| News From CUTS |
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December 24, 2005, Ranaghat, Press Release In their attempt not to limit their activities to the city, but fan out to the suburbs and the countryside to bring awareness about consumer rights and other consumer issues, the consumer research and advocacy organisation Consumer Unity & Trust Society (CUTS) Calcutta Resource Centre organised a programme with the children today at the Ranaghat Bharati High School here. At the outset, the students were briefly introduced to the concept of consumer rights and the significance of the National Consumer Rights Day that falls on Dec 24. The right to (consumer) safety was also emphasized. The main programme consisted of building awareness of the school children on the very topical issue of the rational use of drugs. Some important precepts of rational drugs use, like indiscriminate use of over-the-counter medicines, not short-ending prescribed courses of medicines, to come clean with your doctor under all circumstances, etc were explained to the students that in effect constitutes responsible behaviour on the part of patients. A short film skit was shown on the occasion to underline the issues. The last part of the daylong programme consisted of a debate “An Aspirin a Day Keeps the Doctor Away” among the school children. The lively debate also helped to bring out some of the concerns of this semi-urban community like the fact that patients were sometimes forced to discontinue medication for lack of funds. Prizes were given to the best speakers. The event was graced by the Principal and attended by around 160 students of the school CUTS has been given a brief jointly by the Drug Controller General (India) and the World Health Organisation to bring out a manual listing the dos and don’ts regarding rational use of drugs from the consumer (patient)’s standpoint and to popularise the concept, and today’s programme was a part of this exercise. For further details please contact: |
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December 22, 2005, New Delhi, Press Release The 6th WTO Ministerial conference held recently at Hong Kong did not break down. This is in itself is a success. A second failure after the Cancun fiasco would have been really disastrous for the multilateral trading system, and affected the developing world, including India, quite adversely. This was the common feeling expressed by a group of parliamentarians cutting across different political parties at a meeting organized here on December 21st evening. These MPs assembled under the banner of the “Parliamentarians Forum on Economic Policy Issues (PAR-FORE)”. The forum was constituted at the initiative of CUTS International, a leading research and advocacy group, to facilitate better understanding of complex issues among the lawmakers. The presentation on the outcome of the Hong Kong meeting (http://www.cuts-international.org/documents/Par-fore-ppt.ppt) was presented by CUTS Secretary General, Pradeep S Mehta and Policy Analyst, Pranav Kumar. The parliamentarians were of the opinion that there has been a sea change in the negotiating skills of India and other developing countries in comparison to the Uruguay Round. We are now better organised than the previous rounds. As the negotiations are getting complex we are increasingly improving our preparedness towards negotiations. Now, there is a greater interest both inside and outside the Parliament on trade related issues. “India through its liberalization is moving forward. Our average tariffs came down to 20 percent. However, it is feared that this autonomous liberalization will weaken our negotiating position in the WTO”, observed Mr. Yashwant Sinha, former External Affairs Minister and a Rajya Sabha member. Mr. Manoj Bhattacharya another Rajya Sabha member expressed similar fears. Minister of State for Planning and a PAR-FORE member, Mr M. V. Rajasekharan, expressed concerns on the plight of tea and coffee sector, being hit by global competition. Speaking at the Forum, former Maharashtra Governor and an independent Rajya Sabha M.P. Dr. P. C. Alexander expressed his fears that duty and quota free market access to LDCs is a cause of concern for us as well. Mr. Sinha echoed similar concerns, particularly in case of textiles & clothing trade from Bangladesh. “LDCs deserve sympathy but at the same time they are posing difficulties for us”, said Mr. Sinha. “The success of Hong Kong Ministerial provides an opportunity to make the final jump towards the successful conclusion of the Doha Round”, said Mr. Sharad Joshi, a Rajya Sabha M.P. and President of the Shetkari Sangathan. Our civil servants are better prepared, but we need to do our homework very carefully, particularly in tariff negotiations. They have to be very vigilant because modalities are to be negotiated in the coming months. “The devil is in the details”, observed the meeting. This was the second PAR-FORE meeting since its formal launch early this month. Other Members who participated in the meeting included Suresh Prabhu, Saifuddin Soz and E. M. Sudarshana Natchiappan. Many members felt that the Forum should also discuss international environment agreements, of which there is scarce understanding among parliamentarians and policy makers. “In future Kyoto Protocol will become another Uruguay Round, and we will be caught unaware”, said Prabhu. As another former environment minister, Soz seconded the proposal. In response to the increasing complexity of international negotiations, Mehta said that we need specialists in several areas of international dimensions, such as trade, energy, security, environment etc, and that we cannot afford to continue with transferrable generalists as experts. Members felt that this issue also needs to be addressed as a part of our governance reforms agenda. In conclusion, the Members elected Dr. P. C. Alexander as the Chairman of this Forum. Members also opined that we need for higher participation of parliamentarians and felt that one hour meetings of PAR-FORE can be organized at the Parliament Library over lunch in future, which would discuss single issues. The future meetings will be held during the budget session, sometime in February. These would include the budget and other economic and environmental issues. For further information please contact: |
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December 18, 2005, Hong Kong, Press Release After a week long intense discussions, arguments and counter-arguments, 150 members of the WTO, the world trade rules making body, finally arrived at a consensus and adopted a revised work programme under the Doha Development Agenda. Its contours have been drawn. However, it is important to bear in mind that the complexity of the text should not be obscuring the ultimate vision. Keeping the positive outlook, “the Ministerial text is seemingly a move forward over the “July Package”, adopted at Geneva in 2004. While in agriculture some of the important concerns of developing countries remain unaddressed, the text on non-agricultural market access (NAMA) is relatively better for them”, says CUTS International, a leading research and advocacy group. On the issue of export subsidies, the simplest in the July Framework as Members only had to agree on the end date of their elimination, caused fierce debate between the US and the EU on food aid. Finally, the EU has been successful in defying the G-20’s major demand of setting 2010 as the end date for elimination of all forms of export subsidies. As per the final text 2013 is the date for elimination of export subsidies. This will be achieved in a progressive and parallel manner. However, it is doubtful that WTO Members would be able to honour the 2013 deadline given the complexity of the language in the text on export subsidies in paragraph 6 of the declaration. Under the agricultural market access, after much effort developing countries have been able to secure a positive outcome on Special Products and Special Safeguard Measures. As per paragraph 7 of the text, developing country members will have the flexibility to self-designate an appropriate number of tariff lines on Special Products and also have the right to have recourse to Special Safeguard Mechanism. It must be recalled that this was one of the major achievements of developing countries in the “July Framework” agreement. The language of the text on Cotton is disappointing in contrast to the pressure mounted by African cotton producing least developed countries (LDCs). There is no commitment from the developed countries on reduction of domestic subsidies on cotton. The issue is still within square bracket and left for further negotiations. Also, with regard to the demand of creating a “special development fund”, the developed countries are still non-committal. The text on NAMA gives a sense of comfort to some extent as tariff peaks and tariff escalation would be reduced or appropriately eliminated by using Swiss Formula with multiple co-efficients. As regards preference erosion, which is one of the major fears of LDCs, this has been recognized in the text. On providing duty and quota free market access to LDCs, the demand of including all products has not been accepted unequivocally. In fact some of the LDCs might be completely denied this preferential market access. For more information please contact: |
Triumph
of Mercantilism over Development Promises: December 18, 2005, Hong Kong, Press Release As the WTO Hong Kong Ministerial draws to a close, what do Least Developed Countries, LDCs, have to show from five days of intense negotiations? “For LDCs the outlook from the Ministerial will describe stuttering progress, although far behind that promised at the beginning of the conference, and the sense that many of their remaining concerns have been left to the less emotionally charged setting of Geneva” says leading research and advocacy organisation CUTS International. The long deliberations on cotton have stimulated some progress on dealing with the concerns expressed by the West African cotton producers. The US has agreed to eliminate cotton export subsidies by 2006 and has offered LDCs duty and quota free market access for their cotton exports. However, little has been done to move forward the elimination of domestic cotton subsidies, which are the dominant concern of developing countries on cotton and other agricultural products. On the new aid for trade package, the developed countries have stated their willingness to improve their contributions. However, there seem to have little vision in the test as to where this money will come from, how it will be spent and who exactly will receive it. The ministerial text mandates the Director General of the WTO to set up a task force to flesh out these details and report to the WTO General Council by July 2006 on their progress. In relation to the timetable for phasing out the agricultural export subsidies that contribute to the dumping of cheap imports in developing countries, discussions on this have dominated the final two days of the ministerial. Agreement has finally been reached on them being phased out by 2013, following the EU’s opposition to the 2010 deadline agreed on by virtually all other WTO members. Negotiations on duty and quota free access for LDCs have taken a roller coaster of a ride. Utilising the differences among the developing countries on this murky issue, the position of the developed countries hardened during the final hours of the ministerial. As a result the final text offers countries who find it difficult to do so the opportunity to exclude 3% of tariff lines, which it is expected will allow the developed countries to exclude some of the competitive sectors, such as textiles and clothing, leather products, etc which are of primary concerns of some of the LDCs. The threat by Africa, Caribbean and Pacific (ACP) countries to walk out of the Ministerial if their concerns on preference erosion were not taken into account was tactically quashed by a vague commitment in the final text for the negotiating groups to assess these problems in Geneva with solutions. The struggle for Doha to deliver on its development commitments and provide LDCs with a meaningful package of support through various complementary measures such as preferential market access, aid, etc now moves on to Geneva with much work still to be done. For more information please contact: |
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December 17, 2005, Hong Kong, Press Release The much awaited revised Draft Ministerial Text is finally out. As expected the revised text is full of good intentions rather than any substantial movement forward since July 2004. Elimination of export subsidies has been one of the bones of contentions not only between the G-20 and the EU but also the major players – the EU and the US. “Though the end date 2010 for the elimination of export subsidies is still to be agreed but the EU has been successful in making the language in the para 6 dealing with export subsidies more complex”, says CUTS International, a leading research and advocacy group. In para 11 and 12, which deals with cotton, there is no firm and binding commitments on the creation of a “special development fund’ to compensate losses to the poor African countries in the interim period of elimination of domestic support. This has been one of the key demands of the cotton producing African countries. Although the text mentions that developed countries will eliminate their subsidies for cotton in 2006 but the reduction of trade distorting domestic subsidies, which is causing greater injury to the African cotton farmers, is subject to agreement on general formula by the WTO Members. In NAMA and Services, the critical issues related to LDCs have not been adequately addressed. Para 18 of NAMA, has touched upon the issues of preference erosion as a result of MFN liberalization but consensus is yet to be reached. In duty and quota free market access for LDCs more conditionalities have been attached. The commencing year for operationalising duty and quota free market access is yet to be agreed. Moreover, the text ensures a gateway for developed countries will have liberty to exclude products originating from the LDCs. For more information please contact: |
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December 16, 2005, Hong Kong, Press Release There have been more troubles for the North as Southern countries went one step ahead by deciding to better coordinate and unite their efforts in order to develop a common approach to issues of interest of developing countries, especially the least developed countries (LDCs). “Coming of the G-20, the G-33, the LDCs, the African Group, the Small Economies and the Africa, Caribbean and Pacific Group on a single platform is a befitting reply to the developed countries’ dirty ploy to break their hard earned unity”, says CUTS-International, a leading research and advocacy group of the South. Today, the continued efforts by India and Brazil bore fruit, when for the first time in the history of the WTO, a Ministerial level meeting was held between these major alliances of developing countries. The Groups pledged to work for the removal of distortions in the agriculture trade market, which inhibit the export growth of developing countries. This masterstroke by G-20 and G-90, comprising of 110 countries, blunted the evil design of the two powerful trading giants, the US and the EU, who have been from day one trying to lure LDCs with carrots like “Aid-for-Trade” and duty and quota free market access. The LDCs have also realised that the real and sustainable gains would come from meaningful market access and not from such hollow promises. For more information please contact: |
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December 15, 2005, Hong Kong, Press Release With much of the focus being put on the development package and food aid, deliberations at the Hong Kong WTO Ministerial have so far shied away from the core issues of agriculture, non-agricultural market access (NAMA) and services where serious disagreements continue to exist amongst members. There has so far been little movement towards a draft text that encourages progress on these core issues threatening the ministerial with total failure. “The costs of such a failure are potentially very huge as this could derail the process of global agricultural trade reform,” says CUTS International, a leading research, advocacy and networking group working in Asia, Africa and Europe. “It will leave the issue of tariff peaks and escalations facing developing countries unresolved and increase mistrust amongst countries in the global economy.” Developing countries are right to demand their due share in the global trade as developed countries have so far failed to table proposals that will deliver them a deal to correct the imbalances in the global rules based system that are the legacy of the Uruguay Round. Most notably the failure of the EU to reform its agricultural sector more significantly and the demands by developed countries for near reciprocity from the larger developing economies such as Brazil and India in NAMA talks are quite unfair. The current logjam in the Doha Round is being blamed on the EU’s failure to match the level of tariff reductions the G20 has offered on agriculture, which has led the other members to hold back from making concessions in the remaining areas of the talks. Not only this, the EU is trying to shift focus away from the core agenda of trade liberalisation and playing the divisive tactics of breaking the unity of Southern countries. For more information please contact: |
Can 'Aid for Trade' be substitute for market access? December 14, 2005, Hong Kong, Press Release The Developed countries are pushing the "Aid for Trade debate" at the ongoing World Trade Organisation (WTO) negotiations at Hong Kong. EU has already declared that the EU aid package for the programme will rise to Euro 2 billion by 2010. The EU firmly believes that aid for trade is very important for the economic development of Least Developed Countries (LDCs). In this regard the EU points out that there are certain challenges that LDCs must take account of to reap the benefits of this aid for trade.
