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Competition

Towards a Level Playing Field between SOEs and Private Entities in ASEAN

 

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The ASEAN Competition Action Plan (ACAP 2016-2025) envisages a regional report on the impact on competition of state-owned enterprises (SOEs) and government-linked monopolies (GLMs) in ASEAN.


Within this framework and in co-operation with the UK Government and the ASEAN Competition Authorities, the OECD will undertake an assessment of special rights and privileges granted to SOEs and GLMs that may have a distortionary effect on competition in the logistics sector.

 

Why the Logistics Sector?

The ASEAN Secretariat (ASEC), the ASEAN Expert Group on Competition (AEGC), the OECD and the UK Government agreed that the Project will focus on the logistics sector.


Firstly, the focus on one sector has the benefit of potentially harmonising regulations and thus promoting a more integrated logistics market.


Secondly, logistics is among the twelve priority integration sectors identified in the ASEAN Economic Community Blueprint. Efficient logistics can play a significant role in increasing a country’s economic development by facilitating international trade and improving its competitiveness. By developing an efficient logistics system, a country can enhance its connectivity to better serve their exporters and importers, and satisfy the needs of regionally integrated production facilities for reliable just-in-time delivery of inputs/outputs.


How to Address these Challenges?

The OECD will build on its significant work on competitive neutrality, which is well suited to achieve these ambitious objectives. This work is specifically designed to identify shortcomings in national regulations and policies that hinder the efficient functioning of markets to the detriment of businesses and consumers.


Objectives and Outcomes

Government’s support to SOEs can take many forms, including selective subsidies, explicit or implicit loan guarantees, preferential purchasing, preferential standards, support for unnecessary new capacity, and regulatory or tax favouritism. Such advantages granted to commercially oriented SOEs by virtue of their nature can result in competitive distortions.


The Project aims at promoting a level playing field between SOEs and private entities in the logistics sector. The report will help ASEAN governments to detect special rights and privileges granted to SOEs that may hinder the efficient functioning of the logistics sector and affect long-term growth and competitiveness. Moreover, it will provide recommendations on how to mitigate distortionary effects, avoid undue restrictions to competition, and promote fair competition. The goal is also to support the development of a pro-competitive regulatory environment by making recommendations for pro-competitive reforms of special rights and privileges that go beyond their intended policy objectives.


Beyond its immediate impact on competition policy, the Project will help lay the foundations for reducing inequality, lower non-tariff barriers to trade, and improving the business environment and ease of doing business in ASEAN. A rule-based, predictable environment based on international best practices will ensure a competitive and open economy. This in turn will allow businesses seeking access to ASEAN to enter, operate and invest effectively.

 

The project will lead to four main outcomes:

1

An OECD report describing the competitive situation for the key SOEs in the logistics sector and identifying any exclusive rights or special privileges granted to such SOEs, as well as their potential justification and rationale.

2

Building on stakeholders’ comments and available data, an analysis on possible improvements also in light of the international best practices and relevant case studies.

3 Workshops and meetings with government officials on identifying special rights and privileges for SOEs that hinder a level playing field, and less restrictive alternatives to achieve the same socio-economic objectives.
4 Recommendations to ASEAN governments on the special rights and privileges identified, in order to reduce competition distortions in the logistics sector.

For queries about the project, please contact: asean.competition.policy@oecd.org

 

Project Work Streams

1

Achieving more pro-competitive regulation in ASEAN

2

Towards a level playing field between state-owned enterprises and private entities in ASEAN

 

The Project Roadmap

(July 2018 to December 2020)

1

Select the market where the analysis will be undertaken and identify the role of the SOEs

2

Identify SOEs’ special rights and privileges

3

Conduct an in-depth analysis of these special rights and privileges

4

Formulate recommendations for reforming special rights and privileges, and assessment of viable alternatives, also in light of the SOEs’ rationale.

The launch of the report and the capacity building seminars are scheduled to take place by December 2020.

 

» Fostering Competition in ASEAN

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RELATED LINKS

ASEAN Competition Action Plan (2016-2025)

ASEAN Experts Group on Competition (AEGC)

Association of Southeast Asian Nations (ASEAN)

ASEAN Economic Community Blueprint

 

Other OECD Work 

Fostering Competition in ASEAN

Achieving more pro-competitive regulation in the logistics sector in ASEAN

Towards a level playing field in the logistics sector in ASEAN

Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions

OECD Competition and Macroeconomic outcomes 

OECD Competition 

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