Tuesday, March 7, 2017

Consumers are still the biggest losers for decades even with CA 2010.



Consumers are still the biggest losers for decades even with CA 2010.
It may sound so good to have in place Competition Act 2010 (CA2010) in Malaysia since June 2010.
According to LAWS OF MALAYSIA Act 712 COMPETITION ACT 2010 as Gazette on 10 June, 2010, the Application of CA 2010  are (1) This Act applies to any commercial activity, both within and subject to subsection (2), outside Malaysia. (2) In relation to the application of this Act outside Malaysia, this Act applies to any commercial activity transacted outside Malaysia which has an effect on competition in any market in Malaysia. (3) This Act shall not apply to any commercial activity regulated under the legislation specified in the First Schedule and the Minister may, by order published in the Gazette, amend the First Schedule.
And for the purposes of this Act, “commercial activity” means any activity of a commercial nature but does not include— (a) any activity, directly or indirectly in the exercise of governmental authority; (b) any activity conducted based on the principle of solidarity; and (c) any purchase of goods or services not for the purposes of offering goods and services as part of an economic activity.
In Malaysia with a small comparative domestic market, when most major and key economic activities can be conducted by the Government and its agencies or Government linked Companies growing bigger by the days, which are excluded from the CA2010, hence CA 2010 does not really make any major impact in the economy for the consumers at large.
Sultan of Perak Sultan Nazrin Shah.said “Monopolistic behavior within the economic realm of a country would constrain their economic growth,” at the opening of the Malaysia Competition Conference 2017 in Petaling Jaya on 6th March, 2017 Monday.
He went on to say that when firms begin to display monopolistic behavior, consumers were the biggest losers.
If we analyse the economic sectors in Malaysia (Government sector/excluded activities and private sector) by the size under the excluded activities is huge, indeed consumers are the biggest losers for decades.  We can list out all those sectors which are under Government regulations and controls.  Sectors such as water, electricity and energy, food including sugar and rice, medicines and health, infrastructure and tolls, various Government departments once but now turned into designated commissions all conducting business activities.
I hope an official proper review or investigation into sort of “monopolistic” behaviour possibly unintended to harm the public or consumers but the consumers are at their mercy as no choices of options.  Would the Government consider in its governance that a corrective measure be done to regulate how prices of such excluded activities had been going up in recent years unsupervised.  Such scenario can give the impression that taxpayers and consumers are “over-taxed” when Governmental activities should be free or simply at nominal low charges. Is the Government “guilty” of de-facto “monopolistic” behaviour too?
Going by such unhealthy development of poor services and higher prices of the excluded services, the consumers are even greater losers by all standards.  So the CA2010 is itself can be a self-defeated piece of legislation which needs to have another constructive look to be meaningful.
I also wonder if in 7 years, any positive action and outcome has arisen from the said act when prices in Sabah had been rising hefty in many products and services across the board.  Is CA2010 a red herring in the prevalent system now unless a revamp is done?
Joshua Y C Kong 7th March, 2017

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