1. PROJECT PLANNING MEETING 8-9 November 2012 Bonn, Germany Competition Reforms in Key Markets for Enhancing Social & Economic Welfare in Developing Countries CREW Project: Investigation & Operational Plan

2. Outline of the Discussions 2 Introduction About the Project Research, Advocacy & Capacity Building Management & Programmatic issues

3. 3 I. INTRODUCTION

4. Meeting Agenda 4 Day I (8 th November 2012) 1030hrs:Welcome 1040hrs:Introduction of Participants 1050hrs:Purpose of Meeting 1100hrs:Discussion on Substantive Issues  Research (2hrs) 1300hrs:Light Lunch 1330hrs:Discussion on Substantive Issues  Advocacy & Outreach (1.5 hrs) 1500hrs:Tea Break 1530hrs:  Capacity Building (1.5 hrs) 1700hrs:Recap & Close of First Day

5. Meeting Agenda 5 Day II (9 th November 2012) 0900hrs: Discussions on Programmatic Issues  Reporting & Management  Donor Coordination  Project Advisory Committee (Composition, Role & Engagement) 1100hrs: Tea Break 1115hrs: Discussions on Programmatic Issues  Technical Oversight (Sub-Committee, Advisers, PAC) 1300hrs: Light Lunch 1330hrs: Discussions on Programmatic Issues  Plan for Inception Phase 1500hrs: Recap & Closing

6. Participants 6 GIZ (Germany) – Johanna Speer, Eiko Kauffmann & Sebastian Gilcher DFID (UK) - Miguel Laric CUTS International - Pradeep S Mehta, Rijit Sengupta, Cornelius Dube & Julian Mukiibi Project Advisers - Fred Jenny & Shyam Khemani Others - Representative of DIE, Germany

7. Purpose of the Meeting 7 Harmonise implementation process involving all actors Highlight key substantive issues Discuss certain programmatic components Identification of the project countries Discussions on possible sectors: criteria Discuss the Operational Plan for the ‘Inception Phase’ Enhance familiarity between the project team and donors Sign the Contract(s)

8. 8 II. ABOUT THE PROJEC T

9. CREW Project – Goal & Objectives 9 Goal To better demonstrate measurable benefits from an effective competition regime in DCs, for ensuring long-term support for competition reforms Objectives Enhance understanding of benefits from effective competition regimes in DCs Develop & Test a Methodology to assess efficacy of competition reforms in benefitting all Advocate to key actors (National & International) for greater support to competition reforms in DCs Sustain momentum on competition reforms and take it forward

10. CREW project – Outputs & Outcome 10 Outputs Documented evidence of benefits from competition reforms in key markets Dialogues involving multiple stakeholders on benefits of competition reforms in DCs Strategy for capacity building of DC competition agencies and sector regulators Framework that guides the process of competition reforms in DCs Demand from other countries for similar exercise Outcome Greater attention and impetus for competition reforms in key DC markets resulting in consumer and producer benefits

11. CREW Project - Implementation 11 4 Countries: 2 Asian & 2 African 2 Sectors: High impact on the poor Phase I: Identify ‘indicators’ and ‘enablers’ of an effective competition regime (Diagnostic report) Phase II: Develop Framework for Competition Promotion (FCP) for the 2 sectors Phase III: Apply sectoral FCPs in micro-locations in 4 project countries

12. CREW Project – Caveats 12 It is not a project only about competition enforcement, it is much more comprehensive in scope It will not measure impacts of competition on producers and consumers Activities will be restricted to 4 project countries and 2 sectors Uptake of the exercise in other countries would depend on interest of beneficiaries

13. 13 III. KEY PROJECT ELEMENTS

14. Effective competition reforms process: tracing the pathway (Theory of Change) 14 Foundation: Consensus for reforms Facilitation: Reforms are planned Action: Reforms undertaken & Political Economy issues addressed Outcome: Policies refined, enforcement and revenue gains Result: New products/services enter markets and offer more choices at low cost to consumer Goal: Social and Economic welfare Illustration

15. Project Phases 15 Phase I Indicators for measuring benefits of competition (countries) Enabling (critical) factors Phase II Development of FCPs (2 sector) – 4 Steps Phase III Application of FCPs (micro-locations in 4 countries) - Research (market studies, competition distortion) - Advocacy - Capacity building - Media Outreach - Additional Activities (RECs, other sectors)

16. Project Countries: Criteria for Selection 16 Presence of a functional competition law Presence of an active competition enforcement agency Local (research and advocacy) institutions with orientation on competition and consumer protection issues 2 countries each from the regions: Africa and Asia One country in each region of DFID’s interest One member state each of SADC and ASEAN Electricity as one of the two sectors CUTS experience of having implemented an earlier project CUTS confidence of implementing the activities

17. Criteria for selecting Sectors - discussions 17 High impact on the poor Essential goods and services Availability of data Existence of a sector regulator Donor interest Etc

18. Critical issues in Research 18 Indicators of benefits from competition (Consumers & Producers) - Identifying the indicators - Measuring the indicators (qualitative & quantitative methods) - Creating a comprehensive framework Existing evidence, research findings, approaches/methods Selecting Project Countries – criteria Discussion on criteria for selecting sectors Availability of data in project countries Local research capacity International expertise

