June 27, 2006
Cambodia at the Doorstep of
International Integration and
Economic Reform:
Is Competition Policy and Law Needed?
By Nuth Monyrath
Researcher
Is competition law and policy needed in Cambodia?
1
Cambodia and its integration
June 27, 2006
Cambodia has opened its markets to the
world and region:
– A member of ASEAN in 1999
– A member of WTO in 2003
E.g. Status of trade liberalization: ranking
35 out of 170 countries (US Heritage
Foundation).
Is competition law and policy needed in Cambodia?
2
Benefits of Liberalization
June 27, 2006
Better availability of
products and services
Better price
Better quality
Better choice
Is competition law and policy needed in Cambodia?
3
Is liberalizing and opening the market
enough?
Is competition policy and law needed in Cambodia?
June 27, 2006
What happen in this liberalized
market?
The market is plagued by barriers to
market entry:
– Complicated business registration
– Lack of transparency and accountability
(procurement and licensing)
– Weak institution and governance (IPs,
counterfeit goods, taxes)
Is competition law and policy needed in Cambodia?
5
June 27, 2006
What happen in this liberalized
market?
The market is plagued by unfair practices:
– Conspiracy to limit access to
markets/suppliers
– Unfair provisions of subsidies
– Violation of IPRs
– Avoiding labor taxes/regulations
Is competition law and policy needed in Cambodia?
6
June 27, 2006
What happen in this liberalized
market?
The market is plagued by unfair trade practices
(UTPs): a perspective of businessmen,
policymakers and consumers
– Prevalence of UTPs
– Most common UTPs: Raising barriers to entry
and collective price-fixing, price discrimination,
collusive tendering, and tied selling
– UTPs are in important sectors: petroleum,
telecommunication, public utility,
pharmaceutical products, food and beverage
Is competition law and policy needed in Cambodia?
7
June 27, 2006
What happen in this liberalized
market?
Explicit examples of UTPs:
– Price-Fixing amongst boaters to Siem Riep
– Refusal to deal in the telecom market
– Anticompetitive acquisitions in the education
Sector
– Price fixing at provincial level business
– Abuse of dominance in the mobile phone
service market
Is competition law and policy needed in Cambodia?
8
Why all these problems happen?
June 27, 2006
Absence of clear competition policy: lack
of transparency and accountability of
public institutions (licensing and
procurement)
Absence of competition legislation
No independent and autonomous body
to control UTPs
Lack of human and financial resources
Is competition law and policy needed in Cambodia?
9
What are other concerns?
June 27, 2006
Economic concerns: efficient and fair markets
consumers’ concerns: best choice of products
and services available at decent prices and
quality
Economic growth of about 10 % (2005) and
fair allocation of resources
Poverty reduction: poverty rate at 35% of the
total population remains a challenging issue.
Is competition law and policy needed in Cambodia?
10
Do we need competition policy and
law?
Is competition policy and law needed in Cambodia?
Competition law and policy?
June 27, 2006
– There should be clear competition policy and law
– Competition law should make exception to SMEs and
export oriented enterprises and SOEs
– Exception of competition law: technological
advancement, protection of SMEs, disadvantaged groups
Should there be competition law and policy?
100%
98%
80%
60%
40%
20%
2%
0%
Yes
No
Is competition law and policy needed in Cambodia?
12
June 27, 2006
Motivations for competition
policy and law
1993 Constitution: state intervention
to protect markets and consumers
Rectangular strategy: promotion of
competition
WTO commitment
Is competition law and policy needed in Cambodia?
13
What do we need to do?
Is competition policy and law needed in Cambodia?
The way forward
June 27, 2006
Policy and Law: appropriate competition policy and
legislation
Actions: proper sectoral policies, competent
competition authority, effective and efficient and
independent judiciary
Capacity buildings: policymakers, judges,
prosecutors, lawyers, businessmen, consumers, civil
society, academia/media, etc.
Reforms: good governance, transparency and
accountable institutions contribute a lot to fair
competition in the markets
Voice of consumers: “Consumer protection
organization” to protect Cambodian consumers and
raise awareness
Is competition law and policy needed in Cambodia?
15
Thank You!
Is competition policy and law needed in Cambodia?