LDCs must first craft their own national development strategy of which trade must play a key role. That is trade must fall under the ambit of national development strategy. Once this is done trade can then be put forward in the negotiations on the Doha Work Programme (DWP). However, for the DWP to be of any success this Aid for Trade programme must not be pushed as an alternative for ambitious development round that the poor countries require. Market access negotiations must go hand in hand with
the idea that LDCs must be given adequate time periods to allow their
economies to adjust to any adverse shocks that may arise from trade
liberalisation. More importantly there must be help for Developing Countries
to realise the successful completion of the DWP by dealing clearly with
the issues of preference erosion. No one size fits all approach can
be used for this as different LDCs will have differing requirements.
For this it is acknowledged that strong political will is needed to
address these difficult matters. Indeed it will be paramount for LDCs
on their own to be clear on what their development priorities and policies
are. To this end the Integrated Framework (IF) may be used to prepare
the groundwork. However it must be remembered that IF is not the answer
to all the development needs of the LDCs. What is important is policy
coherence especially at the international level on Millennium Development
Goals, Monterrey Consensus, and Sustainable Development. Moreover, the
Aid for Trade should not come up with conditionalities that could go
against the national development priorities of poor countries. For more information please contact: |
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December 14, 2005, Hong Kong, Press Release Facing mounting pressure from developing countries
led by G-20, G-33 and the African Group on farm trade liberalisation,
developed countries are making all out efforts to rope in Least Developed
Countries, LDCs, who constitutes roughly one-fourth of the WTO membership.
While the European Union, EU, is using every opportunity to highlight
duty and quota free market access, the United States, US, and Japan
are promising to increase their aid under “Aid for Trade”. However, the poor countries have not shown much enthusiasm on the developed countries’ offers of more aid-for-trade. A press release issued by the African Group, which comprises of many African LDCs stressed that the Group attaches high priority to the current round of multilateral trade negotiations. The overwhelming sentiment expressed by the African Group was that members came to Hong Kong with the hope to be able to conclude the round by 2006. For the African Group too, removing distortions in agriculture trade market is an important, especially in cotton export subsidies. Meanwhile, in agriculture negotiations, the developing countries are stepping up pressure on EU to agree on an end date for elimination of export subsidies. The EU is trying to take shelter under the garb of other elements of export competition pillar viz., food aid, export credit and state trading enterprises. This has led to tension between the two trading giants – the US and the EU. The rift between the two burst into the open, when the Mandelson called for radical reform to the US system of food aid for developing nations. “Washington sends aid donations in the form of domestic corn, wheat and other commodities, but cash is quicker and less likely to affect the delicate balance of local trade. Food aid for poor countries and emergency relief can be a tool to advance development and for humanitarian relief but the US program is designed to give support to US agricultural producers,” Mandelson told a news conference. In response to Mandelson’s scathing attack on food
aid programme Portman hit back by saying he did not understand the EU
"obsession" with food aid. A press release by the US Trade
Representative, USTR, claims that the US food aid programme is not trade
distorting. “The US food aid has recently averaged less than 2 percent
of US agricultural exports by value and less than 3 percent by volume.
Food aid from all sources accounts for less than 1 percent of world
agricultural trade. Forty-five percent of all food aid is delivered
to countries that are not members of the WTO. More than 60 percent of
this food aid is delivered to countries classified as LDC by the United
Nations,” the press release added. The USTR spokesperson said Washington
had put forward a proposal to tighten food aid to ensure it did not
skew local commerce. In a nutshell, negotiations are moving very slowly. So far the negotiations are focusing on three issues, namely, agriculture, NAMA and development. Clearly the expectations are not very high and now the members aiming to have something more on what they agreed in the “July Package”. For more information please contact: |
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December 14, 2005, Hong Kong, Press Release "Any contribution that the US has to make to an
aid for trade package through the Doha round is contingent on breaking
the log-jam in the tariff reduction negotiations". These were the
sentiments stated by US Trade Representative, Robert Portman, at a high
level session on "Aid for Trade" organised by the World Bank
and the IMF on the fringes of the Hong Kong WTO ministerial yesterday.
In addition Portman, in a statement repeated as a mantra throughout
the session, stated "any aid for trade package would compliment
to a successful completion of the Doha Round and not a substitute for
it". For more information please contact: |
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November 28, 2005, Jaipur, Press Release “In order for trade liberalisation and other trade reforms to become a more effective tool for development and poverty reduction in developing countries there needs to be a greater focus on accompanying reforms such as governance, institutional strengthening and infrastructure development, In addition it is vital that these reforms are domestically owned so that they respond to the specific needs of the countries involved. If governments and international policy-makers can translate these messages into the Doha Round of trade talks then maybe we can move the process forward”. These sentiments found common expression at an International Symposium entitled “Exploring Linkages between Trade, Development and Poverty Reduction” which took place in Geneva on 24th November in the shadow of the struggling Doha Round of trade talks. This Symposium was organised by CUTS International, a non-governmental research, advocacy and networking organisation, with its headquarters in Jaipur, India, as part of a project (with the same title, and hereon referred to as the TDP project) supported by the UK’s Department for International Development (DFID) and the Dutch Ministry of Foreign Affairs (MINBUZA). Participants included representatives from a number of European development ministries, developing country WTO missions, UNCTAD, UNDP, World Bank, and a wide range of academic and civil society organisations from across Africa, Asia and Europe, where the project is being implemented. Opening the conference, Pradeep S. Mehta, Secretary General of CUTS International gave an overview of the project’s objectives, which include gathering new insights into the linkages between trade, development poverty reduction and communicating these to national and international policy-makers so that trade policy responds more to the needs of the poor. He illustrated the importance of this project by quoting from a recent dialogue in China where a participant stated that “we understand the linkages between trade, development and poverty in our country better than they (international policy-makers) do”. Joining Pradeep Mehta in opening the conference was Lakshmi Puri, the Director of UNCTAD’s Division on International Trade in Goods, Services and Commodities. She welcomed the TDP project and said that initiatives like it were “vital to giving marginalised groups in developing countries a voice to advocate for the type of wide ranging reforms that will empower them to develop more secure livelihoods”. Anders Ahnlid, Director General of International Trade in the Swedish Ministry of Foreign Affairs spoke on the importance of ‘development’ in taking forward the Doha round of trade talks. In the first thematic session in which discussions focused on the ways in which the TDP project can develop synergies with other relevant initiatives taking place in the project countries, Margaret Chemengich from the Kenyan Ministry of Trade highlighted some of the challenges Kenya faces in diversifying its economy and moving away from dependence on trading a narrow range of primary commodities. She said, “Although improvements have been made in developing electricity and telecommunications infrastructure, access to this is still prohibitively expensive to many of the poor in Kenya”. “The project will make an important contribution if it can communicate these needs to national and international policy-makers in order to mobilise greater political will to deliver these investments so that the poor can gain greater access,” she added. In the same session, Alexander Werth a consultant based in Uganda and representing International Lawyers and Economists Against Poverty, said that a recent study he undertook through the TDP project “found that a wide range of trade related technical assistance (TRTA) projects supported by international donors lack domestic ownership and are directed by a donor led-agenda that is all-too-often unresponsive to the priorities of the developing countries receiving the support”. He added that “more needs to be done to engage civil society organisations effectively in the debate surrounding the design of TRTA interventions so that they respond to the needs of people at the grass-roots level and that the TDP project can play an important role in this”. In the following session in which discussions focused on the challenge of policy coherence relating to TDP initiatives, Carlos Braga, Senior Advisor to the International Trade Department of the World Bank, expressed his concern that international donors are failing to coordinate their TRTA activities with each other and with those being undertaken by developing countries themselves. He emphasised the need for these reforms to be coordinated with national development strategies so as to ensure domestic ownership and that involving CSOs in the dialogue was vital to achieving this goal. In the same session, Dr Abid Suleri Assistant Executive Director of the Sustainable Development Policy Institute in Pakistan emphasised the need for countries supplying aid to support trade expansion, to respond more coherently to these challenges. He said that in order to demonstrate their sincerity in supporting the expansion of trade capacity in developing countries “they need to deal with the high tariffs they apply to the exports of developing countries and the astonishing volume of subsidies they provide to their farmers that prevent poor farmers in developing countries from competing more effectively”. In a session looking at the way in which the TDP project could contribute to achieving the Millennium Development Goals (MDGs), Meg Jones, Deputy Director of the Evian Group, emphasised the importance of engaging women’s groups effectively in the project activities. Echoing recent comments by the UN Secretary-General on this topic she said that “with so many of the MDGs dependent on the empowerment of women there needs to be greater involvement of women in the design of policies that aim to promote the expansion commercial activity in developing countries so that the specific needs of women are met”. Speaking at the concluding session, Margriet Kuster, Senior Trade Advisor at the Dutch Ministry of Foreign Affairs said, “For international trade to help countries to achieve more development, first it is necessary to bring together conflicting interests, like those in setting standards. Secondly, technical assistance to developing countries should help in increasing both negotiating capacity and supply capacity. Governance and policy failures need to be understood properly in order to address supply-side constraints.” The TDP project will continue with background research in the project countries, which will provide guidance to the organisation of a number of national, regional and international dialogues to explore TDP linkages further, and the design of a wide range of advocacy activities aiming to incorporate these insights into the policy-making process. This will take place between now and December 2008 when the project will end. For more information, please contact: |
