Articles : September 2009

By Rijit Sengupta

In line with focus conferences on current topics, the competition authorities from Brazil, Russia, India and China met early September to deliberate on competition reforms and how they could cooperate to deal with the expanding basket of competition distortions arising from the recent global economic downturn.

Hosted in the picturesque settings of Kazan, the third-biggest city of the Russian Federation and capital of the Republic of Tatarstan, the Bric Competition Conference testifies the importance that the four collaborating countries have invested on the need for cooperation for developing well-functioning markets through the ‘Yekaterinburg’ process.

It should be recalled here that the heads of state of the Bric countries met in Yekaterinburg on June 16, 2009, and issued a joint declaration highlighting the need for cooperation on various aspects of economic growth and sustainable development. It is evident that competition enforcement has managed to achieve a priority position among the issues to foster such cooperation. The fact that this conference was organised within 10 weeks from the meeting of the Bric heads of state, testifies the importance that the collaborating countries attach to evolving competitive markets.

Since the dawn of the new millennium there has been unprecedented global enthusiasm on competition reforms—driven by pressure exerted from within and outside a country. Having a competition law has now become a sine qua non of a modern reforming economy. This has, however, created an unprecedented demand for professionals endowed with the knowledge of competition practice and with the capacity to enforce domestic competition laws. Supply of such professionals has proved to be a daunting challenge for most competition authorities from across the developing world. Given that these countries have had a very brief history (if at all) of competition enforcement, it has often been ‘learning on the job’ for most of them.

Various models and strategies have evolved to narrow this ‘gap’ in knowledge and understanding on competition enforcement between the developed and developing (including least developed) countries. International cooperation on competition is one such emerging trend, and has assumed immense political and economic significance in recent times. Often driven by the political significance of such cooperation, many experienced competition authorities have institutionalised a process of offering ‘technical assistance’ to less experienced competition authorities. The process has been equally enriching for both parties involved.

The other process of facilitating international cooperation on competition is through networking and experience sharing. This process was pioneered by the establishment of the Intergovernmental Group of Experts on Competition issues by UNCTAD in 2001, which meets every year to discuss important issues pertaining to competition reforms, globally. In the next year, a group of competition authorities, mostly from the OECD countries, formed the International Competition Network (ICN). The ICN has evolved into a vibrant platform for exchange of experience on competition enforcement; however, it has a greater focus on discussing issues related to the OECD countries. Issues germane to developing and least developed countries often seem to have been low on their radar screens.

The Bric Competition Conference would add a new dimension to international cooperation on competition—especially by focusing attention on the challenges and requirements for competition reforms in the developing countries. It is expected to evolve as a platform for mutual learning through experience sharing among the partners and other members of this process. Speaking at the inaugural, all four heads of the Bric Competition authorities (SEAE Brazil, FAS Russia, CCI India and SAIC China) highlighted the need for well-functioning markets in their respective countries, especially for sustained economic growth and poverty reduction.

Igor Artemyev, head of FAS Russia asserted that FAS Russia has been and would continue to work towards curbing anti-competitive practices at all levels, and contribute towards evolving transparent mechanisms and processes in its markets. Zhou Bohua, minister, SAIC China, expressed a commitment of the highest level of the Chinese government to evolve healthy competition culture in the country. He hoped that the conference would be able to facilitate a platform by which authorities could cooperate by sharing information and experience among themselves to achieve common goals.

Antonio Silveira, secretary, SEAE Brazil, highlighted the need for competition authorities to effectively carry out their ‘competition advocacy’ function, especially in the period when economies are gradually recovering from the global economic downturn. Dhanendra Kumar, chairperson, CCI India, highlighted the need for the competition enforcement process to take cognisance of the existing social, economic and political characteristics in the host country. He underscored the need for governments to develop competition policy as a symbol of its commitment to promote competition at all levels and in every sphere of the economy. In order to maintain the focus of the Bric platform on issues relevant for developing and least developed countries, it is imperative that the four partner countries play a key role in mobilising members from other developing countries from their respective regions to join this bandwagon.

Absence of participants from the African continent (except for Senegal) was one of the rare but glaring lowlights of the Kazan conference and is something that the organisers would need to bear in mind in future. This is particularly important given the rich experience of competition enforcement in developing and least developed country setting among some of the competition authorities of Africa, viz Kenya, Morocco, South Africa, Tanzania, Tunisia, Zambia, Zimbabwe, etc. Further, Africa is much ahead of the rest of the world in as far evolution of regional competition legislation is concerned; a process that the Bric authorities can derive important lessons from and provide inputs into similar processes initiated in their own regions.

The author is deputy head of CUTS Centre for Competition, Investment & Economic Regulation and can be reached at rsg@cuts.org

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