CCP seminar: Competition, rivalry ‘central to functioning of market’

Speakers say healthy business environment leads to innovation, investment.

KARACHI: A stable economic climate, a reliable business environment and an orderly system of law and contract enforcement provide an important milieu for innovation and competition, says Dr Joseph Wilson, Chairman of the Competition Commission of Pakistan.

He was speaking at a seminar on the “Role of competition in improving investment climate”, held by the CCP here on Tuesday in which the speakers highlighted the importance of a healthy competitive environment for boosting foreign and domestic investment.

“If you’re an investor willing to invest globally, you would eventually be going to realise that the most competitive markets around the world are the ones that consistently reward investors,” Wilson said.

He quoted the latest Global Competitiveness Report that ranked Pakistan 133rd, down nine places compared to the previous ranking. The purpose of the seminar was to discuss ways and means to improve the standing of Pakistan on world economic map, he said.



Wilson pointed out that economics and competition literature talked about the behaviour of market players, ie, buyers and sellers, elements of cartelisation and possibility of rent-seeking by monopolist or dominant players.

“This literature never envisaged the entirely different meaning of rent-seeking created in this city (Karachi) by players who are neither buyers nor sellers and whose actions hinder – even hurt – small and medium enterprises.”

Wilson cited the benefits of competitive markets which included efficient allocation of resources resulting in innovation, better products, more choice and, most importantly, reasonable prices. These were important factors for consumer welfare, poverty reduction and economic growth, he said.

CCP’s former chairman Khalid Mirza said the role of competition and rivalry between economic agents was central to the functioning of the market, which was perhaps a most significant aspect of the investment climate.

A social investment climate is characterised by a robust economy and financial stability. “To achieve all this, there are four fundamental elements – maintenance of macroeconomic stability, building efficacious financial institutions, compliance with recognised governance norms and putting in place capable, fully empowered, independent regulators/competition enforcers,” Mirza said.

Later, three sessions were held on the nexus between competitive markets and investment, factors hampering investment and competition and investment, and cross-cutting issues within the World Trade Organisation (WTO) framework.

The speakers stressed the need for promoting competition in order to create a healthy environment for attracting investment. Effective competition policies fostered economic welfare through creating a level playing field and a successful implementation of the policies resulted in elimination of anti-competitive practices, they emphasised.

Published in The Express Tribune, November 6^th, 2013.

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