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November 17, 2005, Antalya, Turkey, Press Release Frederic Jenny noted international competition expert observed while releasing CUTS International's book, "Competition Regimes in the World - A Civil Society Report" that the volume is a unique contribution to competition literature. He added that the book will plug a significant knowledge gap relating to competition scenarios the world over. Members of the international competition community participating in United Nation's Fifth Review Conference on Competition in Antalya, Turkey, where the book was released were waiting impatiently to grab a copy of it. The book presents a compilation of brief country essays on competition regimes from across the world and covers 117 jurisdictions. The publication is primarily based on the voluntary contribution of various INCSOC (International Network of Civil Society Organisations on Competition) members, other experts and practitioners on the subject. INCSOC was floated by several civil society organizations in 2003 and currently has a membership base of 105 from 53 countries. Pradeep S Mehta, Secretary General of CUTS and editor of the volume emphasised the role that civil society organizations need to play for strengthening competition regimes. George Lipimile, Executive Director of Zambia Competition Commission observed that the book is possibly the first attempt to present together competition scenario of so many developing countries. Gesner Oliveira at competition expert and former Head of the Brazilian competition authority observed that the uniqueness of the book lies in the fact that it analyses the competition process in the informal sector which comprises a significant part of the economy in many developing countries. By reading the book, one can know about 150 years
of evolution of competition law, along with its different aspects of
legislation and implementation, opined Santiago Roca of the Peruvian
competition agency. Allan Asher, co-chairperson of INCSOC observed that
the book will serve as an important tool in the hands of consumer and
other civil society activists, who are trying hard to get a better deal
for the consumers in different parts of the world. |
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November 12, 2005, New Delhi, Press Release The idea to have a National Competition Policy for India is good, and the Planning Commission will take up this policy issue in its approach paper for the 11th Five-Year Plan, observed Anwarul Hoda, Member, Planning Commission. Hoda was commenting on a presentation on National Competition Policy for India made by Pradeep S. Mehta, Secretary General, CUTS International at the Yojana Bhavan on Friday 11 November. The suggestion to do a competition audit (assessment) of all government policies and practices on the touchstone of competition principles is worthwhile, observed Hoda. Mehta, in his presentation, outlined the need for a National Competition Policy to provide a declared intent to the government’s resolve of promoting competition in the market. India has been following market-oriented economic reforms for over a decade, but government policies continue to be framed and implemented without acknowledging the market process. Mehta gave several examples of government policies and practices that thwart the market process. The guiding principles to formulate policies and practices in a liberalised regime are missing, observed Mehta. He outlined nine principles of Competition Policy to fill the policy vacuum, and rationalise the role of the government (Centre as well as States). Officers from the Ministry of Company Affairs, Department of Economic Affairs, Planning Commission, and the Competition Commission of India (CCI), attended the presentation. Commenting on the presentation, V.K. Dhall, Member, CCI, observed that besides ensuring efficiency and thereby sustained economic growth, a well articulated competition policy would also serve to enhance consumer welfare. The process of liberalisation and deregulation are incomplete without a competition policy, and there is a need for a larger policy framework to guide the formulation and implementation of government policy, observed Dr Suman Bery, Director-General, NCAER. Prof TCA Anant from the Delhi School of Economics observed that the nine principles would serve as a good touchstone for framing and harmonizing the various government policies. Anant added that competition is not the ultimate goal, and there may be justified deviations from the competition policy principles. However, it is important to notify and publicly justify such deviations. Hoda concurred with this view.
The presentation can be accessed at: |
CUTS calls for greater cooperation between India and GMS countries October 30, 2005, New Delhi, Press Release CUTS International, a leading Indian NGO engaged in research and advocacy on trade and development issues, organized the final consultation of the project entitled “South-South Economic Cooperation: Exploring Mekong-Ganga Relationship” at Bangkok on 26-27 October. The project is supported by the Swiss Agency for Development and Cooperation (SDC), Switzerland. It aims to explore the way forward for better economic cooperation (trade and investment) between India and countries in the Greater Mekong Sub-region (GMS), viz. Cambodia, Lao PDR, Thailand and Vietnam. CUTS international is implementing this network-based research project in India and GMS countries to understand the present environment of economic cooperation between these countries and what the business thinks about the future scope of enhancing trade and investment. The objective is to explore issues hindering more trade and investment between these countries and areas where mutual cooperation can be enhanced. Issues concerning trade and investment between India and GMS countries are evolving at a rapid pace. Given India’s Look East Policy, the GMS region is becoming an emerging area for future economic cooperation. On the other hand, there is little literature on such issues and, more importantly, business perceptions on the scope of such cooperation. Earlier national consultations were held in India, Cambodia, Laos and Vietnam to discuss the findings of the perception surveys conducted within the framework of this project in these countries among various stakeholders. Some of the key findings indicate: The meeting at Bangkok involved business bodies, policy makers, research institutions, civil society organisations and representatives of international and inter-governmental organisations to discuss the findings and deliberate on issues for better economic cooperation between India and GMS countries. Issues such as trade and transport facilitation, enterprise development were discussed at length. For more information, please contact: |
CUTS-FLACSO-NSI to review WTO’s technical assistance programme October 28, 2005, Jaipur, Press Release Jaipur, 28th October 2005. A team of experts from India-based CUTS International, FLACSO (Latin American School of Social Sciences, Argentina) and Canada-based North-South Institute has been awarded a prestigious project to conduct strategic review of WTO’s trade-related technical assistance programme. The team will conduct this review over a period of next six months. “This is a very prestigious job and the challenge before us is to see how best poor countries can make use of WTO’s assistance to develop their capacity to effectively take part in negotiation, formulation and implementation of trade policies,” said Pradeep S. Mehta, Secretary General of CUTS International. This review will look at WTO’s comparative advantage in offering trade-related technical assistance vis-à-vis other agencies, the relevance of WTO’s programme to the members and the participants, and efficiency and management of WTO-provided technical assistance. Since the 2001 Doha ministerial conference, WTO’s trade-related technical assistance and capacity building programme (TRTA/CB) has gained momentum. According to the joint WTO/OECD Trade Capacity Building Database, over 10,000 activities were conducted between 2001 to mid-2004, provided by more than 40 bilateral donors and multilateral agencies. In the case of the WTO alone, the number of TRTA/CB activities grew from 212 in 2001 to 319 in 2004. For more information, please contact |
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October 23, 2005, New Delhi, Press Release CUTS International, a leading Indian NGO engaged in research and advocacy on WTO and related issues, supports the stand taken by the Commerce Minister Kamal Nath at a recently concluded meeting in Geneva on WTO negotiations on agriculture. “No deal is better than a bad deal and by being steadfast against the onslaught of rich countries Mr. Nath not only upheld the interests of poor Indian farmers but also those of other developing countries. His approach of ‘not accepting post-dated cheques of a bank having no cash balance’ will have significant implications in future negotiations at the WTO,” said Pradeep S. Mehta, Secretary General of CUTS International. “As in the past, rich countries are going back on their own words but this game is now well-understood by countries like India. For example, the European Union is trying to back load its commitment to reduce agricultural subsidies, which was made a year ago, by citing differences within its members. It is good that India has understood every move of this game,” Mehta continued. “Now it is time for India to stick to the stand taken by a group of 20 (G-20) developing countries on agriculture negotiations”. There is also an attempt to link negotiations on agriculture with other issues such as reduction in tariffs of industrial goods, opening of services industries. “These are different issues and are to be dealt separately. True there could be ‘give and take’ but not between the interests of poor farmers of India and rich insurance companies of the US,” Mehta added. He urged Indian NGOs to stand solidly behind the stand taken by India. “There could even be attempts to break our solidarity. Indian NGOs should not play into the hands of others. Instead they should garner more support to our stand before, during and after the Hong Kong ministerial”. Trade ministers from WTO member-countries will meet at Hong Kong in December this year to take forward the Doha round of negotiations. Agriculture could make or break these negotiations. According to Pascal Lamy, recently appointed WTO Director-General, two months in the run up to Hong Kong are crucial for the successful conclusions of the Doha round by the end of 2006. For further details please contact: |
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October 22, 2005, Mumbai, Press Release "Doctors treat symptoms, not the disease”, said Dr. Anupam Desai, a consulting cardiologist practicing since 48 years, while speaking at the inaugural session of the workshop “Training of Trainers”. This is partly because patients want instant and immediate relief and therefore urge doctors to provide temporary medical aid without going into the depth of the problem. Patients are required to build faith on doctors and more importantly possess basic knowledge about rationale use of drugs. The workshop was jointly organised by Consumer Unity & Trust Society (CUTS), Welfare Forum of India and Nagindas Khandwala College of Commerce, Arts and Management Studies. The objective of the workshop was to disseminate information on community health issues to various stakeholders. The workshop forms a part of the project “Consumer Awareness on Rational Use of Drugs”, undertaken by CUTS Calcutta Resource Centre (CRC), with support from the WHO India office and the office of the Drugs Controller General (India). CUTS has prepared ‘Patient Information Manual’ (PIM) which was distributed to all the participants at the workshop. PIM contains essential information through which the patient can be informed, motivated, guided and helped to adopt and maintain safe, rational and effective health practices and general knowledge about the prevention and cure of diseases. Dr. Sailesh Gupta, child and newborn specialist, explained that a doctor’s role is limited up to writing a prescription to the patient. After this, it is patient's responsibility to apply his knowledge and reasoning from buying drugs from a pharmacist to proper intake of drugs, storage, etc. Dr. Gupta also elucidated the ill-effects of self-medication without proper knowledge which may cause irreparable damage to vital organs like liver, kidney and stomach. Ms Shakuntala Surve, a social worker, emphasised
on the need for such workshops at grassroots level. |
