforms? 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

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

7. II. ABOUT THE PROJEC T

8. 1. Goal & Objectives 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

9. 2. Outputs & Outcome 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

10. 3. Implementation Plan 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 Countries: Zambia, Ghana, India, The Philippines 2 Sectors: Staple Food & Passenger Transport

11. 4. Project Actors Program Level at the Head Quarters 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

13. 1. PREPARATORY ACTIVITIES 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

14. 2. PHASE I Activities Diagnostic Phase(RESEARCH & OUTREACH/CONSULTATIONS) 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)

15. 3. Evidence of Benefits or the lack of it

16. 4. Programme Logic (Phase-I)

17. 5. Phase IIDesign Phase[DESIGN THE FRAMEWORK (with METHODS/TOOLS) & CONSULTATIONS] Draw Inputs from the Diagnostic Phase (for preparing 2 sectoral frameworks) in terms of: Indicators of benefits of competition reforms for consumers and producers Evolve a common methodological framework Selection of applicable Methods and Tools

18. 6. Benefitsof competition reforms for Consumers(Possible Indicators) • 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

19. 7. Benefitsof competition reforms for Producers(Possible Indicators)  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

20. 7. Benefitsof competition reforms for Producers(Indicators)  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)

21. 8. Phase III: Validation Phase(MICRO-LEVEL TESTING, ADVOCACY & PUBLIC EDUCATION) Research: (a) competition distorting policies & (b) impact of Anti-Competitive Practices (ACPs) on producers, consumers Parliamentary outreach and discussions Government-Business Forum Media (information) campaign Training Workshop for Competition Authorities (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 www.cuts-ccier.org/CREW rsg@cuts.org