Jordan started its liberalization program in 1989 at the behest of the World
Bank and the IMF, and after an economic collapse that was brought about by
ballooning, unsustainable, and bad spending habits. Overspending on unnecessary
and low-quality ventures (non-productivity enhancing type of spending), had
swelled over a decade and a half prior to 1988, the year that preceded the
storm. Thirty-three years later, the average per capita real income in Jordan
remains below that of 1988, which indicates, among other things, that
government spending remains profligate.
One area of apparent waste is the institutional framework of competition
in Jordan.
اضافة اعلان
It is well known
in economics that competition legislation is the most important framework for
the development of a country. Normally, the competition, law applies to all
production, commerce and services in a country, as well as all international
economic activities that have effect(s) on competition in the country.
There was no
specific legislation governing competition in Jordan before 2002. After two
failed attempts in 1995 and 1998, Jordan enacted the Competition Law No. 33 of
2004, which came into force on September 1, 2004, and replaced the Temporary
Competition Law No. 49 of 2002. Revisions, in my view, have weakened the law.
Furthermore, according to several studies, implementation of competition rules
and regulations remains weak in Jordan relative to the powers extended to other
sector-specific regulatory bodies in the country, which also happen to be more
costly.
So why not have one supra regulator of competition instead of the various commissions, and thus save funds and avoid waste?
Let us look at the
regulatory agencies in the country, which are bodies tasked with regulating
competition in their sectors. Note that their powers may exceed those of the
Competition Directorate that is nestled within the Ministry of Industry, Trade,
and Supply, since the directorate is administratively below them. The
individual commissions, which carry out regulations within their respective
sectors, tend to maintain large numbers of workers and spend millions per year.
In the 2021 Government Budget, four regulatory commissions spent JD32.7
million: the Energy and Minerals Regulatory Commission (JD4.8 million); the Telecommunications Regulatory Commission
(JD8.6 million); the Civil Aviation Regulatory Commission (JD10.2 million); and
the Land Transport Regulatory Commission (JD9.1 million). Over JD462 million
was spent on these commissions in the period 2011–2022. Moreover, the four
commissions employ close to 800 employees. In comparison, the Competition
Directorate has a few employees and a budget that is in the hundreds of
thousands at best.
The upshot is the
following: the function of regulatory commissions is principally to safeguard
competition in their sectors, while that of the Competition Directorate is to
protect competition throughout the Kingdom. So why not have one supra regulator
of competition instead of the various commissions, and thus save funds and
avoid waste? The answer is not so straightforward.
Some detractors
would mention the technical expertise that is required to regulate these
sectors. The answer is that competition issues are the same (price, quantity,
and quality), regardless of sectors. When a case arises that requires expertise
in a sector, technical experts are brought in to help with the investigative
process.
Another question
is what to do with all the staff? Most of the employees in these commissions
are on contracts; they can be let go once the contracts expire or end. Some can
be employed within their respective ministries, and those who were seconded
from ministry departments can be returned to their old departments.
The whole concept
of creating regulatory bodies followed the example of the Telecommunications
Regulatory Commission, established in 1995, which was considered a success
story and thus spurred the creation of other regulatory bodies.
Imagine how much
money could have been saved had the above suggestion been adopted 10 or 15
years ago.
Yusuf Mansur is CEO of the Envision Consulting Group and
former minister of state for economic affairs.
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