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October 06, 2005, New Delhi, Press Release Most of the people has viewed that Central United Progressive Alliance (UPA) is working satisfactorily but government has not completely succeeded in implementing the Common Minimum Programme (CMP). For this, non-cooperation among various parties in the alliance is the major factor. These results have emerged out of the survey conducted by the Jaipur based consumer advocacy group ‘Consumer Unity and Trust Society’ (CUTS) in order to evaluate the overall performance of the UPA government and efforts made for solving various burning problems related to the common man. The results are based on the views expressed by the residents located in different parts of Rajasthan State. The study was conducted in all the 32 districts of Rajasthan. As per the results of the survey, 29.20 percent people have the feeling that the UPA government is working in the right direction, whereas 41.26 percent people say it is partly on the right path. However, rest of the people do not agree with this view. On the other hand 32.52 percent people are of the view that non-performance of the government in the right direction is mainly due to non-cooperation among various parties of the alliance. 25.52 percent people says that the government is working on the lines of the Common Minimum Programme and 46.33 percent says, government is partly performing, whereas rest do not agree with this view. Expressing their views on the central budget for the year 2005-06, 22.20 percent says that it is as per the expectations of the common people, on the contrary 32.69 percent partly agrees with this view, whereas 36.19 percent are against this. Majority of the people have appreciated the VAT system implemented in most of the states and said that this is fruitful for the consumers but 32.52 percent of the people are against this system. Regarding steps taken by the government for control over the prices, 45.45 percent of people were of the view that government has failed in controlling the dearness. On the other hand 28.32 percent are partly hopeful on this issue, where as only 18.36 percent are confident about the steps taken. Commenting on the foreign policy of the government 27.27 percent of the people says that the present policy is in right direction and will bring positive results. On the contrary 34.09 are partly hopeful on this issue whereas 27.28 percent are not in favour of the policy adopted by the government. With a positive view 44.41 percent of the people says Prime Minister Man Mohan Singh is successful one, 26.75 percent partly agree with this view whereas 22.73 percent do not agree to it. A question regarding completing the term of the government was asked from people. 44.93 percent are hopeful that the government will complete its term but 17.66 percent are partly hopeful, whereas 19.58 percent are not sure. People were asked about priorities of their burning problems. In analyses, it has revealed that 100 percent of the people have given top-priority to unemployment, 99.30 percent to corruption, 98.25 percent to water, 98.08 to terrorism and the rest priorities were: hunger, law and order, increase in population, health, dearness, illiteracy and electricity. For combating corruption people suggested for hard punishment; removal from the posts; removal of corruption from politics, judiciary and administration; strengthening the corruption controlling agencies, etc. About achievements and deficiencies of the UPA government people have appreciated steps taken for passing employment guarantee act, control over inflation, right to women in the parental property, reducing financial deficit. On the other hand people have criticised for non-cooperation among various parties of the alliance, decreasing GDP rate, failure in combating corruption, increase in prices like petrol-diesel, electricity and other essential commodities. |
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October 01, 2005, Kolkata, Press Release “Fever is but a symptom, not a disease in itself”. Do you stop taking medicine/s once the fever subsides? Do you realise that by doing so, the disease gets suppressed temporarily and your body develops immunity towards the drug? There is a singular lack in India of awareness on this and other such issues. The ‘rationality’ in drug use from the consumer’s (patient’s) standpoint would include mundane – yet important – premises such as, awareness on drug interactions with certain foods and other drugs, proper methods of storage of medicines, hazards of self-medication, etc. A ‘Training of Trainers’(ToT) workshop organised by Consumer Unity & Trust Society (CUTS), Calcutta Resource Centre, with support from the WHO India office and the office of the Drugs Controller General (India), was held at the Ramkrishna Mission, Gol Park, today to spread awareness on these issues. CUTS has prepared a ‘Patient Information Manual’ (PIM) in collaboration with and vetted by eminent medical and drug personalities such as Dr Krishnangshu Roy, Jt. Director, Medical Education, WB, Dr Pranabesh Chakraborty, Principal, Gupta College of Technological Sciences and others. In the workshop, Dr Chakraborty and Mr P.R. Ghosh, Registrar, WB State Pharmacy Council explained to the trainers the concept of Rational Use of Drugs (RUD). Mr. Pradyout Biswas, Asst. Director of Drugs Control, WB discussed how the PIM can be used as a basic tool in the training. This ToT workshop was the second phase of a three-tier campaign on RUD. In the first phase, the PIM, followed by posters and a short audiovisual skit was developed. In the third stage, through Public Interface, these trainers would, in turn, spread the word in their own communities, hopefully leading to a cascading effect. This initiative is being conducted in eight states of India besides West Bengal. The inaugural session of the workshop was graced by Dr Jayashree Mitra, Director of Medical Education, Govt of WB, Dr Santanu Tripathy, Vice Principal & Superintendent, S. S. K. M. Hospital and others. A report on “Medicine Prices and Affordability in West Bengal”, prepared from a survey conducted jointly by CUTS and Community Development Medicinal Unit (CDMU), Kolkata, was released by Dr Mitra. The survey was carried out in 26 government hospitals and 35 private pharmacies in seven districts of West Bengal. The survey revealed the dismal availability of essential medicines in government hospitals. For further details please contact: |
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September 27, 2005, New Delhi, Press Release The ‘Parliamentarians’ Forum on Economic Policy Issues’, formed at the behest of five MPs cutting across party lines is gaining popularity with every passing day with more and more MPs expressing their willingness to join the forum. Already about 30 MPs from different parties have agreed to join. The forum will be an informal and non-partisan platform to facilitate discussions among MPs on a periodic basis on core economic policy issues to accelerate consensus on both the content and process of reforms. It is being hosted by the Consumer Unity & Trust Society (CUTS), a non-profit making and a leading civil society organization. “…at this point of time when economic reforms are sweeping our country and globalisation has become all pervading, having a Parliamentarians Forum on economic policy issues on non-partisan lines is most appropriate and would be appreciated by one and all irrespective of what political party one belongs”, observed M. V. Rajasekharan, Minister of State for Planning, Government of India, in a letter to join the Forum. “…a great idea to provide Parliamentarians the forum to discuss the core economic policy issues and to arrive at consensus cutting across party line particularly in the present day economic scenario where India is on the path of emerging as an economic giant in the world”, observed Santosh Bagrodia, M.P. and Chairman, Parliamentary Standing Committee on Industry. Yashwant Sinha of the Bhartiya Janta Party, Suresh Prabhu of the Shiv Sena, N. N. Krishnadas of the Communist Party of India (Marxist), Madhusudan Mistry of the Congress, and Dinesh Trivedi of the Trinamool Congress are the initiators of this Forum. “The forum aims to discuss divergent opinions on core economic policy issues reflected in and out of the Parliament and the media and impart necessary information to MPs so that debate inside could be more informed” said Pradeep S. Mehta, Secretary General, CUTS For more information, please contact: |
‘Development’ is the key for the success of the WTO Doha RoundSeptember 17, 2005, New Delhi, Press Release New Delhi, 17 September 2005. “We need to get the development dimensions back to the centre stage of the WTO Doha Round of negotiations, and the civil society movement should campaign on this before, during and after the Hong Kong Ministerial,” said G. K. Pillai, Additional Secretary, Ministry of Commerce, Government of India. “Whatever we agree at Hong Kong will only be a long and arduous journey to get equity in the international trading system”. He was delivering the inaugural address at a national consultation in the run-up to the WTO’s Hong Kong ministerial conference organised by the Jaipur-based CUTS International. More than 50 participants representing government, civil society organisations, research institutions, media took part in this deliberation where issues relating to trade in agriculture, services, industrial goods were discussed. A few experts from Nepal and Sri Lanka were also present. The event was organised as part of a project titled “WTO Doha Round & South Asia: Linking Civil Society with Trade Negotiations” being implemented by CUTS with the support of Novib (Oxfam, The Netherlands). “Civil society is playing a significant role in manifesting people’s concerns with respect to WTO issues and we need support from the civil society in Hong Kong in order to make the outcomes of the Doha Round of negotiations more balanced,” Pillai said. He emphasised on the negotiations on agriculture and said that it would be impossible for countries like India to reduce tariffs on agricultural goods while rich countries continue with their high level of trade-distorting subsidies. “Agriculture negotiations are progressing gradually and it would take another four to six rounds of negotiations in order to arrive at a balanced agreement to the satisfaction of all WTO members. WTO is not about market access only and this should be upfronted during negotiations and implementation of WTO rules,” he added. Welcoming the participants, Pradeep Mehta, Secretary General of CUTS International highlighted the need for sustaining developing-country coalitions at the WTO, like the G-20 group on issues of agriculture. He explained why the Cancun ministerial was not a failure, as many believe. “Cancun was a deferred success or a turning point in WTO negotiations and established that in future poor countries cannot be taken for granted while negotiating on issues having significant implications on livelihoods,” Mehta said. Poshraj Pandey, President of Kathmandu-based South Asia Watch on Trade, Economics & Environment provided an overview of Nepal’s position on farm goods. Prof. Jacob George of Haryana Institute of Public Administration gave an overview of negotiating positions of South Asian countries on agriculture issues at the WTO. Prof. Ramesh Chand, Director of National Centre for Agriculture Economics and Policy Research presented an overview of how the agriculture sector of South Asian countries are performing in the post-WTO period. “An unique feature of South Asian countries is that economic progress has failed to take people out of agriculture. Employment outside agriculture is the key to a country’s progress. India, being a net exporter of agricultural commodities, should take a more proactive stand to get better market access in rich countries and for this India should push for the reduction of trade-distorting subsidies in agriculture,” Prof. Chand argued. This project is being implemented in five South Asian countries and the research results will be presented at the Hong Kong ministerial conference of the WTO. A feature of this project is that the research is based on stakeholder perceptions. Trade negotiators and trade policy officials in Geneva and at the country level have taken keen interests on this research, so that they are better prepared to negotiate at the WTO with development as the benchmark. For more information, please contact: |
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July 21, 2005, New Delhi, Press Release Five MPs cutting across party lines have joined hands to float a parliamentary forum on economic issues. The MPs are Dinesh Trivedi (AITC), Yashwant Sinha (BJP), Suresh Prabhu (SS), Madhusudan Mistry (INC) and N.N. Krishnadas CPI (M) The moot idea behind the proposed parliamentary
forum is to discuss the divergent opinions on the core economic
policy issues reflected in and out of parliament and media. Now
when India has come up as one of the top ten gross domestic producers
and is on the way to become a great economic giant, it is incumbent
upon policy and law makers to think and guide both the establishment
and the public about what is best in the national interest.
