CUTS International Opening Meeting in India 28 th May 2013, New Delhi (India)

1. Overview of the Project & Issues for Discussion (Opening Meeting)Competition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries CUTS International Opening Meeting in India 28th May 2013, New Delhi (India)

2. Outline Introduction About the Project Phase-I Activities Issues for Discussion (Opening Meeting)

3. I. INTRODUCTION

4. 1. Linking Competition Reforms with Welfare in DCs Competition can promote consumerandproducer/business welfare – not much doubt Competition not an end in itself, but a means for achieving developmental goals CUTS experience on competition research, advocacy and outreach in over 30 countries of Africa & Asia Presence of competition law not adequate, developing countries need to embrace a comprehensive approach - competition reforms DC governments need to pay greater attention to competition reforms as an element of public policy reforms

5. 2. What is Competition Reforms? [Competition reforms comprise of the following] • Enabling government policies designed to facilitate a level playing field (fair competition) in a sector • Well-designed regulatory framework, adequately resourced regulatory institutions & effective actions for promoting fair competition in a sector • Well defined competition legislation and effective enforcement mechanisms

6. II. ABOUT THE PROJEC T Competition Reforms in Key Markets for Enhancing Social and Economic Welfare in DCs (CREW Project)

7. 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

8. 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 resulting in consumer and producer benefits

9. 3. Implementation Plan Phase I: Assess implications of competition reforms in specific markets; identify causes of existing consumer & producer concerns – RESEARCH & CONSULTATIONS Phase II:Design a composite methodology to quantify (actual & potential) benefits of competition reforms using existing (ex-post & ex-ante) methods – DESIGN & CONSULTATIONS Phase III:Test the veracity of this methodology in micro-locations (four project countries); and use results for advocacy – ADVOCACY & PUBLIC EDUCATION 4 Countries: Ghana, India, The Philippines & Zambia 2 Sectors: Staple Food & Passenger Transport

10. III. PHASE-I ACTIVITIES

11. 1. Steps & Milestones in Phase-I Preparatory Work in Countries (partners, stakeholders, literature, information) Review of sectoral reform (Policies, Legislation, Statutory Instruments and Sectoralprogrammes) Stakeholder Mapping Fact Finding Exercise Outline of Diagnostic Country Report (DCR) Constitution of NRG First NRG Meeting Diagnostic Country Report draft Second NRG Meeting Diagnostic Country Report final

12. 2. Indicators of Consumer Welfare  Access: Goods and services reach consumers in areas where they were not available earlier Quality: Quality of goods and services enhanced by firms to attract customers Choice: New firms/products enter otherwise ‘concentrated’ markets Price: Prices are reduced in a ‘contestable market’ Time savings by consumers

13. 3. Indicators of Producer Welfare  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 institutions  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’ observed  Transparency in market: Well laid out policies and predictable implementation processes (market regulators)

14. 4. Consumer & Producer Welfare Defined (Sectors)

15. 5. Components of DCR(STAPLE FOOD & PASSENGER TRANSPORT) Identify elements of competition reforms (policies, legislation, statutory instruments and sectoralprogrammes) to be examined in each sector Identify institutions with the responsibility to carry out these reforms – assess performance & analyse challenges Assess implications of these reforms on consumers and producers – benefits and losses Highlight concerns that consumers and producers still have in spite of these reforms and isolate factors Estimate how addressing some of these causes can help overcome these concerns

16. IV. ISSUES FOR DISCUSSION (OPENING MEETING)

17. 1. Issues in State Selection (Staple Food) • Laws and regulations implemented at the state level (state subject) – so important to identify states for CREW research • Components of the supply chain (state level experience and impact of reforms) – Procurement, Storage and Marketing & Distribution • Key elements of reforms across the supply chain to be look at: • Procurement: prices to producers (MSP programme), PDS, buffer stock • Storage: private participation and regulation, warehouse receipts • Marketing & Distribution: agriculture marketing (APMC reforms and state reactions)

18. 2. Suggestion about possible states (Staple Food) Products to be considered vis-à-vis states: Wheat & Rice – to help determine states to be selected for study A number of states have done well, overall w.r.t to reforming agriculture sector – why did they succeed and achievements vis-à-vis consumer and producer gains Assessment of reasons for success & failures in states to derive lessons

19. 3. Issues in State Selection (Passenger Transport) Bus transport offers interesting insights Both inter-city and intra-city elements of bus transport Different states adopted different models in bus transport (public, private and public-private) and a comparison across these models can provide useful lessons in CREW Elements of consumer welfare: price setting, passenger safety, quality and reliability of service and routing (demand-supply gap) Elements of producer welfare: ease of entry in the market, ease of movement of small traders using passenger transport

20. 4. Suggestion about possible states (Passenger Transport) Segregate list of states based on the model of service provision: Public (largely), Private (largely) and Public-Private and choose states/cities Suggested sample: Inter-city: 2 routes in each of the selected 3 states Intra-city: 3 cities

21. 5. Key Questions (Staple Food) What benefits have accrued to producers from the MSP reforms undertaken in the states? What are some of the problems that the states are facing vis-à-vis MSP reforms? How has been the experience of private players been in providing warehousing in the states? What arrangements have worked well in ensuring PPPs in this area? What are some of the outstanding challenges? Has APMC reforms in states taken into consideration consumer welfare (i.e., provision of quality staple in low prices)? What are the likely implications on private entities in states adopting APMC reforms? What are some of the ‘good practices’ adopted by states?

22. 6. Key Questions (Passenger Transport) What models of PPP have been used by states in passenger transport and how have they benefitted consumers & producers? Is there a scientific and logical method of fare determination? How transparent is the process? What efforts have been made at the national/state levels to improve passenger safety – and what are the results? Can a method be developed for charging small traders the right tariff What are some entry barriers in intra-city and inter-city transport in the states? What factors have contributed to them? On inter-city routes what is the level of choice that passengers have? What are some of the ‘good practices’ in the states?

23. Thank You! www.cuts-ccier.org/CREW