1.

Importance
of competition in the
economic policy
regime
1. Free market vs. fair market
2. Protect social welfare of consumers and
economic efficiency
3. Encourage R&D and innovation
4. Ensure efficient allocation of resources and
poverty reduction
2. Base of competition policy
1. Constitution
2. Governmentpolicy
3. Commitment in the WTO deal for membership

Market structure and

competition
Barriers to entry and
competition
�Quantitative restrictions
� Certain laws and regulations place restriction
(electricity,
telecom)
� Complicated business registration
� Lack of transparency and accountability
(procurement
and licensing)
� Weak institution and governance (IPs,
counterfeit goods,
taxes)
� Practice of unfair competition:
�Conspire to limit access to markets/suppliers
� Receive subsidies
� Violate IPRs
� Avoid labor taxes/regulations

Sectoral policies
Electricity
�Electricity in Cambodia: low
capacity of power
generation and electrical grid,
limited access,
very high costs
� Electricity policy is stipulated in
electricity law:
�To protect consumer right (reliable and
adequate
power supply, reasonable cost; promote
private
ownership and competition)
� Transmission license is reserved for
the EDC
� Licensing system seems to contradict
with the intent
of the law
Sectoral policies
Telecommunications
�Information and communication technology in
Cambodia:
lowest level in South East Asia, limited access
and high
costs
� Telecom policy: promote open, fair and
competitive market
� MPTC: body to issue license to operators on
the basis of
necessity for development network,
infrastructure, expected
coverage and consumer interest
� No clear legal provision governing licensing
procedures
� MPTC is both regulator and operators

Sectoral policies
Banking
� Absence of regulations and
procedures limits the
scope of competition (E.g. merger
and
acquisition, business diversification)
� Consumer reliability vs. lower
interest rate:
minimum capital requirement of
US$13 million,
10% of capital for guarantee, and
8% reserve
Requirement