Transcript Kheshwar Jankee Chandan, University of Mauritius, Mauritius

Competition Policy : The case of Mauritius
RESEARCH TEAM : Dr k. Jankee , Mrs R. Peerun
& Mr S. Bundoo
Contents
1.0
General background of the Mauritian Economy
2.0
Competition policies
3.0
Market Structures in Mauritius
4.0
Competition Law and the Role of the Competition Authority
5.0
Interface between the regulatory institutions and competition
regime
6.0
Participation in Regional Trading Blocs
7.0
Consumer protection law
8.0
Conclusion
General background
• Small island economy in southern Africa with area of only 2040 km2
Increased life expectancy, high literacy rate , multicultural
•Mauritius is well known for its econimc miracle in the 1980s and 1990s
with average growth rates of over 5 % and per capta income over
US $ 4000.
• Benefited from preferential markets
•Slowdown in economic activity : high unemployment , high budget
•deficit
• Political democracy
Table 1: Selected economic indicators: 1968-2003
Year
1968
1980
1990
2000
2002
2003
GDP at basic prices (Rs Millions)
Real GDP Growth (%)
Inflation rate
Population
Unemployment (%)
Per capita income (Rs)
Tourist arrivals (thousands)
Literacy rate (%)
Total external debt (Rs. M)
Debt service ratio (%)
Source: CSO and BOM reports
827
8697
-10.1
42
969872
7719
115080
-
39629
7.3
13.5
1058800
2.8
37429
278010
81
14234
-
119529
9.3
4.2
1186873
8.8
100680
656453
85
28408
9.7
124954
2.0
6.4
1210196
9.8
117256
681648
86
30046
8.5
137206
4.4
3.9
1222811
10.2
128314
702018
86
28658
8.2
7
794746
104846
15553
-
Competition policies
•Trade policy : External trade From import substitution to export led growth taking
advantages of LOME convention, multi -fibre agreement, development of EPZ
sector , sugar protocol
•Trade in services : Tourism , banking and financial
•Diversification of the economy and development of new sectors such as fishing,
ICT
•diversification of markets ; AGOA and regionalisation , SIDS
•Domestic trade : reduction in tariffs leading to higher competition for domestic
producers . However, domestic producers are fairly protected especially in
agricultural imports and even non agricutural ones
•Import quotas still apply to a number of commodities : potatoes,onions, garlic and
salt.
•The State trading corporation, Agricultural marketing board, Meat authority have
import monopoly and fixaximum prices on some strategic products such as flour,
rice, cement , petroleum products , potatoes, onions , garlic and meat.
• Dismantling of quantitative import restrictions
•Investment policy : Incentives

Agricultural Development Scheme/Freight Rebate Scheme

Export Enterprise Scheme

Health Development Certificate Scheme

Hotel Management Scheme

Industrial Building Enterprise Scheme

Information and Communication Technology Scheme

Integrated Resort Scheme

Modernisation and Expansion Scheme

Pioneer Status Enterprise Scheme

Regional Development Certificate Scheme

Technology Diffusion Scheme
Government Procurement
•October 2000 Central Tender board Act
Public purchasing call for tenders Over Rs 500, 000
special thresholds for civil engineering works
tenders are open only to local firms and local agents of foreign suppliers
price preferences up to 15% is given to local suppliers
International agency has its own guidelines
Wage policy
1. Tripartite wage negotiation ; PRB and NRB
Labour law and high degree of govt intervention ? Debate
Role of Small and medium entreprises
•Promotion of SMES in terms of institutional infrastructure, financing
and several incentives
• Creation of employment
• Linkages in the economy and democratisation of the economy
Market structures
Market concentration in many sectors such as public utilities, television
broadcasting, import and distribution of cement, banking, insurance, air
transport , petroleum products
• presence of restrictive trade practices
•Role of parastatal bodies such as State trading corporation in importing of
essential products and use of price controls
•Agricultural marketing board
•Central electricity board, central water authority, Waste water authority,
Mauritius Freeport authority , and others in various sectors of the economy
•Mauritius meat authority, State investment corporation
•There is a big debate on privatisation or corporatisation ????
Telecommunications : Open up following commitments with WTO up to
January 2003.Monopoly situation
November 2000 strategic partnership with France telecom ( 40%) Monopoly
in terms of connectivity till 2008.
Role of information communication and technology authority regarding
licences and tariffs.
Central electricity board and Independent power producers
central water authority
Cargo handling corporation
construction and cement industry
Tourism and air transport
financial sector
insurance sector
Agricultural sector
competition law and Role of competition authority
1. Competition act ( 2003) : legal framework for controlling
restrictive trade practices and regulate competition , offer fair
trading
• establishment of an office of fair trading as the competition
authority
•competition appeal tribunal and competition advisory council
•advise minister , maintain communication with consumer
organisations
•ACT : abuse of monopoly power, collusive agreements, anticompetitive agreements and bid -rigging.
• Exclusion of goods and services like aviation and harbour
services, broadcasting services, electricity, financial services,
freeport services, ICT, postal services, water etc
Interface between Regulatory bodies and competition regime
• Financial sector ; role of the Bank of mauritius and financial services
commission
•New legislations and institutional , banking acts , securities , insurance ,
•Utilities sector : Utility Regulatory authority , ICTA
•Regional cooperation and competition policy
•There is a big debate on the a uniform competition policy
•
Consumer protection law
•Protection ( price and supplies control )_ ACT 1998 provides for better
protection of consumers in terms of fix maximum mark ups, code of practice,
labelling, information, Vat charges, horading, warehusing , establishment of court,
Competition act 2003
FOOD Act ( 1998)
Genetically modifies organisms ACT
Consumer protection UNIT
Conclusion
• historical and structural factors
•Role of government
•Need to develop competition culture especially following the
loss of markets
• liberalisation and market forces
•Delay in greater role of the competition authority
•Competition is not only influenced by economic factors