COMPETION POLICY AND ECONOMIC DEVELOPMENT

“The Case of Botswana”

Monnane Monnane

Research Fellow

Botswana Institute for Development Policy Analysis (BIDPA)

INTRODUCTION

• COMPETITION POLICY PASSED IN 2005.

• NO COMPETION LAW

• IMPLIES COMPETITION POLICY HAS NOT BEEN IMPLEMENTED

• RECITE WHAT IS IN THE POLICY AND ATTEMPT TO LINK WITH DEVELOPMENT ISSUES

OUTLINE

• OBJECTIVES OF COMPETITION POLICY

• LINK WITH DEVELOPMENT ISSUES– CONSUMER WELFARE– ENTERPRISE DEVELOPMENT

(EFFICIENCY)– FOREIGN DIRECT INVESTMENT– INTELECTUAL PROPERTY RIGHTS

OUTLINE (cont’d)

– TRADE– PRIVATISATION.

• IS BOTSWANA READY TO IMPLEMT COMPETION POLICY?

OBJECTIVES

• COMPLEMENT OTHER GOVERNMENT POLICIES AND LAWS

• ENHANCE ECONOMIC EFFICIENCY, PROMOTE CONSUMER WELFARE, AND SUPPORT DIVERSIFICATION OBJECTIVES

• PREVENT AND REDRESS ANTI COMPETITIVE PRACTICES AND REMOVE CONSTRAINTS TO FREE PLAY COMPETITION

0BJECTIVES (cont’d)

• PREVENT UNFAIR PRACTICES ADOPTED BY FIRMS AGAINST CONSUMERS

• ENHANCE ATTRACTION OF FDI

• AID DEREGULATION

• SUPPORT CITIZEN ECONOMIC EMPOWERMENT WITHOUT STIFFLING COMPETITION

DEVELOPMENTAL ISSUES

• CONSUMER WELFARE– COMPETITION POLICY WILL PROTECT

CONSUMERS FROM ANY DECEPTIVE AND FRAUDULENT BEHAVIOUR BY SELLERS

– THUS, COMPETITION ACT TO TAKE INTO ACCOUNT THE PROVISIONS OF THE CONSUMER PROTECTION ACT.

• REPEAL ONE THE LAWS TO ELIMINATE ANY POSSIBLE AMBIGUITY?

ENTERPRISE DEVELOPMENT• SMALL AND MEDIUM SCALE

ENTERPRISES– POLICY RECOGNISES IMPORTANCE OF

SMMES (but they are under the ambit of the competition policy – it challenges them to think and act strategically)

– SMME Policy – GOV’T LAWS AFFECT SMMEs.

– ANOTHER LAW AFFECTING SMMEs?– EXEMPTIONS? HOW ABOUT

EXCEPTIONS? OC – CONSTRUCTION. COMPLEMENTARITY?

FOREIGN DIRECT INVESTMENT

• DOES ACKNOWLEDGE THE NEED TO ATTRACT FDI- KEY OBJECTIVE

• EXEMPTIONS PUTS QUESTIONS– PROVISION OF INFRUSTRUCTRAL PUBLIC

UTILITIES (land line telecoms, water, electricity). COMPLEMENTARITY?

– PRIVATISATION POLICY? (PPPs)– DEVELOPMENT COMPROMISED?

INTELLECTUAL PROPERTY RIGHTS

• RECOGNISES ROLE OF INTELLECTUAL PROPERTY RIGHTS.– NEED TO ENCOURAGE CREATIONS– NEED TO ENCOURAGE INNOVATIONS– VERY MUCH WELLCOME– PERHAPS SAME SHOULD HAVE BEEN

DONE FOR SMMEs.

PRIVATISATION

• COMPETITION POLICY DOES NOT COMPROMISE COMMITMENT TO RESTRUCTURING PEs.

• REFORM TO CONTINUE ALONG SIDE REFORM SUCH AS PRIVATISATION

• THE SEQUENCE IS NOT RIGHT.– PRIVATISATION IS ON, COMPETITION

POLICY NOT IMPLEMENTED. NO LAW

PRIVATISATION (Cont’d)• WHAT ARE THE IMPLICATIONS?

– STUBBORN PRIVATE MONOPOLIES (consumers?).

– KEY CONCERN OF PRIVATISATION AGENCY IS SALE, NOT MARKET CONCENTRATION.(BTC, AIR BOTSWANA)

– KEY CONCERN OF COMPETITION AUTHORITY IS CONCENTRATION AND MARKET POWER.

– THUS, COMPETITION POLICY SHOULD BE FUNCTIONAL DURING PRIVATISATION.

TRADE

• NOT VERY EXPLICT. EXCEPT FOR ARGUMENT ON COMPLENTARITY OF LAWS, TRADE POLICY INCLUDED.

• THESE INCLUDE, GATS (businesses, professional, computer related, real estate, etc) OPENED UP FOR COMPETITION.

IS BOTSWANA READY TO IMPLEMT COMPETION POLICY?

• NO!

• NEED FOR COMPETITION LAW.

• NEED FOR COMPETION AUTHORITY.

• NOT EVEN READY PRIVATISATION