May 16, 2008	Friday	Jamadi-ul-Awwal 10, 1429

ISLAMABAD, May 15: The World Bank has asked the government to check formation of cartels in cement, banking, sugar, automobile and pharmaceutical sectors to save consumers from unchecked price hikes.

Informed sources told Dawn on Thursday that the bank wanted the government to act on the recommendations of the Pakistan Business Council, Overseas Chamber of Commerce and Industry, Institute of Chartered Accountants and Management Association of Pakistan to break the cartels. Elements in bureaucracy serving “powerful business interests” have been blamed for the unchecked growth of cartels.

The sources said the World Bank had taken up the issue with the new government. It warned that if certain action was not taken against the cartels, the bank would be constrained to link its annual assistance, especially being offered to the Competition Commission of Pakistan (CCP) for ensuring prudent business practices.

The bank wanted the government to fully empower the CCP to deal with issues concerning cartels. It asked the government to enforce the competition law so that the CCP could play an effective role in checking restrictive trade practices by the cartels.

CCP chairman Khalid Mirza told Dawn that the commission was facing a tough task to curb vested interests in powerful business groups. He said that without enforcement of the competition law, restrictive trade practices could not be checked.

He said the previous government had promulgated a law and constituted a committee of officials, but failed to implement the law and the funds pledged to the CCP could not be allocated.

He said the new government should enforce the law and provide necessary resources to the CCP to expand its operational capacity to improve the competitive environment and check cartels.

“This in turn will help reduce essential commodity prices to the benefit of consumers,” he said.

He said the commission needed “tied sources of funding” to run its day to day affairs and this could be possible only after the implementation of the competition law in letter and spirit. He said the salary structure of the CCP members had not yet been finalised.

In reply to a question, Mr Mirza said the consultative process with the stakeholders initiated by the CCP immediately after coming into being about four months ago had yielded positive results. “Stakeholders now feel that the CCP is there to facilitate them by providing a level-playing field for all undertakings and ensuring a fair and healthy competition regime in the country,” he added.

He said the demand for converting the ‘toothless’ Monopoly Control Authority into an effective organisation was first made by Naveed Qamar (presently minister for privatisation) a few years ago in the National Assembly as an opposition member.Mr Qamar wanted to move a bill in this regard but he did not do it on an assurance given to the house that the government itself would table a bill in the matter.

After a lapse of about two years, the Competition Commission of Pakistan (CCP) Ordinance, 2007, was promulgated. The CCP, which replaced the Monopoly Control Authority, has been set up to improve business practices through competition and discourage cartels and cartel-like behaviours by the industrial sector.