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CUTS Programme in PhagiJune 15, 2005, Phagi, Jaipur, Press Release CUTS Centre for Consumer Action, Research & Training (CUTS-CART), Jaipur, jointly with Bureau of Indian Standards (BIS), Jaipur, organised one-day programme on ‘Awareness on Standardisation of Products to Rural Consumers’ at Madhorajpura, in Phagi. Aman Vikas Sansthan of Phagi was the local organiser. Addressing a gathering, BIS Deputy Director, Amitabh Mukherji, said that the BIS provides standards on products after ensuring quality and variety of products. He also explained the procedure adopted for standardisation of products in detail and cautioned the consumers to be careful about duplicate products. He also addressed that in case they come across duplicate products, then a complaint should be lodged with the BIS. BIS Joint Director, Shiv Raj Singh Meena, said that manufacturers deceive the consumers by more often using wrong ISI mark. He explained and suggested how the consumers can force the manufacturers to correct this practice and to bring the duplicate cases to the notice of the bureau, so that legal action could be taken against them. Contact Person: |
Zambia All Set to Implement NEPAD Programmes: Foreign MinisterJune 09, 2005, Zambia, Press Release The Government of Zambia has agreed to accede to the African Peer Review Mechanism (APRM), and Zambia will be part of the New Economic Partnership for Africa’s Development (NEPAD) steering committee very soon, said Ronnie S Shikapwasha MP, Minister of Foreign Affairs, at the consultative workshop on NEPAD. The minister stressed that NEPAD is a Government-led project through private sector\civil society driven and the Government affixes great importance to the NEPAD initiative not only because it is a socio-economic programme of the African Union, but also at the national level, the Government would like to use it as a major tool to achieve rapid economic growth and development, as well as eradicating poverty. This speech was read on his behalf by Ambassador Akapelwa, Permanent Secretary at the Ministry of Foreign Affairs, at the launch of the national consultative workshop organised by Consumer Unity and Trusty Society-Africa Resource Centre (CUTS-ARC), in association with Participatory Ecological Land Use Management (PELUM) at Lusaka, Zambia, on June 8-9, 2005. Speaking at the workshop, Canadian High Commissioner to Zambia John Deyell, congratulated Zambia on its NEPAD effort to date. He said that although NEPAD has been with us for over three years now, there is still much work to be done in propagating and implementing its principles. At the Livingstone meeting in September 2004, the Government committed to formally accede to the APRM, and to establishing a NEPAD focal point within the Ministry of Foreign Affairs. We expressed interest on learning that how these and other initiatives are progressing. The High Commissioner stated that it was in this framework of NEPAD response that the Canadian Government announced in May 2005, that Zambia would be one of the 14 African countries out of 25 worldwide that will receive two-thirds of Canada’s Overseas Development Assistance (ODA) by 2010. High Commissioner Deyell recommended Zambia for delivering on the NEPAD commitment, and the Canadian government is committed to supporting efforts under NEPAD. Speaking at the workshop, Bwalya Ng’andu, Managing Director of the Development Bank of Zambia (DBZ), added that efforts have been and are being made in Zambia to improve the financial sector, particularly the banking system. Although the effort has not been triggered by the NEPAD proclamation, the progress being made will give impetus to the achievement of the NEPAD’s economic goals of eradicating poverty and putting Zambia on the path to economic development. The NEPAD sponsored Comprehensive Africa Agriculture Development Programme (CAADP) provides Zambia a window of opportunity for pushing Zambia’s Agriculture sector forward as a tool for enhancing economic development in Zambia. The prerequisite to tapping this potential remains in the country’s commitment to allocating the minimum required resources of 10 percent of National Budget to agriculture and NEPAD’s ability to facilitate, through Southern African Development Community (SADC), Zambia’s access to the required resources to implement the CAADP Agenda, said Anthony Mwanaumo of the Agriculture Consultative Forum (ACF). Jack Jones Zulu of Jubilee-Zambia suggested that while NEPAD has the potential to raise the social and economic conditions in Zambia, financing NEPAD is by far the biggest operational challenge facing most African countries including Zambia, considering not just the history of poor economic performance by these countries but also, the very underdeveloped nature of their domestic economies. The two-day workshop highlighted a number of issues, which could be addressed under NEPAD framework. There is need to improve the investment climate in Zambia, this can be attained by focusing on improving Peace and Security, Political & Economic Governance, Corporate Governance, Promotion of the Private Sector, Strengthen Regional Trading Blocks, Infrastructure and Human Resource Development, and prevention of HIV-AIDS said, Eugene Chandi of Zambia Chambers of Commerce and Industry (ZACCI). Francis Chigunta of the University of Zambia proposed that, in order to maximize benefits from NEPAD, there is need for capacity building for the sustainable implementation of NEPAD in Zambia. And, this should be extended to all stakeholders, as identified at the NEPAD sensitisation workshop held at Livingstone in 2004. Thus, the venture of capacity building should be targeted at different levels of actors, focusing on varying needs. This follow up workshop was organised in Lusaka to facilitate the launch of the partnership project entitled, ‘Information-based Advocacy, Networking and Capacity Building on NEPAD in Zambia, which is being supported by the Canadian International Development Agency (CIDA). -------------------------- |
No Burden of Petroleum Subsidies on Government: CUTS May 30, 2005, New Delhi, Press Release The Government collects about Rs.6000 crores as cess on domestically produced crude oil, and bears an equal amount in the form of petroleum subsidies. There is, hence, no net burden of petroleum subsidies on government, said Pradeep Mehta, Secretary General, CUTS while participating in a discussion on Petroleum Subsidies organised by the Ministry of Finance. The meeting was organised by the Ministry of Finance to hold consultations with various stakeholders, including consumer organisations to provide inputs for preparing a roadmap for a new focused subsidy regime. “The cess was introduced in mid-70s to provide financial assistance to state-owned companies. Over the past three decades, the government has collected about Rs.50,000 crores as cess, and almost all of it has gone to the coffers of the Finance Ministry. The cess amount now seems to be an implicit arrangement of meeting the petroleum subsidy burden,” observed Mehta. Oil is one sector where there is a lot of government intervention. Though the administered price mechanism was abolished in March 2002, the government continues to play a major role in determining prices of major petroleum products. There is absolutely no transparency in the pricing of various petroleum products, added Mehta. Even the method of calculating subsides on LPG and Kerosene is distorted, as it is based on import parity pricing of petroleum products and not on the basis of unrecovered costs, which is the appropriate figure for calculating subsidy. Furthermore, this pricing system allows oil companies to factor in customs duty to arrive at the import parity prices. Since the country does not import petrol or diesel, the amount collected as notional customs duty, estimated at Rs.10,000 crores goes to bolster the financials of oils companies. “The claim of huge subsidy burden on petroleum products and bleeding oil companies are exaggerated, and most of the burden is passed on to the consumers” said Mehta. |
Power tarriff hike irrationalMay 28, 2005, Jaipur, Press Release On the concluding day of the workshop organised by the Consumer Unity and Trust Society and Friedrich Ebert Stiftung (FES) on Friday, the experts expressed their resentment over the State Government’s decision to hike power tariff. By increasing the power tariff, the inefficient power companies are passing the buck to the consumers, experts added. Assistant Director CUTS, George Cherian said that 30 per cent increase in the power tariff has put consumers in trouble. RERC is responsible for this irrational increase in tariff. These power companies have not been successful in reducing their transmission and distribution losses and compensatng the company losses by irrationally increasing the power tariff and overburdening the consumers. The State Government, RERC and the power providing distribution companies should rethink over this power hike decision, he added. Former Secretary, RERC Prabhat Dayal said that unbundling of Rajasthan State Electricity Board into five separate companies has actually increased the transparency in the working of the companies. Due to this separate estimate of power supply generation and trnsmission can be easily made shortcomings can be pointed out and corrective measures can be taken. At present, transmission and distribution losses of the power distribution companies have reached to 40 per cent. RERC has imposed a lot of regulations for power reforms but the need of the hour is that working swtyle of power companies should be under scanner to ensure that implementation of these reform regulations, former Charman and Managing Director, Jodhpur Discom, HD Charan. A member of the Rajasthan Electricity Regulatiory Commission, SM Dharendra while talking about the workingof the regulatgory commissions said that RERC has taken necessary steps for power reformst hat include implementation of the new electricity supply code and constitution of various platforms for registering complaints related to power. -------------------------- Deepak Saxena |
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Consumer Unity & Trust Society (CUTS), a leading consumer group in India and working internationally, welcomes India and Pakistan’s move to take trade route to peace. “Boosting trade and investment across borders will be the most significant confidence building measures that the two countries are taking. Revival of the Joint Business Council should move forward to devise implementable actions so that consumers from both the countries benefit,” said Pradeep S. Mehta, Secretary General of CUTS. At present, Pakistani consumers are paying huge prices for commodities like tea and automobile parts, as they are imported from sources other than India. Similarly, Indian consumers will benefit from imports of textiles and handicrafts from Pakistan. Two countries should also explore complementarities in the production of specific items and the benefit of approaching the Central Asian markets jointly. India should look Pakistan as a transit to Central Asia, whereas Pakistan should use facilities in India to get better markets in South and South East Asia. Better trade and investment relations between India and Pakistan are a must for South Asia to gain from global trade liberalisation. Trade can also significantly reduce poverty, which is a challenge before the political leadership of the region. He cited examples of European Union and ASEAN (Association of South East Asian Nations) to highlight peace dividends that closer economic ties among contiguous geographical entities can bring. Robust trade relation is an effective deterrent to reduce tension between countries. This was not only witnessed in Europe and South East Asia, but also that India and China are talking in similar line to boost trade ties. It is not true that India and Pakistan do not collaborate
with each other at multilateral fora. Both are members of the G-20
group of nations, which is a body emerging significantly at the
WTO platform of trade negotiations. Another example is cricket:
India and Pakistan (and Bangladesh and Sri Lanka) talk in one voice
at the International Cricket Council. “These are building blocks
and trade can act as a ‘cementing factor’ to strengthen this relationship,”
Mehta expressed. |
Crusade Against Adulteration, Counterfeiting and Spurious Products March 31, 2005, Kolkata, Press Release “Let the poor villagers drink arsenic laden water and live for 20 years instead of closing the only tube well in the village and signing their death warrant now,” thundered Mala Banerjee, President, Federation of Consumer Welfare Associations, West Bengal, in a satirical reference to the ‘top-down’ policies formulated by the powers that be without any idea of the ground realities. She was speaking at a meeting organised by Consumer Unity & Trust Society (CUTS), a premier city-based consumer organisation, on 30 March, with the theme “Crusade Against Adulteration, Counterfeiting and Spurious Products” to observe World Consumer Rights Day 2005. She referred to the severe bacteria count in water at city hospitals and asked whether poor villagers are expected to buy bottled water. Banerjee was critical of the implementation of various laws and the tendency to apply them without giving a thought to the possible effect on the poor. She however lauded such initiatives as the present meeting. The Dy Commissioner, Enforcement Branch, Kolkata Police, R K Adhikari gave a power point presentation on the various laws related on the above theme and expressed the police’s limitations, as government officers, to prosecute offenders who often took recourse to loopholes in the law. But he assured the audience of their focussed attention to the task at hand and gave impressive statistics about successful prosecutions. K K Sengupta, former chief chemist of the Kolkata Corporation’s food testing laboratory, demonstrated some simple household tests using reagents available in the house itself (bathroom-cleaning acid, for example) to detect adulteration in food. The programme was moderated very constructively by Dr Jayanta Basu, eminent media personality and environmentalist. In his concluding remarks he urged the organisers to organise more such elaborate programmes so that more issues could be brought to light including awareness generation for the lay consumer. For further details please contact: Santanu
Banerjee (mob: 98315 27126) |
