Saturday, February 26, 2011

Competition Law in Cambodia

Cambodia is taking initial steps towards economic integration into ASEAN and membership in the international economic community.  These policies entail creating private markets at home and seeking membership in the World Trade Organization (WTO) abroad.  Despite efforts at creating a market economy, Cambodia has no formal competition law.  This is not surprising.  Cambodian efforts must first focus on the basic building blocks of the commercial infrastructure B property law, contract law, a civil code, securities regulation, and corporate law.  Ironically, while competition law is useful in policing behavior in established markets, it is of relatively little use in constructing markets in the first instance.  At initial stages of development, poorly designed state policies and corrupt public officials are a greater threat to free markets than are private cartels and price fixing agreements.  To create robust private markets it is therefore necessary to first lay the foundation of good public governance. 
This chapter examines competition law and policy in Cambodia.  Section one reviews Cambodian competition law and the relevance of competition policy in economic development.  Section two highlights specific limitations of competition law in fostering Cambodia=s development.  Competition law cannot create markets.  Competition law cannot create an independent judiciary.  Competition law cannot constrain government actors who fail to act in the public interest.   Finally, section three outlines policies Cambodia could follow that would help foster the growth of the private sector and the creation of economic markets.  These measures include making the constitutional systems of checks and balances a reality, passing an administrative procedures act, fighting public corruption, continuing efforts at liberalizing international trade, and introducing competitive bidding into public contracting. 
I           Competition Law in Cambodia:  Like a Fish Needs a Bicycl
Cambodia still faces enormous social, economic and political challenges in its efforts at national reconstruction.  Given the breadth and enormity of these obstacles, one may legitimately ask, at this point in time at least, why bother with competition or antitrust law?  In the 1970s, feminist Gloria Steinem provocatively declared that a woman needs a man like a fish needs a bicycle Can the same be said about Cambodia and competition law?  A skeptical attitude toward competition law can be extended to developing countries generally.  The necessity of antitrust law in these settings is not obvious.  
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