2007年-世界发展银行全球_A_Framework_for_a_New_Competition_Policy_and_Law___Pakistan_89页_82mb

Summary of "A Framework for a New Competition Policy & Law in Pakistan"

Core Content

This document outlines a comprehensive framework for developing a new competition policy and law in Pakistan, with a focus on enhancing economic growth, productivity, and competitiveness. It is prepared by the World Bank and the UK Department for International Development (DFID) to support the Government of Pakistan in establishing a robust legal and institutional framework for competition regulation.

Main Objectives

• To promote sustainable economic development and improve the well-being of all citizens by fostering competition.
• To create an environment that encourages entrepreneurship, innovation, and efficient resource allocation.
• To establish a new autonomous competition agency to enforce the law and support a competitive market.
• To reduce barriers to entry, exit, and entrepreneurship, both public and private.
• To implement a "rule of economic reason" in assessing market power and anti-competitive behavior.

Key Viewpoints

• Competition as a Driver of Growth: The report emphasizes that competition is one of the most efficient and least costly mechanisms for promoting innovation and productivity in the private sector.
• Need for Institutional Reform: The current competition framework is outdated and inadequate. A new, independent, and autonomous competition agency is essential to address these shortcomings.
• Second Generation Reforms: These reforms focus on improving economic governance, factor market efficiency, and infrastructure services, which are critical for firm-level productivity.
• Global Competitiveness: The report highlights that Pakistan's international competitiveness has declined, and that improving domestic competition is vital for enhancing global competitiveness.
• Non-Discrimination and Transparency: The new law should be applied non-discriminatorily and transparently to ensure fairness and public confidence in business dealings.
• Protection of Competition, Not Competitors: Dominant firms should not be punished for efficient growth and innovation unless they engage in exclusionary or anti-competitive practices.
• Coordination with Other Agencies: The competition agency must work closely with sector-specific regulators and government bodies to ensure effective implementation of competition law.

Key Information

Current Economic Context

• Pakistan has undergone significant market-oriented reforms since the late 1980s, leading to increased private sector-led growth.
• The GDP growth rate has fluctuated, rising to 8.4% in 2004-05 and projected to remain around 7% for 2006-07.
• The economy has become more open, but barriers to entry and exit remain significant, especially for SMEs.

Existing Legal Framework

• The current law, the Monopolies and Restrictive Trade Practices Ordinance, 1970 (MRTPO), is outdated and not aligned with modern economic principles.
• The law needs to be updated to reflect modern market conditions and include a "rule of economic reason" instead of relying solely on market share as a measure of dominance.

Institutional Framework

• A new Competition Commission of Pakistan (CCP) is proposed as an autonomous agency to enforce the law.
• The CCP will have a modest initial staff of 70, with a focus on attracting high-quality professionals in industrial economics, law, and forensic accounting.
• The agency will be structured to ensure operational and financial autonomy, transparency, and accountability.

Enforcement and Implementation

• The law will be enforced through ex post review of prohibited practices and ex ante assessment of mergers and acquisitions.
• Prohibited practices include vertical and horizontal agreements, abuse of dominance, and unfair trading practices.
• The law will emphasize efficiency gains and innovation in decision-making processes.

Advocacy and Public Awareness

• Competition advocacy is a key component, aimed at promoting a "competition culture" in society.
• Activities include influencing government policy, raising public awareness, and conducting market analyses to support advocacy efforts.
• The agency will publish an Annual Report titled "The State of Competition in Pakistan" to inform the public and stakeholders.

Training and Capacity Building

• A comprehensive training program will be implemented to build the technical and managerial capacity of the agency.
• Training will cover economics, law, finance, and general management.
• The agency aims to develop local expertise through continuous training and engagement with international experts.

Cost Projections

• The setup and operation of the new competition agency will involve significant costs:
  • Fixed/start-up costs: Rs. 51 million over the first three years.
  • Training and capacity building: Rs. 123 million.
  • Recurring operational costs: Rs. 350 million.

Conclusion

The report underscores the importance of a modern, autonomous, and transparent competition policy and law framework for Pakistan's economic development. It outlines a detailed plan for institutional design, legal reform, and capacity building, emphasizing the need for a shift from a protectionist legacy to a competitive and dynamic market environment. The establishment of the Competition Commission of Pakistan is central to achieving these goals, with a focus on promoting innovation, efficiency, and fair competition across all sectors of the economy.