Price controls can distort market competition, rely on competition to achieve health policy goals

The Economic Times, October 10, 2023

Reflecting on the relevance of the theme ‘Polycrisis’, Bhubaneswar Kalita, Chairman, Parliamentary Committee, Health and Family Welfare, explored the available policy tools to attain health policy objectives. He expressed the view that price control is not a sustainable solution and advocated for prioritising market development and the promotion of rule-based competition as preferable policy instruments.

Kalita addressed these points during his speech at the 8th CUTS–CIRC Biennial event, which, in its current iteration, aims to emphasise social sectors in the face of the ongoing global polycrisis.

Moderating the Inaugural Session on “Polycrisis and Social Welfare” Pradeep Mehta, Secretary General, CUTS International, highlighted “Climate-related disasters have profound implications for the global value chain, leading to broken supply chains, rising inflation, and widening socio-economic inequality within and across countries.” This two-day Biennial event, held during 9th-10th October, is the eighth in the series, and the theme this time is Polycrisis and Social Welfare.

The conference has notable figures attending, including distinguished professionals from organisations like the United Nations, the International Labour Organisation (ILO), and the OECD. Additionally, experts from competition authorities in Egypt, South Africa, and various African regions like COMESA and ECOWAS, as well as attendees from Fiji, Russia, Brazil, and Uzbekistan, are present. Furthermore, the conference has drawn a global audience, with participants from academia, policy research, law, and economics hailing from all corners of the globe.

Teresa Moreira, Head, Competition and Consumer Policy Branch, Division – International Trade and Commodities, UNCTAD, pointed out how trade has been an engine for development and economic growth, but it has also been fraught with challenges. The global community has to play an important role in addressing these challenges.

Willard Mwemba, Director & Chief Executive Officer, COMESA Competition Commission, was concerned about the rising food price, disruptions in the supply chain, market distorting import-export policies and climate crisis adding to the food insecurity. “COMESA Competition Authority is reviewing policies to ensure that climate change and environmental implications are considered in the public interest,” he added.

“External shocks, domestic policies including global crises, political conflicts, and climate risks that are slowing down economic growth,” Simeon Konan Koffi made both the internal and external factors responsible. In addition, he pointed to the growing terror activities in Africa and the persistent political instability impeding the socio-economic progress as a whole.

Countries over the world are facing the same challenges and many catastrophes, the point made by Hardin Ratishisusu, Deputy Commissioner, Competition Commission of South Africa conveyed that there is a strong case for deepening cooperation such as in BRICS, so as to ensure the attainment of the SDGs.

Mahmoud Momtaz, Chairman, Egyptian Competition Authority underscored his interest in promoting a strategy that is founded on enforcement, cooperation and collaboration and said “To uphold a level playing field, Egypt has set up a Committee on Competition Neutrality, headed by the Prime Minister and it has relevant ministers as members. The Committee has taken effective steps to address issues in the food and petroleum sectors” he informed.

The current concerns such as polycrisis, climate change, hunger, food prices, digital divide, etc., are at the top of discussions of the international competition community. However, coming from CUTS, these terms have special significance since it means representation of the Global South, added Andrey Tsyganov Deputy Head, Federal Antimonopoly Service (FAS) Russia. The conference has provided a platform for the voice of a million consumers.

The polycrisis is making us rethink our competition law rules to make it more inclusive. Víctor Oliveira Fernandes, Commissioner, CADE, Brazil raised questions about three major issues in Brazil, (i) how to incorporate social dimensions into competition assessment; (ii) how to scrutinise sustainability agreements in the new economy; and (iii) the future of digital markets.

Hardin Ratshisusu, Deputy Commissioner Competition Commission, South Africa, in favour of a cooperation added to the discussion that “Countries the world over are facing the same challenges and many catastrophes, hence there is a strong case for deepening cooperation such as in BRICS, so as to ensure the attainment of the SDGs.”

“It’s time for antitrust. It has to be used to attain social and environmental goals, not just economic efficiency. The Biennial is an excellent opportunity to do it.” Alexy Ivanov, Director, BRICS Competition Law and Policy Centre concluded, implying the value that the conference has added to the discussion on the burning issues.

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