Rijit Sengupta CUTS International NRG-1 Meeting Accra (Ghana), 6 th August, 2013

1. Overview of the CREW ProjectCompetition Reforms In Key Markets For Enhancing Social & Economic Welfare In Developing Countries RijitSengupta CUTS International NRG-1 Meeting Accra (Ghana), 6th August, 2013

2. Outline • Introduction & Background • Project Progress & Planned Activities • Role of National Reference Group Members • Overview of Research Methodology

3. I. Introduction & Background

4. 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 (consumers & producers) • Develop & test a methodology to assess efficacy of competition reforms in benefitting consumers and producers in specific markets • Advocate to key actors (National & International) for greater support to competition reforms in key markets • Sustain momentum on competition reforms and take it forward

5. 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) for monitoring and evaluating the process of competition reforms in DCs • Demand from elsewhere (other sectors and/or countries) for similar exercise Outcome Greater attention and impetus for competition reforms in key DC markets

6. 3. Phases of the Project • Phase I (Diagnostic Phase): Assess implications of competition reforms in specific markets; identify benefits and causes of existing consumer & producer concerns – RESEARCH & CONSULTATIONS • Phase II (Design Phase): Design a composite methodology to quantify (actual & potential) benefits of competition reforms– DESIGN & CONSULTATIONS • Phase III (Validation Phase): Test the veracity of this methodology in micro-locations in project countries; and use results for advocacy – ADVOCACY & PUBLIC EDUCATION

7. 4. Indicators of Consumer Welfare • Access: Have the reach of goods and services to consumers in areas where they were not available earlier (distributive efficiency)? • Quality/Price: Are better quality goods and services available for consumers? Have prices increased appreciably of such good/services? • Choice:Are new products available to consumers? Are new firms entering the market offering more variety? • Price:Have prices changed, either increased or decreased? • Time savings: Do offered goods and services help save time for consumers?

8. 5. Indicators of Producer Welfare • Access to essential services: Are firms able to easily access public service and infrastructure networks (e.g. electricity, water, etc.)? • Free movement of goods and services: Is mobility affected by policies, practices (inputs & outputs), or infrastructure constraints? • Predictability of regulatory actions: Are legislations enforced by autonomous yet accountable institutions? • Cost savings: Have new innovation, such as improved ICT tools, lead to reduction in costs?

9. 5. Indicators of Producer Welfare (contd.) • Fair market processes: Are new firms able to enter the market easily, and existing firms able to close business effectively? • Level-playing field: Is the principle of ‘competitive neutrality’ observed between private/public enterprises? • Transparency in market: Do market regulators have well laid out policies and predictable implementation processes?

10. 6. COUNTRIES & SECTORS Countries:Ghana, India, The Philippines & Zambia Sectors:Staple Food & Passenger Transport

11. 7. Definition of Consumer & Producer Welfare (Sector-Specific)

12. 8. Project Actors Program Level (CUTS) • Implementation Team • Project Advisory Committee (PAC) Country Level • Country Partner Organisation • Sector Experts • National Reference Group (NRG) • National Entities: Competition/Sector Regulator, Business Associations, Research Organisation/CSO, Media

13. II. Project Progress & Planned Activities

14. 1. Project Progress (Nov ‘12 to July ‘13) • Commencement and Planning Meeting: Nov 2012 • Inception Meeting (Mar ‘13): Countries & Sector selection • Review of literature & Fact Finding 4 Countries • Opening Meeting in project countries: Apr-May ‘13 • Outline of Diagnostic Country Report (DCR) • DCR Research Methodology July 2013 • Review of DCR Methodology (by PAC) July –Aug ‘13

15. 2. Planned Activities (Aug 13 to Jan 14) • Finalise the DCR Methodology (country-specific) • Initiate the secondary research and analysis • Develop and execute the primary data collection and anlysis • Draft Country-Specific DCR (a section each on selected sector) – mid-Nov ‘13 • Partners’ Meeting + PAC Meeting (Nov 2013) • NRG to review DCR findings and discuss (NRG-2) meeting – early Dec ‘13 • DCR to be finalised: mid-Jan 2014

