Completing the transition to a competitive domestic economy
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COMPLETING THE TRANSITION TO A
COMPETITIVE DOMESTIC ECONOMY
OECD Economic Survey of the Czech Republic 2014
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Income convergence must rely on a stronger service sector
• The Czech private service sector is among the smallest In percentages of total gross value added, 2012
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Advantages of a stronger service sector
• Lower prices of service inputs – Boost competitiveness
• More innovative services– Boost job creation and wages
• Exploit domestic resources of growth– Requires human capital accumulation
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Competition is inhibited by :
• Red tape– Gold plating and entry barriers for
professional services• Public ownership• Uneven application of competition
policy– Little success in uncovering hard-core
cartels• Weak regulation of network
sectors
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Despite progress, there are still barriers to entrepreneurship
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Czech Republic has the highest number of regulated professions in the EU
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Corruption is another entry barrier
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Competition friendly measures• Reduce legal delays for contract
enforcement• Lower barriers to entry in (professional)
services • Improve regulatory impact assessments• Control SOEs within a single authority
with professional corporate governance • Privatise and divest business-related
state-owned enterprises and activities
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The competition authority initiates relatively few cases and often in public tender bid rigging
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Reinforce competition law enforcement
• Secure a well-functioning leniency programme
• Improve the scope for private litigation• Increase sanctions for bid-rigging in
public procurement• Use sector inquiries • Remove the food retailing regulation
from the competition policy framework
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Network prices are relatively high: in the mobile phone area as well as in….
OECD 100 calls mobile basket¹, in USD, November 2013
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High pre-tax industry electricity prices compensate households (unlike DNK and NLD) and are compensated by the public purse
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More competition in network sectors
• Better co-ordination between the competition authority and sector regulators
• Effective independence of all network regulators
• Effective ownership unbundling or holding structures with financial separation of all activities
• Secure cost-based access for MVNOs, and remove barriers for becoming Full MVNOs
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• Thank you• Děkuji