Sunday, October 09, 2011

EFN-Asia 6: Conference in Kuala Lumpur, Oct 10-12

The annual Economic Freedom Network (EFN) Asia conference will start tomorrow in Kuala Lumpur, Malaysia. I will be going there as one of the World Cafe Table Hosts on October 11. I will also see there old friends in the Asian free market movement like Barun Mitra (Liberty Institute, India), Parth Shah (Center for Civil Society, India), Aco Patunru (LPEM, Indonesia), Baagi Shagdar (EBI think tank, Mongolia), Feng Xingyuan (Unirule and CIPA, China), Mr. You (Japanese for Tax Reforms), Wan Saiful Wan Jan (IDEAS, Malaysia), Tom Palmer (Atlas, USA), and a few others.

Here is the announcement at the FNF-Manila website,

Competition: Engine for Prosperity

The annual Economic Freedom Network Asia (EFN) Conference is set on October 10-13, 2011 in Kuala Lumpur, Malaysia. Around 200 economists from all over the world are expected to attend.

Sec. Florencio Butch Abad
The Philippine Department of Budget and Management (DBM) Secretary Florencio “Butch” Abad will give the keynote speech. The role of government in promoting competition, the benefits of competition in public service delivery, and the enforcement of competition policies will be discussed. A resolution is expected to be formulated after the three-day activity. The Economic Freedom of the World Report will also be launched at the event.
The EFN Conference is jointly organized by the Friedrich Naumann Foundation for Freedom (FNF), Institute for Democracy and Economic Affairs (IDEAS) and Center for Public Policy Studies (CPPS).

This will be the 6th EFN-Asia that I will attend. I have attended the 2004-2006 (HK, Phuket, KL respectively) conferences via Jo Kwong and Atlas when Atlas partnered with FNF in holding a one-day forum prior to the EFN main conference, same hotel.

Then I attended the 2009 (Manila, of course) and 2010 (Jakarta) conference. Last year I was a panel moderator (I thanked Jyoti Sachavirawong for the invite) in Jakarta, and this year, I will be one of the Table Hosts, World Cafe, it's a new form of interactive, face to face discussion, rather fast-paced.

A few weeks ago, I attended the CMFR forum on Competition Policy held at the Asian Institute of Management (AIM) in Makati City. The main speaker was Atty. Tony Abad, also a friend. Tony has been advocating the legislation of a competition policy for at least two decades now. He wants to have a competition policy AND create a new govt bureaucracy called the Fair Trade (or Anti-Trust) Commission at the same time. 

During the open forum, I spoke and argued that government ruling on what is competitive or anti-competitive is already corrupted. Given many players and firms in a particular industry, if my price is higher than my competitors, I can be accused of price gouging. If my price is almost the same as my competitors, then we can be accused of price collusion or price cartelization. If my price is lower than my competitors, I can be accused of predatory pricing. So whatever pricing I will take, I or any player can be accused and harassed by the government's Fair Trade Commission (FTC) or similar bodies.

I further argued that the best "competition policy" is NO policy on the subject. Government will just deregulate all sectors and sub-sectors and allow as many players and competitors as possible. Unfortunately, the main creator of monopolies or oligopolies is the government itself, through the Constitution (especially the 40% maximum foreign equity for many sectors and utilities, reserving the 60% to 100% equity to Filipino businessmen only, which is an indirect form of cronyism and business protectionism). Then we also have a system called Legislative franchising, utilities will first get a franchise from Congress -- and be subject to possible Congressional extortion -- before they secure various business permits from local and national government agencies.

The other national government agencies also have their own set of business regulations and restrictions. Plus the local governments (Mayors, Governors, their respective city/municipal and provincial councils).

Thus, a good competition policy for me, is the removal of many business restrictions in the Constitution, the removal of the Congressional franchising system for utilities, media and other sectors, and for local governments to have liberal policies that are conducive to business, entrepreneurship (micro to medium to large) and job creation.

In the absence of constitutional change that will lift and remove those restrictive policies, it is important to persuade Congress and local governments to have more liberal and pro-market policies.

No comments: