Competition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries (CREW Project)

Rijit SenguptaCUTS InternationalOPENING MEETING IN ZAMBIA10th April 2013, Lusaka (Zambia)Overview of the CREW ProjectCompetition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries

Outline2IntroductionAbout the ProjectProject PhasesCountry-Level Activities & Timeline3I. INTRODUCTION2. What is Competition Reforms?5Competition 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 project6A story from Kenya: Cane farmers laud increased competition in sugar sector

7II. ABOUT THE PROJEC T1. Goal & Objectives8GoalTo better demonstrate measurable benefits from effective competition reforms in DCs, for ensuring long-term support for competition

ObjectivesEnhance understanding of benefits from competition reforms in DCsDevelop & Test a Methodology to assess efficacy of competition reforms in benefitting consumers and producersAdvocate to key actors (National & International) for greater support to competition reforms in DCsSustain momentum on competition reforms and take it forward 2. Outputs & Outcome9OutputsDocumented evidence of benefits from competition reforms in key marketsDialogues involving multiple stakeholders on benefits of competition reforms in DCsStrategy for capacity building of DC competition agencies and sector regulatorsFramework (Tool) guiding process of competition reforms in DCsDemand 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 Plan104 Countries: Ghana, India, The Philippines2 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 & CONSULTATIONSPhase II: Develop a common methodology for quantifying benefits/impacts of competition reforms in specific markets DESIGN THE FRAMEWORK & CONSULTATIONSPhase III: Apply methodology in micro-locations in project countries to gather evidence and advocate ADVOCACY & PUBLIC EDUCATION4. CREW Project Actors11Program LevelCREW Implementation TeamProject Advisory Committee (PAC)Country LevelCountry Partner OrganisationNational Reference Group (NRG)National Entities: Competition/Sector Regulator, Business Associations, Research Organisation/CSO, Media12III. PROJECT PHASES1. PREPARATORY ACTIVITIES13Planning Meeting (8-9 November 2012, Bonn)Background PaperIdentification of Project Advisory Committee (PAC)Inception Meeting (13-14 March 2013, Jaipur)Selection of Project CountriesSelection of SectorsCountry-specific research in SectorsIdentification of partners and NRG members in countries2. PHASE I Activities Diagnostic Phase(RESEARCH & OUTREACH/CONSULTATIONS)14Identify competition reforms undertaken in the two sectorsGather information about specific policies, practices that benefit/impact consumers and producers Identify the specific markets in each of the two sectors for deeper investigationHow 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 it15STAPLE FOODPASSENGER TRANSPORTCONSUMER WELFAREAvailability of good quality staple food at right prices for ordinary consumersAvailability 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 basisPRODUCER WELFAREParticipation of private entities in procurement, storage and distribution of staple food and how they benefitRight price and fair terms for producers (and their groups) selling staple foods in marketsEase of entry of new players (an operator) in a specific geographic market for providing such servicesFare and terms of service in case of Inter-city Transport services for small traders travelling to nearest market town to sell their produce4. Programme Logic (Phase-I)16

5. Phase IIDesign Phase[DESIGN THE FRAMEWORK (with METHODS/TOOLS) & CONSULTATIONS]17Draw Inputs from the Diagnostic Phase (for preparing 2 sectoral frameworks) in terms of:Indicators of benefits of competition reforms for consumers and producersEvolve a common methodological frameworkSelection of applicable Methods and Tools6. Benefits of competition reforms for Consumers (Possible Indicators)18Access: Goods and services reach consumers in areas where they were not available earlier Quality: Quality of goods and services enhanced by firms to attract customersChoice: New firms/products enter otherwise concentrated markets Price: Prices are reduced in a contestable marketTime 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 institutions7. 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)21Research: (a) competition distorting policies & (b) impact of ACPs on producers, consumersParliamentary outreach and discussionsGovernment-Business ForumMedia (information) campaignTraining 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)

22Thank You

www.cuts-ccier.org/CREWrsg@cuts.org