E-Newsletter
Vol. III

CUTS Centre for Competition, Investment &
Economic Regulation (C-CIER)

Advocacy and Capacity Building on Competition Policy and Law in Asia

The CUTS Centre for Competition, Investment & Economic Regulation (C-CIER) is implementing a two-year project entitled “Advocacy and Capacity Building on Competition Policy and Law in Asia” (7Up2), with support from the State Secretariat for Economic Affairs, Switzerland (SECO), the Swiss Competition Commission (COMCO) and the Department for International Development (DFID), UK. The Project endeavours to accelerate the process towards a functional competition policy and law for selected countries (Cambodia, Lao PDR and Vietnam in Southeast Asia and Bangladesh, Nepal and India in South Asia), and advance an enabling environment for the law and policy to be better enforced.
The Project is undertaken in partnership with renowned institutions in each of the project countries.

More about the project can be found at http://www.cuts-international.org/7up2.htm

 

Research

The Project is currently at a vital stage. Research activities in each Project countries are shaping up considerable well. Perception surveys were carried out in all Project countries and, though having faced paramount difficulties, they yielded encouraging results. The findings, so far, have pointed to the prevalence of anti-competitive practices in the marketplace of all the Project countries; the limited level of awareness on competition-related issues, including those in the government circle; and the dearth of technical expertise on the subject. 

Besides India, where the Project has been progressing at an advanced pace (both the Country Report and Country Advocacy Document have been prepared and finalised, Project National Meetings organised as well as many advocacy and capacity building activities), four more Country Reports have been submitted so far, including Vietnam, Lao, Cambodia, Nepal [1] . It is, therefore, of utmost importance that these Reports are critically reviewed and appropriately commented upon, so that they can be improved to be put to the first test of national consultation.       

The Members of the Project Co-ordination and Management Unit (PCMU) have been providing substantial comments and guidance on all the reports, which have been acknowledged and undertaken by all the country partners. The major critical issues with the Country Reports received so far include:

(1)   Language (English vs. national languages); Read More…

(2)   Capacity constraints on behalf of the Project country partners regarding policy analysis, market structure analysis and clear understandings in scanning out anti-competitive practices reported so far;
Read More…

(3)   Scarcity of information, information asymmetry; and Read More…

(4)   Low level of responsiveness on behalf of the national stakeholders in each country. Read More…


Advocacy

Apart from research, advocacy has also been simultaneously undertaken in the first phase in all the Project countries. Dialogues with policy-makers, regulators, the academia and consumer associations have been the focus during regular visits paid by the PCMU to both the regions. An encouraging success was achieved in Vietnam, which is the focus of activities in the Mekong region.

In response to the Draft Competition Law, 2004, that was set for discussion in the National Assembly of Vietnam (NA) in November 2004, the PCMU prepared a commentary on the same in Vietnamese language, which is entitled Bill Blow-up, before the start of the NA working session, and was widely circulated.

The Bill Blow-up can be seen in the Advocacy section of the Project Webpage at
www.cuts-international.org/7up2.htm
.

The Bill Blow-up was sent to all the members of the Vietnam National Reference Group (NRG) [2] , who, in turn, forwarded it to other concerned people/organisations in the country.

The Bill Blow-up was very much appreciated by many of the recipients. Its recommendations were considered and reflected in the final adopted version of the Law.

The Competition Administration Department (VCAD) at the Ministry of Trade of Vietnam, a newly established competition agency of the country, has henceforth sought further comments from the Project team into the implementation regulations, which they are currently drafting. Discussion is also going on about organising a seminar in the near future, to invite national and international comments on the same regulations, as well as to generate mass awareness on the issue.


News Briefs from the project countries…
BANGLADESH

1. Cut Duty to Ensure Fair Competition
Bangladeshi mobile phone importers demanded that the Government should cut import duty on cell phones sharply, as they faced 'unfair' competition from smuggled products. Read More…

2. Band-roll in Soft Drinks Leads to Uneven Competition
Introduction of band-roll in soft drinks has created an uneven competition in the Bangladesh market, with the largest local beverage companies enjoying a field day at the cost of others. Read More…

3. Subscribers Suffer as LPG Price Shoots up
The prices of liquefied petroleum gas (LPG) have increased abnormally in the local markets, multiplying the suffering of its subscribers, following the recent price hike by Bangladesh Petroleum Corporation  (BPC).
Read More…

 


CAMBODIA

1. Rampant Corruption - A Major Hindrance to Development
Early in 2004, USAID/Cambodia began planning an assessment of corruption in Cambodia. The Statement of Work noted the unfortunate reality that corruption has become part of everyday life in Cambodia, in fact it has reached “pandemic” proportions. Here is a brief account from the recently published “Cambodian Corruption Assessment”. Read More…

2. Vietnam Exports Find More Ways into Cambodia
With the launch of a new economic zone and near completion of infrastructure projects near the Vietnam-Cambodia border, Vietnamese companies will have smoother ways of selling their products to and invest in Cambodia. Read More…

