Cambodia at the Doorstep of International Integration and Economic Reform:

June 27, 2006

Is competition law and policy needed in Cambodia?

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Cambodia at the Doorstep of International

Integration and Economic Reform:

Is Competition Policy and Law

Needed?

By Nuth MonyrathResearcher

June 27, 2006


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Cambodia and its integration

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).

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Benefits of Liberalization

Better availability of products and servicesBetter priceBetter quality Better choice

Is competition policy and law needed in Cambodia?

Is liberalizing and opening the market enough?

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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)

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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

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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

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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

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Why all these problems happen?

Absence of clear competition policy: lack of transparency and accountability of public institutions (licensing and procurement)Absence of competition legislationNo independent and autonomous body to control UTPsLack of human and financial resources

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What are other concerns?

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.


Do we need competition policy and law?

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Competition law and policy?

– 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?

98%

2%

0%

20%

40%

60%

80%

100%

Yes No

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Motivations for competition policy and

law 1993 Constitution: state intervention to protect markets and consumersRectangular strategy: promotion of competitionWTO commitment


What do we need to do?

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The way forward

Policy and Law: appropriate competition policy and legislation Actions: proper sectoral policies, competent competition authority, effective and efficient and independent judiciaryCapacity 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


Thank You!

Cambodia at the Doorstep of International Integration and Economic Reform:

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