COMPETITION LAW NEEDED TO PROMOTE FAIR MARKETS IN THE AFRICAN REGION Entebbe, Uganda, March 22, 2005 A two-day international meeting on competition policy was held at the Imperial Resort Beach Hotel in Entebbe, Uganda. The meeting was organised by CUTS International [1], an India-based international NGO in collaboration with Consumer Education Trust (CONSENT)[2] of Uganda. The meeting held over two days, also witnessed the launch of an international project entitled, `Capacity Building on Competition Policy and Law in Select Countries of Eastern And Southern Africa'. The goal of the project is to promote fair markets in countries (Botswana, Ethiopia, Malawi, Mauritius, Mozambique, Namibia and Uganda) in the African region. The Project, implemented by CUTS and supported by the Norwegian Agency for Development Cooperation (NORAD), Norway and the Department for International Development (DFID), UK would take up research and advocacy activities for promoting fair market and competition over a period of two years in seven countries. The
meeting was attended by delegates from several countries of Africa
and other parts of the world. Apart from the project partners representing
leading civil society organisations, Universities, research institutions
and consumer associations from the seven project countries, the
meeting also drew experts on competition and representatives of
competition authorities. Mr. George Lipimile, the Executive Director
of Zambia Competition Commission observed that the root of anti-competitive
market situation in most African countries lies in the privatisation
programmes adopted by them in the wake of structural adjustment
programmes. He noted that in the pre-reforms era, the markets were
highly dominated by government owned enterprises. However, the companies
that showed interest or bought these government enterprises were
those already operating in the particular market through domestic
production or through imports, thus weakening competition in the
markets. Mr. Lucian Cernat of the United Nations Conference on Trade
and Development (UNCTAD) also Ambassador in Uganda noted that competition policy and law are necessary to curb the rent seeking behaviour of private companies, which hit the poor relatively harder and hence occupy an important place in their development assistance. Ms. Karen Ellis of DFID also underlined the importance of competition policy in DFID's programme and gave a brief account of different projects in the area supported by DFID including those implemented by CUTS. For further details please contact:Kimera Henry Richard, + 256 77 502 441 Rijit Sengupta, +91 141 2282821
--------------------------------------------------------------------- [2] Consumer Education Trust (CONSENT) is a civil society organisation that strives for a socially informed, equitable and just society through empowerment of consumers, protection of ethical practices among business and engagement of policymakers to enact pro-people policies for present and future generations. |
Trade liberalization is not a panacea, complementary policies are must! March 19, 2005, Jaipur, Press Release Trade liberalization provides opportunity but the regional experiences harping on it to bring growth and development to a larger section of society differs across the regions. This was the feelings expressed by the overwhelming majority of experts who assembled here to participate in the project launch meeting entitled “Linkages between Trade, Development & Poverty Reduction”, organised by CUTS Centre for International Trade, Economics & Environment. The experts from South-East Asia, South Asia, Southern and Eastern Africa shared their country experiences of trade liberalization programmes, which have been implemented over the last one and a half decade or so. While South-East Asian countries have done exceptionally well in terms of economic growth and poverty reduction, the Southern African countries have experienced their lowest ever economic growth rate in the recent times. In south Asia, the results are mixed. Countries have been able to achieve relatively higher economic growth but it proved insufficient to address the myriad of social problems they are facing. This is also evident from the low ranking of South Asian countries in UNDP’s Human Development Index. Except Sri Lanka other South Asian countries are topping from the bottom. One of the major concerns, came very clearly was increasing marginalisation of majority of the poor African nations in the global trading landscape. Africa has been unable to take advantage of enormous trade expansion, which have taken place over the last two decades. The share of Africa in the global trade has in fact gone down drastically over this time period. At present what is happening that poor African countries are being forced to integrate without adequate domestic preparedness. Integration into the global economy should not be a prerequisite for achieving higher level of economic growth and development but their outcomes. Some of the few recommendations that came out of the one and a half day deliberations over the complex and inconclusive issue of linkages between trade, development & poverty were emphases on rights based approach, importance of complementary domestic policies to realize the meaningful gains from trade and most importantly the need of a political will to achieve the ultimate goal of poverty reduction through trade liberalization. For more information, please contact: Bipul
Chatterjee, 98292 85921 |
More to learn on trade and poverty linkages March 18, 2005, Jaipur, Press Release Jaipur, 18 March 2005. “We still have a huge amount to learn about the complex links between trade, development and poverty and involving grassroots civil society in a dialogue on the way trade affects their livelihoods is vital to efforts aimed at deepening our understanding of these linkages and therefore developing pro-poor trade policies.” These comments were expressed by the participants at a meeting organised by CUTS Centre for International Trade, Economics & Environment (CUTS-CITEE). The meeting was organised by CUTS-CITEE to launch its project entitled “Linkages between Trade, Development and Poverty Reduction,” which is supported by the UK government’s Department for International Development (DFID) and the Ministry of Foreign Affairs, The Netherlands and will be implemented over the next four years. This project, which will be implemented in 16 countries across Asia, Africa and Europe aims to discover more about how trade policies affect the poor through consulting with them about its impact. In addition it aims to use these findings to advocate for pro-poor trade policies in these regions and at the international level. Bipul Chaterjee the Director of CUTS-CITEE presented it as an opportunity to widen the debate on trade to include the voice of economically and politically marginalised groups. He stated that the media has an important role to play in widening this debate by providing greater coverage to grassroots concerns in relation to trade. He stated further that dialogues directed towards increasing the sensitivity of the media to grassroots trade concerns are one the activities that will be included in this project. Initiating a discussion on the theoretical linkages between trade, development and poverty, Veena Jha from UNCTAD India Programme highlighted the need for trade liberalisation policies to be implemented together with a wide range of complementary policies that offer the poor an opportunity to gain access to the assets and resources required to benefit from the market opportunities that liberalisation can offer. She stated that “assets such as land and farming implements and access to secure electricity supplies, reliable infrastructure, credit and education are vital to the ability of the poor to gain significantly from a freer trading environment.” Further discussions focused on the steps that need to be taken to ensure that the benefits of trade liberalisation are spread as widely as possible and work to support poverty reduction strategies. Tamsyn Barton from DFID expressed her hopes that this project will help bring the developing economic debate on the linkages between trade, development and poverty further into the political realm so that the trade policies of governments reflect the complexities and sensitivities inherent in these linkages. She called on civil society to “spearhead these efforts and to bridge the gap between impoverished stakeholders at the grassroots level and policy-makers at the governmental level.” Peter Metcalfe from the Foundation for the Development of Africa, based in South Africa, suggested that the poor need to be empowered, in order for them to be able to actively express their concerns related to trade policy. He stated that one way in which this can be done is to talk about development in terms of wealth creation rather than in terms of poverty alleviation, a term, which he believes disempowers the poor by defining them by their socio-economic status. A common theme expressed in the sessions was that we are constantly learning more about the linkages between trade, development and poverty and that we have long way to go to understand the mystery that still characterise these linkages. Sheila Page from the London based think-tank Overseas Development Institute, stated the importance of this fact by warning policy-makers against taking dogmatic and simplified policy positions on trade. She said that this would ensure that “a dynamic and nuanced debate on the linkages between trade, development and poverty can continue, which will be for the benefit of the numerous people across the world who are still to experience significant benefits from trade liberalisation.” For more information, please contact: Bipul
Chatterjee, 98292 85921 |
March 15, 2005, Kolkata, Press Release “TB patients should avoid the doctor and take up DOTS therapy for a comprehensive cure”. This and many other such interesting - and seemingly controversial – issues came out in a group discussion organised by Consumer Unity & Trust Society (CUTS) among laymen and experts to launch a project on the subject and to mark ‘World Consumer Rights Day’ which falls today. The discussants included doctors, pharmacists, professors, housewives and civil society members from various strata of the society. In India, as in many other countries, medically inappropriate, ineffective and economically inefficient use of pharmaceuticals occurs quite commonly. The Conference of Experts on the Rational Use of Drugs convened by the World Health Organisation in Nairobi in 1985 defined that: “Rational use of drugs requires that patients receive medications appropriate to their clinical needs, in doses that meet their own individual requirements for an adequate period of time, and at the lowest cost to them and their community” This definition arguably takes into account the medical point of view. The health system however includes in its loop doctors, nurses and other paramedical personnel, drug manufacturers and pharmacists, and finally the patient, each of whom have a different ‘take’ on the whole gamut of issues concerning ‘rationality’ in connection with drugs. The patient is the affected party in the irrational use of drugs. The ‘rational use of drugs’ when considered from the patients’ point of view lends itself to other interpretations. The ‘rationality’ here would include such mundane – yet important – premises such as, awareness that drugs do sometimes interact with other drugs and food; proper methods of storage and disposal of drugs; hazards of ‘over the counter’ medicines; awareness that some ailments do not need drugs but can be cured by adjusting lifestyles (lifestyle therapy) etc. Consumer Unity & Trust Society (CUTS) a premier NGO of the city researching and advocating on consumer issues, has undertaken a project sponsored by WHO and the office of the Drug Controller General of India to build awareness among consumers (patients) on these matters. The project envisages in the first instance to ascertain the level of awareness of the common man on these issues, develop and test ‘Patient Information Material’ (PIM) enlisting and detailing the normative behaviour of a patient, and finally to give this PIM wide publicity across India. For more information please contact: Mita
Dutta: 9830327050/24601424 Country Needs an Expert to Head Competition Agency and Sectoral Regulators March 14, 2005, New Delhi, Press Release India needs to find the best talent to head the Competition Commission and various economic regulatory agencies. The country has been bogged down with the petty issue of whether such bodies should be headed by retirees from the judiciary or bureaucracy. Instead, we need to hunt the best talent to spearhead the competition agenda in the country. These sentiments were expressed by various Members of Parliaments, including Yashwant Sinha, Dinesh Trivedi, Suresh Prabhu at a Seminar organised by CUTS International. The seminar was organised by CUTS International & India Habitat Centre, to discuss and debate the findings of the report recently brought out by CUTS on, “Towards a Functional Competition Policy”. The report identifies various competition abuses that undermine the economy. Initiating the discussion with reference to the current stalemate relating to the Competition Act, Yashwant Sinha, former Finance Minister and Rajya Sabha MP said, that it is a pity that such an important legislation has run into difficulties because of the petty issue of who should head the commission. The Competition Act 2002 could be the initial step towards developing a healthy competition regime in India. Deficienies in the Act, could be removed by step-by-step amendments rather than blocking its implementation altogether. Similar sentiments were expressed by Suresh Prabhu and Dinesh Trivedi. Taking the discussion further, Suresh Prabhu mentioned that the regulators are not born, and we need to develop appropriate mechanisms to ensure that we require strong regulators – those who are trained, mentally prepared, and independent. The regulators perform different functions that transcends the role of judiciary, executive and legislature. Consequently, all these arms of state may tend to feel that regulators are encroaching upon their territory, leading to conflicts. Mr Sinha further added that the country definitely needs a National Competition Policy to ensure a competition assessment of all government policies. Over the years, we have established several specialised regulatory agencies for various sectors. However, the issue of ensuring accountability of these agencies has not been addressed. There is need to establish a mechanism for effective Parliamentary oversight of all the regulatory agencies. This also requires the need to develop an appropriate methodology to evaluate their performance. In the context of competition abuses that exist at the local level, Mr Sinha expressed doubts about the ability of the Competition Commission of India (CCI) to deal with such issues. Dinesh Trivedi warned that in the process of reforms, we might convert public monopoly into private monopolies, leading to a worse situation. There is some accountability for the public monopolies, as they are accountable to the Parliament. However, private monopolies, without appropriate regulatory framework can be dangerous. He emphasised that regulators and the government policies should ensure appropriate level playing field. For further information, please contact: Pradeep
