We need financial autonomy to be more effective, says CCP Chairperson Rahat Kaunain

BR Research: Competitiveness indicators have shown slight improvements compared to the previous year. What is your view on this trend?
Rahat Kaunain: Competitiveness is primarily an outcome of political policies and their implementation. Subsidies and protection of certain sectors and the slowing down of FDI flows, in short, all current economic conditions and government's reaction to this, together influence the competitiveness of the economy.
Pakistan has moved up five places compared to the previous year, in the ranking of countries in terms of competitiveness and that is a positive development, yet much work remains to be done.
BRR: What do you consider to be the way forward for improving the state of competitiveness within local industries?
RK: We have to move with exactly targeted goals. The biggest concern for us right now is expediting pending cases. There are about 200 cases right now and this tally is constantly rising. If we can get a particular bench appointed for deciding cases that have a significant impact on the economy at large; these cases can be resolved relatively quickly.
All regulatory bodies should point out those cases which they consider to be most urgent and significant for the overall economy and the courts should proactively help in taking these cases to a conclusion on priority basis.
BRR: Which cases would CCP prioritise, if a bench were to be formed to hear some cases filed by different regulatory bodies on a priority basis?
RK: Cases pertaining to the cement, sugar, LPG, poultry, telecommunications sectors would be our top priority. Among these cases, there are some cases where CCP has already passed a judgement and imposed fines. These should be addressed first because the actual enforcement of penalties will also send a clear message to other stakeholders. Issues of economic importance must be addressed on a priority basis through judicial endorsement. Secondly, there are many areas such as public procurement where the relevant rules are not followed or implemented substantively.
BRR: What do you think effective enforcement on the part of CCP entails?
RK: The entire economy benefits when the regulated entities comply with authorities. Effective enforcement requires the regulator to work independently, effectively and efficiently. Yet the regulator cannot work in isolation, simply passing orders. The regulated entities have to be onboard and they have to be committed towards following the directives of the regulatory body; that will make the key difference. However, that does not mean that the regulator has to work with stakeholders. Take the example of deceptive advertising in the telecom sector. Telecom operators should sit down together with their regulator and we would also keenly participate to develop guidelines for avoiding deception in marketing communications.
BRR: Why doesn't CCP go after companies involved in corrupt practices?
RK: We are protecting competition; not competitors. Secondly, do not confuse competition with corruption. Cracking down on corruption does not fall within the domain of CCP. We can take suo moto notice in cases as well, but such actions are taken on matters which are clearly contrary to competition laws; not on allegations.
CCP issued a policy note in the Engro and Lotte cases which stated that generally the Commission will not disturb those agreements which were formulated prior to the law coming in to force, although we are asking these companies to reformulate their contracts in line with competition laws. But, if it is established that there is abuse of any concessionary arrangement
BRR: Fertiliser prices have increased manifold in the last one year. Does CCP look into it?
RK: Ideally speaking, a competition agency should not be regulating prices when you believe in free market. Pricing is always an issue of supply and demand and not the cost factor. Unless there is a clear element of abuse, CCP would not want to intervene in price fixing. Most of the times, it turns out to be a futile exercise as judging the reasonability of price increase is not an easy task.
BRR: How have you been working on building the human resource?
RK: We have a lot of constraints. We have not been allocated what we requested. We have received less than 50 percent of what we demanded. It does not have to be a very big structure - the organisation should have competent people with a lean mean structure. We have been very lucky that our people are very dedicated. Our focus is that our base structure should be solid which will help run the organisation smoothly.
We have got a two-and-a-half star rating amongst the competition agencies in the world. We are benchmarked with the likes of Portugal, Brazil who have been around for 15 years. The primary reason that we got this rating is that we focussed on enforcement more than any other thing.
Our aim is to have a financial autonomy. I am very hopeful that it will happen as the government is very receptive towards the CCP.
BRR: Most of your cases are pending in the courts. How does it hamper your effectiveness as an organisation?
RK: We are working on that through our legal team. It is also the media's job to campaign for the CCP. There will be more seriousness and more compliance with law when they see the orders upheld.
BRR: What will be the biggest issues on public procurement?
RK: There are two things in public procurement. It is either collusive bidding or anti competitive tendering. For instance, it could be restricting of competition to a particular region or targeting a particular party. Cartelisation is bidding it is also very common; these are the aspects that we mostly look into.
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