16. III. Role of NRG Members

17. 1. National Reference Group • Multi-stakeholder group of experts and practitioners • Composed of competition scholars, practitioners and sectoral stakeholders • The group would comprise about 15 members in each country • Meet periodically to discuss project progress and issues

18. 2. Role of NRG Members • Guidance and support in project implementation • Inputs in designing components of research • Review important project documents - Diagnostic Country Report (DCR), Framework for Competition Promotion (FCP), etc. • Access to country-specific institutions for data (literature, statistics, market environment, etc.) and contacts for advocacy and outreach • Participate in project meetings • CREW findings would help them in their own work agenda

19. 3. NRG Meetings & Timelines

20. 3. NRG Meetings & Timelines (contd.)

21. IV. Overview of the Research Methodology

22. 1. Project Phases The project would be implemented over three phases as described earlier and presented below: Diagnostic Phase: RESEARCH & CONSULTATIONS Design Phase: DESIGN & CONSULTATIONS Validation Phase: OUTREACH & PUBLIC EDUCATION

23. 2. Conceptual framework: Phase I

24. 3. Steps to Undertaking Diagnostic Research Two components: SECONDARY LIT. & INFO + PRIMARY DATA • Scanning and identification of reforms impacting the two markets – staple food (maize) and passenger transport (bus) • Documenting the evolving state of competition in these markets (understanding prominent changes over time) • Implications of competition or market reforms on consumers and producers (benefits or damages – using indicators) • Evidence of existing consumer and producer concerns • Gathering feedback/input about remedies, and estimating possible benefits therefrom

25. Step-1: Scanning and identification of competition (market) reforms • Identify reforms undertaken in each of the two markets over time (using an appropriate reference point) • Reforms could comprise: (i) Government policy (ii) Legislation (iii) Statutory Instrument (iv) Sectoralprogrammes (v) Administratove practices • Establish the basket of relevant reforms to be considered

26. Step-2: Assess state of Competition in Markets Look at the following elements (Porter’s Five Forces Analysis) • Structure of market and nature of competition in the industry • Potential of new entrants into industry • Power of suppliers • Power of customers • Threat of substituteproducts Some additional elements (Competition Assessment Framework, DFID) • Identifying government policies, institutions limiting competition • Look for anti-competitive conduct • Consider vested interests and the principal beneficiaries

27. Step-3: Implications of reforms on consumers and producers • Gather both secondary and primary information • Review of relevant secondary literature (reports, etc.) and information (govt. data sources) to assess benefits/damages of key government reform actions • Gather primary data (perception) based on survey, interview and FGDs from consumers and producers • Employ QUALITATIVE (case study) and QUANTITATIVE methodologies (ex-post approach) to assess implications • Analyse both secondary and primary data to answer research questions, and document in report

28. Step-4: Evidence of consumers and producers concern & Remedy Addressing concerns • Review secondary information to identify existing consumer and producer concerns in the two sector • Gather primary data (perception) based on survey, interview and FGDs from consumers and producers • Isolate common (bottom-up) suggestions for addressing concerns Estimating benefits • Employ QUALITATIVE (case study) and QUANTITATIVE methodologies (ex-ante approach) to assess benefits of suggested measures

29. 4. Stakeholder mapping and feedback collection Staple Food (Maize) Identify stakeholders across supply chain, covering • Production – Farmers, Input suppliers • Procurement – procurement agency • Storage – storage service provider • Processing – millers • Marketing - traders • Distribution - consumers Transport • Intra-city & Inter-city: (i) passengers, (ii) operators, (iii) government officials, (iv) regulators

30. MEDASI!www.cuts-ccier.org/CREWEmail: rsg@cuts.org