S Mehta: 98102 06633, 98290 13131 Competition Policy Maximises Consumer Welfare as well as Business Welfare March 13, 2005, Bangalore, Press Release Competition Policy maximises consumer welfare, by ensuring goods and services at best possible quality, offered at lowest prices and available in adequate quantities. Alongside, competition policy also leads to business welfare, by ensuring, for instance, intermediates goods consumed by businesses are available through a competitive process. It also ensures a consistent policy and fair environment for businesses to operate. These messages emerged while discussing questions, such as: How is competition policy going to affect the informal sector, which employs about 90% of the labour force? Should we encourage competition in an environment, where there are no effective social safety nets in place to smoothen the transition process? These issues came up at a two-day joint seminar organised by the Centre for Public Policy, Indian Institute of Management, Bangalore (IIMB) and CUTS International, Jaipur at the IIMB campus. The seminar was organised to discuss issues relating to Competition Policy and disseminate the findings of project report on Functional Competition Policy for India, brought out by CUTS. The CUTS project has been supported by the Department for International Development (DFID), UK. British High Commission provided support, under the Global Opportunities Fund, to facilitate the participation of experts from UK. The seminar was addressed by TCA Anant and Aditya Bhattacharjea, two renowned experts from the Delhi School of Economics; Pradeep S Mehta, Secretary General, CUTS International; Deepak Sinha, IIMB; and Partha Mukherjee, Infrastructure Development Finance Corporation. Among the international experts who addressed the seminar was Allan Asher, Member, Office of Fair Trading, UK; and Cathryn Ross, Senior Business Advisor, Competition Commission, UK. In the deliberations, it was mentioned that there are several anomalies in the policies followed by the government. One such instance is the policy towards small-scale industries (SSIs). While on one hand the government follows the policy of reservation, at the same time, imports are allowed in several products, which are reserved for SSIs. Given that, the reservation policy has largely acted as an incentive for “small to remain small”, it is adversely affecting the natural growth of small enterprises, and consequently their ability to compete effectively. It was realised that competition results in pure gains, by checking abuse of dominance, and various anti-competitive agreements, such as price fixing, cartel, etc. There are also situations where the gains are accompanied with pains to some sections of the economy, for instance, closure of firms, which are not able to face competition, and the resultant job losses. In this context, it was mentioned that closure of firms is a natural process of attrition, and job losses in one sector gets compensated by increase in opportunities in other sectors. The case of UK and Australia, were cited, which in the past witnessed historically high levels of unemployment, but after liberalisation and introduction of competition, now have almost zero rates of unemployment. In the specific case of UK, competition led to job losses of about a million but was compensated by creation of five million new opportunities. This happened as, competition led to significant reduction in the prices of key intermediates, such as energy, used by businesses, which in turn spurred fresh investments, and consequently led to creation of new opportunities. However, the key is to manage the entire transition process, by rehabilitating and providing retraining facilities to workers who lose. In the context of government policy, most often, state governments adopt and implement policies in a way that leads to anti-competitive outcomes or regulatory failures. The state excise policy in liquor is a classic example of this. Being one of the largest revenue source state governments follow policy to maximise their revenues, but quite often the outcome is the opposite, and governments lose revenue. This is because, often liquor operators, cartelise to subvert the bids. A similar situation arises in the context of construction works undertaken by states, where there is rampant cartelisation of construction contractors. Under these situations, there is need to do a competition audit of all policies of the government (central as well as state), to ensure that all government policies have a competition dimension. It was also realised that there is not much awareness about competition law in India. In order to ensure this, the Competition Commission of India, should investigate cases, which gives it a public buy-in. One such case could be, for instance, to investigate tied-sales in school education, where schools force their wards to buy books, stationery and uniform from certain select shops. This is clearly a restrictive trade practice and results in the students paying more than what is available at the prevailing market rate. For
further information, please contact: “Benefits of competition to consumers have not been realised to the desired extent” March 04, 2005, Chennai, Press Release Indian economy is experiencing several competition promoting reform measures over the past one and a half decade, however, consumers are still to realise the benefits of increased competition to the extent desirable. For instance, in telecommunications, though the sector has witnessed increased competition over the years, the benefits of competition, in the form of improved quality of service is yet to be realised. Moreover, there are several competition abuses that exist at consumers’ end. This message emerged at the outreach seminar, organised jointly by CUTS International and Citizen consumer and civic Action Group (CAG), at Chennai on 4th March. The seminar was fifth in the series of seminars, organised by CUTS International, as part of its outreach activity to disseminate the findings of its project report on “Towards A Functional Competition Policy for India.” Manish Agarwal, Policy Analyst, CUTS International, presented key findings of the report, and highlighted that contrary to popular understanding, in India, the biggest hurdle to an effective competition regime, comes from the government, both central as well as state. Referring to the establishment of sectoral regulatory agencies in the past few years, TCA Srinivas Raghavan, Consulting Editor, cautioned that we have not given adequate attention to the interface between competition authority and sectoral regulators, which may result in a turf war between these agencies in future. He was of the opinion that besides talking about price-competition, we also need to emphasise on competition for quality. This is important, given that the Indian economy is increasingly becoming self-oriented. Dr S. Chakravarthy, former Member, MRTP Commission and Fellow CUTS, outlined the key provisions of the Competition Act, 2002. He mentioned that even though we have embarked on competition promoting measures, we still require a competition law, to check the various anti-competitive practices. Responding to a question on how Intellectual Property Rights (IPR) are related to competition law, it was mentioned that though, IPR confers a monopoly right on the holder, any unreasonable condition in the exercise of IPR, would come under the purview of the Competition Act, 2002. Bharath Jairaj, Legal Coordinator, CAG, provided examples from Tamil Nadu highlighting cases of regulatory failure at state level. One such case was the flyover scam in Chennai, where the contractor who won the bid, had sub-contracted the same to other contractors. He also informed about cases of competition abuses at consumer level, such as tied-selling in school education, where schools force their students to purchase books, uniform, and stationery from pre-specified shops. In health services, there is a nexus between doctors and laboratories. While discussing the role of media in promoting a competition culture, Mr S Vishwanathan, Editor, Industrial Economist, mentioned that over the years, newspapers are increasingly dependent on advertisements, as more than 90% of the revenues come from advertisement. Under such circumstance, for instance, where Hindustan Lever has an advertisement budget of Rs.700 crores, it is difficult to imagine newspapers writing against Hindustan Lever. N L Rajah from CAG highlighted the need for creating awareness among consumers on redressal mechanisms. He informed that, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), for instance, takes up class action cases in telecom and cable TV sectors. TDSAT has, in fact, been innovative enough to specify that even if two consumers come with the same complaint, it will be considered as a class suit. However, till date, not a single class action case has been filed by any consumer organisation. He also highlighted that given the existence of a large number of competition abuses at local level, there is a need for local level agencies. In this context, one has to see to what extent the Competition Commission, will be effective in dealing with local-level issues. The seminar was attended by representatives from various consumer organisations, state electricity regulatory authority, media, professional bodies, academia, etc. For
more information, please contact: |
“Competition Policy can lead to Pro-Poor Development” March 02, 2005, Hyderabad, Press Release Competition Policy can lead to pro-poor development, this message emerged in the seminar jointly organised by the Institute of Public Enterprises and CUTS International. This seminar was part of the outreach seminars, being organised by CUTS International in select cities of the country, to create awareness among various stakeholders on competition and economic regulation issues. Raising the issue, P. Shiv Shankar, former union law minister mentioned that in a country where there is significant illiteracy, unemployment, and poverty, how can we expect competition to develop markets for growth and equity. He was querying about, how competition can lead to pro-poor development? He further added that, to address this issue, will require a change in the mindsets of people, to take corrective measures. However, in a country, where the Parliament passes key bills without any proper discussion, it is difficult to expect a change in mindsets. Shiv Shankar was of the opinion that the kind of competition we need has be as per our conditions, rather than copying the model of developed countries. The seminar was organised to disseminate, the findings of a report, brought out by CUTS International on “Towards a Functional Competition Policy for India”. It was organised as two interactive sessions, one with media and other with local stakeholders. Presenting the key findings of the report, Mr Pradeep S. Mehta, Secretary General, CUTS International, mentioned that the report gives various examples highlighting that competition policy can indeed lead to pro-poor development. One such case, relates to the distortions that exist in the agriculture markets, because of the operation of agro-commercial firms. As a result, while consumer pay a high price, farmers get a lower price for their produce, as the agro-commercial firms, siphon off the difference as huge margins. The example of Rythu Bazaar in Andhra is a case in point, where farmers and consumers come in direct contact with each other, which is a win-win situation for all. There are several cases, where even illiterate people have benfitted from competition, by using the systems, which are in place to check such abuses. Dr. Chakravarthy, former Member, MRTP Commission, outlined the main provisions in the new Competition Act, 2002, and clarified that the equity which is being talked about refers to that between market players, consumers. Mr. Srinivas Raghavan, Consulting Editor, Business Standard, mentioned that there are situations where even a monopoly can bring about better outcomes – provided it is a properly regulated monopoly. For eg., the Indian Railways which is a government managed monopoly and provides various services at affordable prices. Prof. R K Mishra, Director, Institute of Public Enterprise, spoke about public sector and competition, and highlighted the governance issues, which affects the functioning of public-sector units (PSUs). He advocated for governance reforms to create a level playing field for PSUs. Prof Vikas Singh of IPE who was coordinator of the seminar proposed the vote of thanks. A message that came out from the seminar was that competition is not a panacea for all ills, but by checking distortions in the market, competition policy can result in benefits of competition being passed on to consumers – urban and rural, rich and poor! It was also realised that there are several competition abuses that exist at local level, and there is a need for a local level agency, may be a state-level competition agency, to check such practices. Cable TV sector, is one example, which requires local level regulation, as there are monopolies at consumer’s end. After all, consumers do not have the choice to change their cable operator! Similar practices exist in other local level services and intermediate goods sector, such as, truck operators cartel, taxi/auto operators cartel, tied selling by schools, nexus between doctors and laboratories. All these are practices, which require local level solutions. For
more information, please contact: |
A
UNIQUE CUTS’ PROJECT ON COMPETITION POLICY IN AFRICA SUPPORTED
BY NORAD, February, 2005 NORAD, Norway and DFID, UK have signed an agreement with CUTS, Jaipur for a project to study the competition regimes in seven countries of Africa: Botswana, Ethiopa, Malawi, Mauritius, Mozambique, Namibia and Uganda (codenamed 7Up3). This is a unique project of ‘trilateral development cooperation’, where Indian expertise will be used to assist lesser developed countries in Africa with the support of two European donors. The project (7Up3) will be launched at a conference in Kampala, Uganda on 22 March, where international experts and the country research partners will meet to discuss the agenda and formalize the process. The 2-year project will conclude end 2006. Valued at US$977,760 the project will be implemented in two phases: first, a research phase which will look at the competition scenario in each of the seven countries and come out with reports for wider public consumption, and lobbying the local governments to enact/implement/strengthen their competition laws. The second phase, will involve training and advocacy with the same partners. CUTS Centre for Competition, Investment and Economic Regulation, Jaipur has been engaged in doing studies on competition policy issues in several developing countries of Africa and Asia. The first one (7Up1), a path breaking study, was done in 2000-2002 in India, Pakistan, Sri Lanka, South Africa, Kenya, Tanzania and Zambia. The second (7Up2) is being currently implemented in Bangladesh, Nepal, Cambodia, Laos and Vietnam. For more please see: www.cuts-international.org/ccier.htm. Recently, CUTS has released another path-breaking report: “Towards a Functional Competition Policy for India”, which has analysed the competition policy scenario in India. It is available through www.academicfoundation.com/n_detail/cuts.asp For more information please contact: Rijit
