Brief Overview of the CREW Project

1. Brief Overview of the CREW Project RijitSengupta CUTS International CREW Project Inception Meeting 13-14 March 2013, Jaipur (India)

2. Outline of Presentation I. Background and Introduction - Genesis - Competition reforms - Why CUTS interest? - Making competition regimes effective II. About the CREW project - Goal & Objectives - Outputs & Outcome - Implementation - Caveats

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

4. I. Genesis – a felt need  Competition can promote consumerandproducer/business welfare – not much doubt  Competition not an end in itself, but a means for achieving developmental goals  Presence of competition law not adequate, a comprehensive approach necessary - competition reforms  DCs suffer from implementation challenges: - Government support often meager - Limited stakeholder understanding & support - Development partners’ priorities - Etc.  Implementation key to linking competition with developmental gains

5. II. Competition reforms – conceptual clarity Competition reforms = A + B + C A: Enabling government policies that promote competition in markets B: Appropriate regulatory framework, institutions and actions for promoting competition in sectors C:Well defined competition legislation and effective enforcement mechanisms

6. III. Why did CUTS get interested? • How to better demonstrate positive impacts of competition reforms on DC consumer & producers? • Is there a way to isolate such benefits of competition? • Is there an way to communicate with key decision makers?

7. IV. Existing evidence & experience Studies/Evidence  Japan (2001) - positive effects of competition on industrial growth  S. Korea (2003) - competition reforms a remarkable turning point  Tanzania (2004) - competition increased firm-level productivity  Jordan (2005) – impact of concentration & barriers on productivity  Egypt (2005) – liberalisation of market leading to productivity gains  Australia (2005) - AU$ 20 billion gain in real GDP from NCP  Mexico (2008) – liberalisation (basic goods) benefit consumers • Others Enforcement experience Regulatory enforcement (including competition enforcement) benefits producers/suppliers and protects consumers – Many cases

8. VI. CREW Project – 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 effective competition reforms in specific DC markets  Develop & Test a methodology to assess efficacy of competition reforms in benefitting consumers and producers  Advocateto key actors (National & International) for greater support to competition reforms in DCs  Sustain momentumon competition reforms and take it forward in DCs

9. VI. CREW project – Outputs & Outcome Outputs  Document evidence of benefits in key markets  Dialogue involving multiple stakeholders on benefits  Strategy for capacity building of competition agencies  Framework that guides competition reforms in DCs  Demand from other countries for similar exercise Outcome: Greater attention and impetus for competition reforms in key DC markets resulting in consumer and producer benefits

10. VI. CREW Project - Implementation  4 Countries: 2 Asian & 2 African  2 Sectors: High impact on the poor Phase I: Identify ‘indicators’ and ‘enablers’ of an effective competition regime (Diagnostic report) Phase II: Develop Framework for Competition Promotion (FCP) for the 2 sectors Phase III:Apply sectoral FCPs in micro-locations in 4 project countries

11. VI. Programme Logic (Phase-I) • Outline of DCRs • Degree and nature of competition (markets): CHECK-LIST OF COMPETITION CONCERNS • Identification of Consumer & Producer benefits/losses: PROBLEM IDENTIFICATION • Enabling and/or Opposing factors: STRATEGIC FINE-TUNING

12. VII. Benefits of competition reforms for Consumers Price: Prices are reduced in a ‘contestable market’ Access: Goods and services reach consumers in areas where they were not available earlier Quality-Price ratio: High quality goods and services available for low prices for consumers (value for money) Choice: New products enter otherwise ‘concentrated’ markets Time Savings: Amount of time saved by the consumer in availing a service/good

13. VII. Benefits of competition reforms for Producers  Ease of entry: - No entry barriers for firms to enter new markets  Productivity gains - Easy access to ‘inputs’ market - No impediments to access infrastructure - Considerable ease of doing business  Revenue gains or cost savings  Ability to access markets - Free movement of goods, services

14. VIII. CREW Project – Caveats  It is not a project only about competition enforcement, it is much more comprehensive/broad in scope  It will not measure the full-range of impacts of competition on producers and consumers in the countries  Evolve and validate a methodology for doing so in micro-locations  Activities will be restricted to 4 countries and 2 sectors  Uptake of the exercise in other countries would depend on interest of beneficiaries

15. Thank You www.cuts-ccier.org/CREW