An estimated 22% of the world’s largest 100 firms are now effectively under state control. This is the highest percentage in decades. The upsurge of SOEs as global competitors has given rise to concerns related to a level playing field.  

Some business competitors and observers claim that compensation granted by governments to SOEs in return for public policy obligations carried out at home as well as other advantages enjoyed by SOEs but not privately-owned firms can give SOEs a competitive edge in international markets. The challenge is that in a globalised economy, some state interventionist policies can have beggar-thy-neighbour effects. The risk of not addressing such concerns is that trade and investment partners may revert to protectionist responses, which in turn may discourage much-needed international investment.

In this context, the OECD hosted a half-day dialogue on the topic of SOEs as global competitors. 

PROGRAMME

The agenda focused on three main issues:

• In the face of increased internationalisation of SOEs, what can be done by home and host countries to ensure investment remains open with assurances that all companies compete on a level playing field?

• In view of the inclusion of provisions on SOEs in recent trade and investment agreements, what aspects of these agreements cover commitments to a level playing field? What is to be expected in-practice on the part of home and host countries to ensure implementation?

• Where do the gaps remain and how can we support an open, non-discriminatory environment for doing business globally? 

Documents and links

OECD Guidelines on Corporate Governance of SOEs

OECD work on freedom of investment

Achieving competitive neutrality

Competition assessment toolkit

Fighting bid rigging in public procurement