Sengupta, 9829285928 |
DEVELOPING MARKETS THROUGH COMPETITION FOR GROWTH AND EQUITY February 15, 2005, Kolkata, Press Release “Competition policy and law is an important tool to regulate markets to ensure consumer welfare and equity”, said Professor T. C. A. Anant, Delhi School of Economics, while speaking at an outreach seminar organised by the Jaipur-based CUTS Centre for Competition Investment and Economic Regulation in association with National University of Juridical Sciences (NUJS) and the Indian Chamber of Commerce (ICC) here yesterday The seminar was held as a part of an outreach programme by CUTS to release a research report: “Towards a Functional Competition Policy for India”. The report, edited by CUTS Secretary General, Pradeep S Mehta, contains 22 chapters, covering both systemic and sectoral issues. It has been done by various experts under the supervision of a steering committee, chaired by S. Sundar of TERI, which includes eminent economists such as Shankar Acharya, Subir Gokarn, Shrawan Nigam, T. C. A. Anant and Pronab Sen. The project has been supported by DFID, UK, while the report has been published by the Academic Foundation, New Delhi. Kicking off the ball, NUJS Vice Chancellor, Prof B S Chimni, stressed on the dynamic concept of competition emphasised sby Prof Ajit Singh of the University of Cambridge. He highlighted the cases of Korea and Japan which promoted giant businesses to accelerate economic growth. This point was rebutted by both Prof Anant and Mr Mehta, who said that the conditions following World War II are quite different than what India is today in. “In fact, both the Japan and Korea are suffering from high concentration in their economy due to handful of players, and are strengthening their competition laws, to reign in crony capitalism”, said Mehta. In his introductory remarks, Mehta stressed on the distinction between competition and competitiveness and the conflicts between industrial policy and competition policy. For example, the present pursuit of mergers among large nationalised banks needs to be analysed on the touchstone of competition. Such mergers will mean that there will be lesser number of banks, and this situation has its own problems. Such as if a large bank fails, then the consequences can be pretty adverse for depositors, consumers, and the economy. “Our research shows that a large number of anti-competitive practices in our country happen due to government policies, both at the central and state level. For example the excise policy followed by states, promotes liquor cartels, which have a double whammy impact. Not only revenues come down, but consumers pay a higher price”, said Mehta. “We are at the cross roads of implementing a modern and new Competition Act, 2002. It has been enacted to replace the MRTP Act, which was more of a licencing law. The new law has not yet been implemented, due to a turf battle between the judiciary and the bureaucracy. However, not much attention has been paid to issues which relate to the broader remit of a competition policy, which is all encompassing. The current project aims to sensitise policy makers and law makers to pay attention to fundamental issues, which are affecting our economic development due to rampant anti-competitive practices in the country. We need a stated National Competition Policy, which has also been echoed by the Planning Commission”, said Mehta. Justice Aniruddha Bose of the Calcutta High Court, as the keynote speaker, spoke about the paradoxes of necessity of competition policy in the free economy. The importance is increasing because the establishment of WTO has demolished international trade barriers. Natural monopolies existing in the economy like in utilities, that were under state control, are now opening up for private participation. More and more domestic and international mergers are coming up which requires scrutiny even to regulate domestic market. He highlighted the role of judiciary in various countries to depict how competition policy can contribute to growth and equity in the economy. Prof Anant, one of the authors of the report, spoke about the absolute need to developing a pro-competitive policy in India. He noted that the new government is very serious about promoting competition in the market place and also adopt best regulatory practices. NUJS’s Shiju M. V. spoke about the Competition Act, 2002 and its various drawbacks. For further information please contact: Pradeep S Mehta, 98290-13131 or 98102-06633 New Delhi, February 02, 2005, Press Release The Government should make the necessary amendments in the Competition Act to get the Competition Commission working on its agenda, within one year. These amendments should focus on the independence, autonomy and operability of the Commission. This sentiment was expressed while discussing the National Competition Policy Statement tabled in a conference held on the release of a report on “Towards a Functional Competition Policy for India” by CUTS International. The National Competition Policy seeks to provide guidelines to different branches of the Government and agencies at all levels in maintaining the appropriate competition dimensions. Either the Planning Commission or the Department of Economic Affairs could be the forum to take up an assessment in this regard when any step or decision, which will have an impact on the economy and consumers, is to be taken. Taking up a pragmatic approach, the Commission should focus its advocacy agenda on business compliance education and consumer awareness. Also to build its own capacity, the Commission should take up past cases, and analyse them as per the provisions of the current Act, recommended R Shyam Khemani of the World Bank. Echoing the same sentiments, V.K. Dhall, member of the Competition Commission of India (CCI), complimented the project output, which he said would help the Commission in prioritizing its future research programme. Large amendments would only further delay the implementation of the law, added Dhall. A higher level of credibility at the enforcement agency would help generate the demand for competition in the country. David Lewis, Chairman of the South Africa Competition Tribunal quoted the experiences in South Africa where, within six years, credibility of the competition authorities as well as demand for greater competition and enforcement from the public have been successfully built up, by making the whole process public. Frederic Jenny, a renowned competition expert and judge at the French Supreme Court pointed out the challenges awaiting the CCI: Its independence and role in promoting competition in India. CUTS Secretary General, Pradeep S. Mehta, concluded the conference but called for more proactive contributions from both the domestic and international communities towards starting a fresh chapter in the competition regime of India. For further details, please contact: Pradeep
S Mehta: 98102 06633 / 98290 13131 TIME TO ADOPT A NATIONAL COMPETITION POLICY February 01, 2005, New Delhi, Press Release Though, India has had a long experience of a competition law, it has never had a competition policy to address the relevant issues in a systemic and comprehensive manner. It is now time to adopt a National Competition Policy, particularly in the present liberalised regime, said Dr. Kirit Parikh, Member, Planning Commission. He was delivering the keynote address at an International Conference, "Moving the Competition Policy Agenda in India", organised by CUTS International at Hotel Claridges from 31st January - 1st February, 2005. The conference is being organized to release the project report on "Towards a Functional Competition Policy for India" undertaken by CUTS. The conference is being attended by about hundred national and international experts and practitioners, working on competition policy issues in various parts of the world. The conference is slated to suggest a draft National Competition Policy for India. Dr Parikh also emphasized the need for introducing competition wherever possible, even in services provided by the government, free of cost or at highly subsidized rates. Taking the example of education, he suggested that subsidies need not be given to the schools directly, rather students can be given vouchers, which the schools should be able to encash. This would provide incentives to the schools to improve quality and attract more students, in order to get more vouchers. Speaking on the occasion, Dr Frederic Jenny, Judge in the French Supreme Court, noted that one of the most important challenges, India would be facing in terms of implementing its new competition law, is the turf war between the judiciary and the executive. This has been manifest in the recent Supreme Court case on the new competition law. Such challenges exist in other countries as well, including France. Other challenges that India would face in moving its competition policy agenda are, lack of awareness, resistance from labour unions, resistance from business, etc. Mr V K Dhall, Member, Competition Commission of India, appreciated the present study by CUTS noting that, it is a unique contribution to the cause of promoting competition in the country and would help CCI immensely in achieving its objectives. He further noted that India is possibly the only major country, which does not have a functional competition authority. This situation, however, has been created by the Supreme Court case, which would now require amendments in the competition law. This might further delay the process. Nevertheless, the CCI is engaged in advocacy and capacity building activities, including commissioning various research studies to understand the competition problems in the country. This would help in effective implementation of the law, whenever it becomes operational. Outlining the benefits of competition policy on economic development, Roger Nellist, Senior Economic Advisor, DFID, UK, mentioned that a functional competition policy would lead to a congenial business environment for entrepreneurship development. This will create jobs and help in poverty reduction. Even in the current liberalized policy regime, there are various policies of the government, which distort the market process. On this, S Sundar, Distinguished Fellow, TERI suggested that there should be `competition audit' of all government policies, both at federal as well as state level. Refering to the challenges of creating awareness as mentioned by Frederic Jenny, Pradeep S Mehta, Secretary General, CUTS International informed about the outreach seminars (roadshows), CUTS is going to organize in several places of the country in the coming months. ‘Transparent
regulation is essential even in govt. monopoly’ – January 14, 2005, New Delhi, Press Release “An independent and accountable regulatory framework is a specific response to the general mantra of promoting economic growth” observed Montek Singh Ahluwalia here today. He was speaking at a national seminar on “Regulatory Framework for Infrastructure Sector in India”, jointly organized by the Planning Commission and CUTS International. He also emphasized that we need regulators not only in the sectors with private players but also for government monopolies like railways to ensure transparency and fairness. The seminar saw a large turnout from across the country representing different groups of stakeholders that included planning commission members, regulators, policy makers, civil society organizations, academia and media. An interesting aspect of the seminar was a presentation by noted US based expert on regulatory issues, Scott Jacobs, who shared his experiences from across several developing countries. Speaking on the occasion, Pradeep S Mehta, Secretary General, CUTS International, highlighted the dire need for capacity building on various aspects of independent regulation, not just for members/staff of regulatory bodies but also for other stakeholders including consumer groups, media, and the policy makers. He noted that any suggestive measures should keep in mind the local context while addressing any regulatory issue and also recommended a multi-stakeholder approach for an effective regulatory regime. Shrawan Nigam of the Planning Commission opined that it was worth considering that in most regulatory legislations the term ‘policy directives’ had been left undefined for convenient interpretation in an entirely discretionary manner. Further, he also observed that the policy directives should be clearly laid out. He also emphasized that considering the huge lack of regulatory resources, regulators should be put in place in those sectors according to the specific needs of that sector rather than merely indulging in general over-regulation. While several experts expressed the need for looking at international good practices, Sanjeev Ahluwalia, Joint Secretary, Ministry of Finance urged that caution be used in this regard. According to him the functioning of the regulators needed to be benchmarked to Indian standards and situations. Benchmarking against alien standards would not necessarily be appropriate and could even disrepute the regulators unnecessarily and thereby hurt the cause of regulation. S Sundar of The Energy & Resources Institute (TERI) lamented that much of the areas in the transportation sector remains largely unregulated. Even where some regulations are there, they are neither adequately framed nor properly implemented. He urged for a comprehensive regulatory framework for the sector. Ashok Desai, noted economist, suggested that considering the current scenario in the telecom sector, the regulator should go for minimum regulation and deal primarily with interconnection issues that were the crux of promoting and maintaining competition. Gajendra Haldea of NCAER, who has been instrumental in drafting the Electricity Act 2003 emphasised that competition should be promoted both in generation and distribution of electricity as much as possible while ensuring an open access. There was a general consensus among the participants that there was a need for a workable framework to enforce regulatory accountability in an institutionalized manner. In addition to submitting an Annual Report to the Legislature, Civil Society Organisations could be mandated and resourced to hold the regulators accountable. It was also emphasized that proper coordination mechanisms amongst various regulatory bodies had to be institutionalized. |
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