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About CUTS CITEE CART CHD C-SPAC CUTS-ARC Contact CUTS
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COMPARATIVE STUDY OF COMPETITION REGIMES IN SELECT DEVELOPING COUNTRIES OF THE COMMONWEALTH (Revised 2001.03.05) 1. BACKGROUND
1. BACKGROUND 1.1 A good competition law and policy is a concomitant requirement for any market-based reforms. In as much as reforms are brought about to rein in unnecessary command and control measures, a competition law ensures the promotion of a sound market, which is not exploited by dominant businesses. A competition law promotes competition, whereby it buttresses consumer welfare and economic efficiency. Importantly it also enables the government to keep a check on concentration of economic power 1.2 On the other hand the current phase of globalisation and liberalisation is adding newer and complex definitions to the definition of market structures, concentration etc and pushing the authorities to redefine concepts like dominance and abuse of dominance. Furthermore, the advent of World Trade Organisation has added new dimensions to the scenario. 1.3 Since the time the WTO took up the examination of the interaction between trade and competition policy in 1997, much interest has been raised in several countries. At that time 1995 only about 50 countries had a competition regime which is currently estimated as 80 countries. Secondly there has been a pressure from both the multilateral institutions, in cases such as Indonesia, and internally to draft new and effective competition laws, such as UK and India. 1.4 It is one thing to have a competition law and another to have an effective competition law. The effectiveness of a law is dependent on several factors: drafting, control, budget, independence, research and investigation support etc. The overall policy environment of the country also matters substantially. Thus the purpose of regulation of markets in favour of consumers and economic efficiency is defeated, which affects the overall economic development of the country. 1.5 In order to establish
what is the best way forward for developing countries to have effective
competition laws, it is necessary to learn from their own experiences.
Sharing the same will also help them to overcome the drawbacks, which prevent
them from having a good and effective competition regime.
2.1 Given the above background an effort is being proposed by CUTS Centre for International Trade, Economics and Environment (CUTS-CITEE), to study the competition regimes of such developing countries, which have had some experience of the same and are at similar levels of development with a similar jurisprudence. 2.2 Keeping this criterion, for this project, we have selected seven Commonwealth countries: India, Pakistan, Sri Lanka, Zambia, Kenya, Tanzania, and South Africa. All have had a competition law for over three years and have similar jurisprudence based on the common law. Of these, South Africa has also drafted a new law in 1998, while India is considering a new law currently. That is both are replacing their old competition laws to accommodate with the changing times. 2.3 Briefly the project will:
The output of this project would be country research reports, seminars and an advocacy document that would:
4.1 The project will be implemented by CUTS under the close supervision of an international advisory committee who are experienced in competition and related issues. While the core research will be undertaken by an experienced economist/competition practitioner; the whole project will be implemented under the guidance of a committee of economists and experts, who have considerable knowledge and experience of competition issues, and also enjoy a reputation in the field. 4.2 The fieldwork of the project will be done by local partners/research institutions in the relevant countries. The results will be tested at local meetings, which will include consumer organisations, business chambers, media persons and the concerned government officials. It is expected that the core partner will engage the following category of organisations/persons as a national reference group:
4.4 The project was launched
on 1st September 2000 and will be completed by 31st August 2002. It is
however expected that the project will be extended to implement some of
the results of the project including providing technical assistance to
governments and civil society.
5.1 Two partners have been
identified from all the seven countries for the project purposes. One of
the partners is a research institution, which is the main party and the
other partner is an NGO, which is the associate party. In most cases it
is a consumer organisation. Contracts have been signed with almost all
the partners. The partners are:
6.
Operational Strategy Note (OSN)
7. Compilation of preliminary country papers of project countries As a first step towards the project, it was planned to have a preliminary country paper made for each of the project countries. The main objective of this exercise was to get a basic picture of each country’s competition regime and to understand the commonalties and differences among the regimes. It was also decided that this would be some sort of orientation to all our project partners. An annotated agenda, giving broad outlines of the contents of the country paper was sent to each of the core researchers. On the basis of the outlines, country researchers prepared a paper, which was then compiled and collated by the project Core Researcher, Prof. Rakesh Basant. Some of the key observations made were, most of the 7-Up project countries have initiated economic reform in recent years, introducing a wide variety of liberalisation initiatives. The key issue for the 7-Up project countries in the current phase of transition is of managing the competition that the economic reform and liberalization processes have set in motion. It is evident that the countries differ significantly in terms of population size, size of the economy, per capita incomes, industrial structure and exposure to the world economy. All these countries have undertaken significant trade liberalisation in recent years including conversion of non-tariff barriers into tariffs and reduction of existing tariff rates. However, the exposure to world markets through exports and imports differs considerably across the project nations. The scope of competition law and its framework of implementation also vary significantly across these countries. Download Competition Policy in Developing Countries in Word format.
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