"That all countries, including developing countries and LDCs, are adversely affected by anticompetitive practices is unquestionable," says a new UNCTAD report to be launched at UNCTAD XI in Sao Paulo.

The role of competition policy in promoting development will be the subject of a High Level Debate on 14 June 2004, held in parallel with the Conference. Participants will draw upon the report entitled, "Competition, Competitiveness and Development: Lessons from Developing Countries".

The report finds that well-designed competition policies backed by effective institutions are vital for development, including assuring gains for developing countries from international trade.

The key question before the High Level session is the one asked by the report: "What difference do the adoption and the implementation of well-designed competition laws and policies make to competitiveness and development, particularly in developing countries?"

In response, it offers compelling arguments about the importance of competition policy for successful development, including enterprise growth, and increasing supply capacity and international competitiveness.

The report is one of the few comprehensive collections of empirical studies written by competition experts from developing countries. For the first time, it pulls together case studies from advanced developing countries like Brazil, Peru, Republic of Korea, Thailand and South Africa, and Least Developed Countries like Nepal, United Republic of Tanzania and Zambia.

It compares their experiences of competition policy implementation to analyse key policy issues, including prerequisites for implementing competition policy, promoting enterprise growth, increasing supply capacity and improving competitiveness. It tries to quantify the positive linkages between competition, competitiveness and development.

Why is competition policy important

Experience shows that the creation of competitive markets empowers the poor, provides them with employment opportunities, and increases their access to cheaper and better quality products. Competition policy is an important institutional pillar for a market economy because competition stimulates production efficiency and the innovation vital for international competitiveness.

But many challenges must be solved. Globalization and liberalization of goods and services markets have the potential to improve national welfare, but market failures in developing countries can pose major problems. Competition law and policy are essential to ensure a "level playing field" in such a complex and dynamic economic environment. In effect, competition, competitiveness and overall economic performance are intrinsically linked.

The experiences cited in the report offer one clear conclusion: mainstreaming competition into development strategies is a vital contribution to successful development. UNCTAD has long been working to ensure that competition policy contributes to development prospects of developing and Least Developed Countries. Several specific reasons call for adoption of competition law sooner rather than later. Liberalization policies, privatisations and the monopolistic nature of most privatised utilities underscore the importance of competition policy to obtain the most favourable effects for efficiency and welfare. Such policies can also equip developing countries to avoid potentially negative impacts on consumers of international mergers and cartels.

Although national competitiveness means different things to different people, it involves building public-private partnerships to promote exports and economic development. Several contributors to the report argue that a development-friendly competition policy is best suited to promote competitiveness, while maintaining the right balance between the interests of all stakeholders.