19. Measuring Indicators to assess benefits 19 INDICATOR-1 Method - A Method - B INDICATOR-2 Method - C Method - D INDICATOR-3 Method - E Method - F BENEFITS Methods = Qualitative + Quantitative

20. Benefits of competition reforms for Consumers (Indicators) 20  Access: Goods and services reach consumers in areas where they were not available earlier  Quality: Quality of goods and services enhanced by firms to attract customers  Choice: New firms/products enter otherwise ‘concentrated’ markets  Price: Prices are reduced in a ‘contestable market’

21. Benefits of competition reforms for Producers (Indicators) 21  Level-playing field: principle of ‘competitive neutrality’ is observed  Access to essential services: firms can easily access infrastructure networks, etc.  Free movement of goods & services: Mobility not affected by policies, practices (inputs & outputs)  Predictability of regulatory actions: Legislations enforced by autonomous yet accountable institutions

22. Benefits of competition reforms for Producers (Indicators) 22  Cost savings: Effective implementation of strategies to reduce costs, e.g. improved application of ICT tools  Fair market processes: Easy entry and exit in markets; considerable ‘ease of doing business’  Transparency in market: Well laid out policies and predictable implementation processes (market regulators)

23. Existing Evidence & applicable Methods 23 Research findings Japan (2001) - positive effects of competition on industrial growth South Korea (2003) - competition reforms a remarkable turning point Tanzania (2004) - competition increased firm-level productivity Jordan (2005) – impact of concentration & barriers on productivity Egypt (2005) – liberalisation of market leading to productivity gains Australia (2005) - AU$ 20 billion gain in real GDP from NCP International experience Relevant organisations (research organisations, international donors, IGOs, international organisations) Useful existing approaches Available data (country and sector level)

24. Enforcement & Advocacy Experience 24 Consumer benefits Collective price fixing by Cambodian boaters (2005) Cartelisation in city bus service in Nepal, Uganda (2005) Concerted practice w.r.t interest rates among Namibian banks (2006) Abusing dominance in Mauritian milk sector (2007) Lack of competition in mobile phone market in Togo (2010) Producer benefits Orange monopoly in Indonesia affecting farmers (1991) Price-fixing in auctioning of tobacco in Malawi (2005) Relieving cotton farmers from abusive practices in Zambia (2006) Highlighting challenges for SMEs in Namibia (2006)

25. Application of FCPs: Advocacy & Outreach 25 Impact of ACPs on producers, consumers Advocacy related to competition distorting policies Parliamentary outreach and discussions Government-Business Forum Media (information) campaign

26. Application of FCPs: Capacity Building 26 Training Workshop for CAs and Sector Regulators - Enhance enforcement capacity (based on market studies) - Highlight need for coordination of actions (CA + SR) National Orientation Workshop (other sectors) - Expanding support for competition reforms - Better buy-in (other sectors)

27. 27 IV. MANAGEMENT & PROGRAMMATIC ISSUES

28. Key issues: Development partners 28 Role Propose PAC members Guide project implementation process Participate in ‘internal review’ Involve closely with ‘external evaluation’ Stock-take project progress, periodically Act in coordination Engage country-offices in project countries/region Involve other donors & IGOs Other donors to join in supporting CREW subsequently

29. Key issues : Development partners 29 Reporting & Management Donor Coordination Reporting arrangements GAANT Chart Operational Strategy Note (OSN) Budget Amount Value for Money (VfM) indicators: (i) Admin expenses (travel & OH) as % of total expenses (phase- wise) (i) Admin expenses (travel & OH) per output or country (phase- wise) (iii) Programmatic expenses (research, validation and application) as % of total expenses (phase-wise)

30. Key issues: Technical oversight 30 Advisers Two Advisers (Shyam Khemani & Fred Jenny) Point out relevant techniques, methods Guide in developing ToRs of reports, etc. Advise on sources of useful information Secure useful reports, data Help draft and re-draft parts of reports Play an active role in outreach Get involved in capacity building activities Associate Organisation Draf tthe background paper Assist in preparing sectoral FCPs

31. Key issues: Project Advisory Committee 31 Composition: International experts, practitioners from regions, international organisations, donors, RECs, etc. Role Point sources of useful information (techniques, methods, data ) at country/sector levels Quality control of project reports, briefs, etc. Strategic advise (advocacy & outreach) Finalisation of project countries (4) Advise for choosing sectors (2) Address challenges in implementation Get involved in capacity building

32. Key issues: Project Advisory Committee 32 Meetings & Interactions (Project Team) Physical meetings once a year (CREW meetings) Meetings on sidelines of international conferences (OECD GCF, UNCTAD IGE, ACF, etc.) SKYPE meetings (bi-annual) Quarterly reports and feedback Any other possibilities

33. Plan for Inception Phase 33 Planning Meeting Drafting the Operational Strategy Note (OSN) Identification of PAC members ToR of Project Adviser(s) Identification of Project Associate Organisation (PAO) Drafting of background paper by PAO, ‘Measuring impacts of competition reforms : suggested approaches & methods’ Inception Meeting in February 2013 (Nairobi, Kenya) Identification of sectors

34. Any other issues 34

35. 35 Thank You CUTS Team Beginnings are always exciting!