5th Sofia Competition Forum - Opening Session
13 November 2014
Chairman Petko Nikolov,
Heads of Competition agencies,
Distinguished experts,
I am greatly pleased to take part in the fifth edition of the Sofia Competition Forum. It is a demonstration of the positive impact of the collaboration between the government of Bulgaria, the countries of South-Eastern Europe and UNCTAD in the area of competition policy.
The presence today of a number of representatives from Competition agencies from all over the world, business, consumer and regulatory organizations underscores the importance given to competition law and policy in the Region.
I am delighted to see the Sofia Competition Forum fulfill its objective of fostering cooperation between neighboring countries in the area of Competition Policy. But it has also reached beyond and expanded its activities and collaboration with major competition authorities, the International Competition Network and the OECD.
Ladies and gentlemen,
Competition is the linchpin of a well-functioning market economy, and although we sometimes probably fail to acknowledge, it is as well an essential element of economic development.
Competition laws are implemented in countries with different economic conditions, from industrialized to developing countries or economies in transition. There is widening consensus among the different jurisdictions, including in Eastern and South-Eastern Europe, that the basic objective of competition policy is to sustain competition as the most appropriate means of ensuring efficient market outcomes in the free market economies.
In other words, we recognize that, as Ken Heyer, a senior economist of the US Department of Justice, once nicely put it "efficiency is the goal and competition is the process". We do not seek competition for the sake of competition, but because of the important efficiencies it can deliver to society. It is precisely these efficiencies, in the form of lower prices, more and better products or increased productivity, that are essential for the development process.
Thus, competition policy cannot be seen as a marginal or a luxury item, "to be dealt with later" within development policy. Rather, it is an essential part of it. Implementing a competition policy should not be postponed because it is needed to achieve development.
And if you allow me, I would take the case for competition even further. As we foster competition in the market, we also help strengthen democratic rule by distributing economic power. Competition ensures that market leadership is not held by those who lobby the most, but by those who innovate the most. Or in other words, it ensures that market leadership is not held by those with the best political network, but by those with the best products and services. This brings me to another very important dimension of competition policy: consumer protection. It refers to the protection of the society against economic interests that do not take into consideration people's well-being. And, competition is a means to protect consumers from high prices, obsolete products, or abuses by firms with the ability to exercise their market power. Thus, if an economy strives to sustain a high growth rate, while at the same time protecting consumer welfare, solid norms of competition are essential.
This is why the United Nations Conference on Trade and Development considers competition policy to be inseparable from development policy. Consequently, the organization has been working over the past four decades towards the formulation and implementation of norms aimed at preventing or prohibiting any form of restrictive business practices, such as cartels.
In this connection, I would like to thank our hosts for organising a workshop on the revision of the United Nations Guidelines for Consumer Protection, which will take place in this venue tomorrow afternoon.
Ladies and gentlemen,
I would like to refer now to an important aspect of the implementation of competition policy: the need to sensibly incorporate the norms of competition, without precipitation. Each country must take into consideration its specific characteristics and circumstances when formulating and implementing competition policy, and choose the rhythm at which to advance. Thereby, the promotion of greater regional and sub-regional convergence of competition policies and laws should also follow a gradual approach. The need to promote greater convergence in this area should not imply the imposition of measures which countries are not ready to absorb. However, following your own pace does not preclude you from learning from the experiences of other countries. In fact, these experiences can also help you accelerate the implementation of competition policy in your own jurisdictions.
One of the ways UNCTAD supports competition authorities in strengthening their performances is through peer reviews. UNCTAD's peer reviews are non-adversarial and aim to provide impartial and constructive feedback on best and relevant practices to interested countries.
This year, as part of its 10-year anniversary, the Albanian Competition Authority volunteered for an UNCTAD peer review of competition policy. The decision demonstrates the commitment of the Albanian state to create a competition authority that benefits consumers and businesses alike. This review will be presented in Geneva in July next year.
Global trends towards a wider adoption of competition rules and policies are a strong signal of better corporate governance in both developed and developing countries. Furthermore, competition and consumer policies provide a mechanism by which governments can fight corruption, such as in public procurement, protect their populations, especially the most vulnerable, and encourage better corporate governance practices. The overall health of a country's economy, its prospects for growth and its economic efficiency are directly related to the quality of corporate governance.
In my view, South-East European countries cooperating on competition issues may wish to consider widening their focus through, for example, including a study of the inter-linkages between corporate governance and competition and consumer policies. Such a study could propose ways to improve corporate governance in the region in a way that sustained growth and inclusive development are fostered. The study might seek to determine how improved competition policies and transparent consumer policies can enhance the competitiveness of your country enterprises and ensure checks and balances in corporate structures that improve efficiency at the same time as they increase equity.
On that note, let me wish you an interesting deliberation, and a successful outcome on the fifth edition of the Sofia Competition Forum.
Thank you.