3. Channel Heat on in Cambodia
Small IT resellers in Cambodia are facing increasing competition in a freer market, as the developing Asian nation enters its seventh peaceful year after Pol Pot’s death in 1998. Read More…

 


INDIA

1. Government Set to Allow Private Players to Supply ATF
The Government is set to allow private players to supply aviation turbine fuel (ATF), which is currently a monopoly of the three state-owned firms, IOC, BPCL and HPCL. Read More…

2. The War of India's Mobile Operators
The latest episode in the Indian mobile rate war started when Reliance Infocomm pulled the trigger with a massive 60 percent cut in tariffs for prepaid Reliance IndiaMobile (RIM) cell users across its network. Reliance prepaid call costs came down to 99 paise, as against Rs 2.49 before. The Reliance move rattled the entire cell spectrum. Read More…

3. M&As in Banks Will Be the Order of the Day
The Deputy Governor of Reserve Bank of India, V. Leeladhar, has said that mergers and acquisitions in the banking sector are going to be the order of the day.  Read More…

4. Pragmatic solution: BSNL-MTNL merger has been on hold too long
With ICICI Securities, the consultant appointed to work out the dynamics of a merger between MTNL and BSNL, due to give its report on the 21st of Feb 2005, the on-again-off-again merger of the two public sector telecom behemoths is once again on the front burner – about time, too. The issue has been hanging fire for a long time now and needs to be resolved without more delay. Read More… 

LAO PDR

1. US Grants NTR to Lao PDR
The US has granted Normal Trade Relations (NTR) to Laos, saying it was a great opportunity for the country, but one that needed active exponents. Without business willing to put in the effort, the benefits of normalised trade would not be realised. Read More…

2. Forum for Better Business
The Cambodian and Vietnamese experiences in business environment improvement can be valuable lessons for business in Laos. The International Finance Corporation (IFC) and the Lao Government  signed an agreement to establish the Lao Business Forum, as a major step towards improving the Lao business environment on 11th of March 2005. Read More…

3. Electricity Charges to Rise
Electricite du Laos (EDL) will raise the average electricity tariff electricity by 2.7 percent per year, from a base of 514 kip per kWh in 2004, until 2011.
"We are looking for more funds to support an ambitious programme of generation expansion and rural electrification," said EDL General Manager, Viraphonh Viravong, at a meeting for discussing electricity prices.
Read More…

 

 

NEPAL

1. Nepal in the Process of Preparing Anti-dumping Act
The Nepalese Government is in the process of introducing an Anti-dumping and Countervailing Act, intended to protect domestic industries from adverse effects of dumping of foreign goods and to check import of heavily subsidised products. Read More…

2. Farmers Compelled to Sell Paddy Cheap
Paddy is the main source of income for a majority of the farmers at Dhangadi, Nepal, but local farmers have been compelled to sell their produce at cheap prices, as a result of the delay in determination of the price by the authorities concerned. Read More…

3. Sugar Import Duty Slashed Further
In a controversial step that may be detrimental to the country’s sugar industry, the Nepalese Government has slashed the duty on sugar imports from the existing 25 percent to 10 percent.
This is the second time that the duty on sugar import has been reduced this fiscal year. Before Tihar, the festival when the demand for sugar is highest in the country, the Government had reduced the duty from 25 percent to 15 percent, making it applicable only to sugar imported by state trading corporations. Read More…

 

 

Vietnam

1. Economy Faces Bumpy Road in the Years Ahead
The outlook for the economy of Vietnam in 2005 is stable, after last year's uncertainties, prolonged oil price hikes, inflationary pressures, bird flu and the shrimp and basa catfish lawsuits in the US. However, the New Year also signals some looming challenges. Read More…

2. State Promises to Control Steel Price
The Government of Vietnam has threatened to interfere in the construction steel market, if the price of steel ingot imports continues to rise, said an official from the Ministry of Trade (MoT). Read More…

3. Auto Producers’ Profits Go under the Microscope
The Ministry of Finance (MoF) is surveying and will re-calculate the real profit earned by automobile producers in Vietnam, as production costs on domestically produced autos are skewed.
“The prices of domestically-manufactured cars are somewhat unreasonable. The production costs are too high because of large expenses on imported materials. Obviously, the MoF will have to survey the situation,” said Deputy Finance Minister Truong Chi Trung. Read More…

[1] The process in Bangladesh is slower, due to a late start (as compared to other Project countries), capacity/awareness constraints and some unexpected socio-political events.

[2] The NRG is a group of people representing various stakeholder groups in each of the project countries, who are associated to ensure that the activities and findings of the Project are circulated to a wide audience. The members of the NRG constituted in each of the Project countries are important people representing the civil society organisations, Research Institutions, Academia, Chambers of Commerce, Competition Authorities (wherever existent), Trade Departments (internal and external), Regulatory Authorities, Media and Donors.