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Overview of the CREW Project Competition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries. CUTS International Opening Meeting in Philippines 7 th May, 2013. Outline. Introduction About the Project Project Phases Country-Level Activities & Timeline.

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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

outline
Outline
  • Introduction
  • About the Project
  • Project Phases
  • Country-Level Activities & Timeline
1 linking competition with welfare in dcs
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.

2 what is competition reforms
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

3 motivation of the crew project
3. Motivation of the CREW project

A story from Kenya: Cane farmers laud increased competition in sugar sector

1 goal objectives
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

2 outputs outcome
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

3 implementation plan
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

4 project actors
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

1 preparatory activities
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

2 phase i activities diagnostic phase research outreach consultations
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)

5 phase ii design phase design the framework with methods tools consultations
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

6 benefits of competition reforms for consumers possible indicators
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
7 benefits of competition reforms for producers possible indicators
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

7 benefits of competition reforms for producers indicators
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)

8 phase iii validation phase micro level testing advocacy public education
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)

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Thank You

www.cuts-ccier.org/CREW

rsg@cuts.org