Some Recent Developments in ASEAN Competition Law

R. Ian McEwin, Feb 13, 2013

All countries in Southeast Asia are hierarchical and authoritarian to some degree, which has implications for competition. All countries are marked by considerable inequalities in status, wealth, and education. With the exception of Singapore, corruption and cronyism are widespread. Big business in Southeast Asia is mainly dominated by ethnic Chinese families, originally brought in during the 18 and 19th centuries as cheap labor or with skills as traders, tax farmers, miners, and artisans-skills lacking among the indigenous population (who were mainly farmers). To protect against property expropriation, taxes, and limited ability to enforce contracts, they developed their own financial networks and relationships based on family and clan groups-perhaps best described as closed shops that sought to limit competition. At the same time, self-serving political elites awarded monopoly privileges.

Nevertheless, economic necessities now drive public policy in this region. While patronage is still important, competition is now increasingly seen as necessary for economic development-but competition upsets traditional monopoly privileges that form the basis of much elite wealth and is resisted politically by governments of all ideological persuasions. Using competition law to improve economic outcomes, if properly enforced, disrupts pre-existing monopoly privileges.

In addition, vague and ambiguous goals mean interest groups can be favored. But a clear emphasis on a single goal-promoting economic efficiency-provides greater predictability and certainty and limits the ability of regulators and courts to promote entrenched vested interest group welfare.

Competition law goals in Southeast Asia, however, are not all singular. They vary from the single unambiguously economic in Singapore to the broad goals expressed by the very important founding principle of pancasila in Indonesia which stresses responsibility to a monotheistic God (your choice), respect for humanitarian values of dignity and integrity, national unity and social justice.

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