Tuesday, March 19, 2013
Posted by D. Daniel Sokol
R. Ian McEwin (Competition Consulting Asia & Chulalongkorn University) provides Some Recent Developments in ASEAN Competition Law.
ABSTRACT: All countries in Southeast Asia are hierarchical and authoritarian to some degree, which has implications for competition. All countries are marked by considerable inequalities in status, wealth, and education. With the exception of Singapore, corruption and cronyism are widespread. Big business in Southeast Asia is mainly dominated by ethnic Chinese families, originally brought in during the 18 and 19th centuries as cheap labor or with skills as traders, tax farmers, miners, and artisans-skills lacking among the indigenous population (who were mainly farmers). To protect against property expropriation, taxes, and limited ability to enforce contracts, they developed their own financial networks and relationships based on family and clan groups-perhaps best described as closed shops that sought to limit competition. At the same time, self-serving political elites awarded monopoly privileges.
Nevertheless, economic necessities now drive public policy in this region. While patronage is still important, competition is now increasingly seen as necessary for economic development-but competition upsets traditional monopoly privileges that form the basis of much elite wealth and is resisted politically by governments of all ideological persuasions. Using competition law to improve economic outcomes, if properly enforced, disrupts pre-existing monopoly privileges.