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Cambodia at the Doorstep of International Integration and Economic Reform: Is Competition Policy and Law Needed? By Nuth Monyrath Researcher
Cambodia and its integration • Cambodia has opened its markets to the world and region: • A member of ASEAN in 1999 • A member of WTO in 2003 • E.g. Status of trade liberalization: ranking 35 out of 170 countries (US Heritage Foundation).
Benefits of Liberalization • Better availability of products and services • Better price • Better quality • Better choice
What happen in this liberalized market? • The market is plagued by barriers to market entry: • Complicated business registration • Lack of transparency and accountability (procurement and licensing) • Weak institution and governance (IPs, counterfeit goods, taxes)
What happen in this liberalized market? • The market is plagued by unfair practices: • Conspiracy to limit access to markets/suppliers • Unfair provisions of subsidies • Violation of IPRs • Avoiding labor taxes/regulations
What happen in this liberalized market? • The market is plagued by unfair trade practices (UTPs): a perspective of businessmen, policymakers and consumers • Prevalence of UTPs • Most common UTPs: Raising barriers to entry and collective price-fixing, price discrimination, collusive tendering, and tied selling • UTPs are in important sectors: petroleum, telecommunication, public utility, pharmaceutical products, food and beverage
What happen in this liberalized market? • Explicit examples of UTPs: • Price-Fixing amongst boaters to Siem Riep • Refusal to deal in the telecom market • Anticompetitive acquisitions in the education Sector • Price fixing at provincial level business • Abuse of dominance in the mobile phone service market
Why all these problems happen? • Absence of clear competition policy: lack of transparency and accountability of public institutions (licensing and procurement) • Absence of competition legislation • No independent and autonomous body to control UTPs • Lack of human and financial resources
What are other concerns? • Economic concerns: efficient and fair markets • consumers’ concerns: best choice of products and services available at decent prices and quality • Economic growth of about 10 % (2005) and fair allocation of resources • Poverty reduction: poverty rate at 35% of the total population remains a challenging issue.
Competition law and policy? • There should be clear competition policy and law • Competition law should make exception to SMEs and export oriented enterprises and SOEs • Exception of competition law: technological advancement, protection of SMEs, disadvantaged groups
Motivations for competition policy and law • 1993 Constitution: state intervention to protect markets and consumers • Rectangular strategy: promotion of competition • WTO commitment
The way forward • Policy and Law: appropriate competition policy and legislation • Actions: proper sectoral policies, competent competition authority, effective and efficient and independent judiciary • Capacity buildings: policymakers, judges, prosecutors, lawyers, businessmen, consumers, civil society, academia/media, etc. • Reforms: good governance, transparency and accountable institutions contribute a lot to fair competition in the markets • Voice of consumers: “Consumer protection organization” to protect Cambodian consumers and raise awareness