A welcome law

The Competition Act has taken far too long to become law, encountering and ultimately overcoming powerful resistance

Both houses of parliament finally passed the Competition Act of 2010 this past week and by affixing his signature President Zardari enacted the law providing legal cover to the Competition Commission of Pakistan (CCP). This bill has taken far too long to become law, encountering and ultimately overcoming resistance from some of the most powerful lobbying groups in the country. To his credit, the president showed admirable commitment to the issue, demonstrated by the fact that he kept re-enacting it as a presidential ordinance in a bid to pressure parliament to eventually pass it. His actions are made more commendable by the fact that the competition policy was not his own but inherited from the previous government.

With the law’s enactment, one can now look forward to the regulation of anti-competitive behaviour and cartels in the economy by the Competition Commission. Part of the reason small businesses often fail to flourish in Pakistan is because larger players create artificial and unfair barriers to entry to protect their market share and have the ability to manipulate prices. This is bad for consumers as well, since firms which are large and which tend to cooperate with one another to fix prices, do so at the expense of the buying public. The CCP has been a refreshing change from normal Pakistani government institutions in that it has relished its task of protecting both the Pakistani consumer and small businessmen and has been unafraid of taking on the most powerful of lobbies. Its former chairman, Khalid Mirza has rightly been lionised as a man who was willing to take a stand for principle regardless of the level of opposition he faced. One hopes that his successor will follow suit.

Perhaps other key state regulators such as the Pakistan Telecommunication Authority (which regulates tariffs and quality of service provided by landline, mobile phone and internet service providers), the National Electric Power Regulatory Authority (it approves tariff changes for electricity consumption) and the Oil and Gas Regulatory Authority (which oversees the petroleum, CNG and natural gas sectors) need to emulate the work and commitment of the CCP.

Published in The Express Tribune, October 11^th, 2010.