Brief Meeting on CREW Research & Findings

Evidence based Research Key to Identifying Competition Distortions in Markets
“Competition reforms is extremely essential to address the regulatory deficits that lead to distortions, ultimately affecting the common consumers”, said Pradeep S. Mehta, Secretary General, CUTS International. “It is thus important that CSOs conduct research and advocacy programmes to address them.

Mehta was speaking at an event organised by CUTS International at Islamabad on the sidelines of the SDPI’s annual Sustainable Development Conference being held here on 9-11 December. Participants included experts from Bangladesh, Bhutan, India, Nepal, Pakistan, and UN agencies in the region.

Sharing some of the insights that have emerged from an ongoing CUTS project: Competition Reforms and Social & Economic Welfare (CREW) being implemented in Ghana, India, The Philippines and Zambia, Mehta said that CUTS has been able to document some of the impacts of competition reforms (or the lack of it) on producers and/or consumers in two key markets (staple food and bus transport) from these four countries.

He shared that be it the over-supply of passenger transport in Manila, The Philippines, leads to large scale congestion, pollution, safety and time costs or the monopoly of the public city transport by the government in Ahmadabad, Gujarat, India.

“There is a regulatory deficit in terms of regulating the transport operations, with particular emphasis on safety concerns”, he opined. Similar is the case with staple food in many of the project countries.

In India, regulated markets for staple food items like wheat suffer from major distortions due to vested interests and bad enabling legislation.

He added that CUTS is developing a tool to quantify the costs of such distortions and take up appropriate advocacy efforts in the respective countries during 2015.

Vaqar Ahmed, Deputy Executive Director, Sustainable Development Policy Institute (SDPI) shared how anti-competitive measures such as price control of wheat in the face of a bumper crop leads to informal trade across the borders, leading to distortions in the local markets in Pakistan.

Regulating of the wheat markets being a politically sensitive issue, bringing in regulatory changes in the sector is difficult resulting in subsidies ultimately not reaching the targeted poor people, he added.

Butchaiah Gadde, UNDP, Bangkok, opined that even when the right policies are in place, sustaining them over a period of time becomes an issue. With changing governments and changing priorities because of political realities, the policies cannot deliver the intended benefits to the poorest of the poor.

Majyd Aziz, former President, Karachi Chamber of Commerce & Industries, shared how anti-competitive lobbying by bus operators have successfully thwarted the proposed circular railway project in Karachi leading to high costs to the common consumers.

Sajjad Zohir, Economic Research Group, Dhaka, pointed out that it is important to identify policy champions for sustainability of the right policies in the right spirit.

Other experts present included Mehnaz Ajmal, Food and Agriculture Organisation (FAO, Pakistan; Amalia Davies, International Food Policy Research Institute (IFRPI); Dil Maya Rai, InfoAge Consulting, Bhutan; Hiramani Ghimire, South Asia Watch on Trade, Economics and Environment (SAWTEE), and Tariq Banuri, University of Utah, USA.

The meeting concluded with the experts agreeing on the importance of conducting such studies to be able to estimate the size of the distortions that happen from such anti-competitive practices so as to convince policy makers towards appropriate reforms.