Competitive Advantage and Competition Policy in Developing Countries

Competitive Advantage and Competition Policy in Developing Countries

The CRC Series on Competition, Regulation and Development

Edited by Paul Cook, Raul Fabella and Cassey Lee

The book discusses competition from different theoretical perspectives and examines the implications these viewpoints have for policy. The contributors assess competitiveness in domestic markets and the impact of foreign competition. They also review the experiences of a range of countries in developing competition policy and examine both the strengths and weaknesses of these policies.

Chapter 10: Competition Policy in Malaysia

Cassey Lee

Subjects: development studies, development economics, law and development, economics and finance, competition policy, development economics, public sector economics, law - academic, law and development


Cassey Lee INTRODUCTION Competition policy became important in Malaysia following the regulatory reforms that accompanied the government’s ambitious privatization programme. Sectoral regulation in the pre-privatization period involved mostly economic regulation and this was purely a matter of ‘self-regulation’ by the government. With privatization, new regulatory institutions and mechanisms have been established to regulate privatized entities. In the absence of a national competition policy or law, a sectoral approach to competition regulation was adopted. This approach to competition regulation has thus far been limited and ineffective. The lack of a formal, comprehensive and coherent approach to competition regulation also resulted in the government’s inability to deal with many competition-related issues that arise from its industrial policy and policy reforms in regulation and trade, as well as foreign direct investment (FDI). This chapter discusses the existing state of competition regulation in Malaysia and how it relates to some of the development problems of the country. The next section of this chapter provides the developmental and regulatory background for an evaluation of competition policy in Malaysia. This is followed by a discussion of policy reforms and competition-related problems in the country in the third section. A brief discussion of the impact of foreign competition on domestic development is provided in the fourth. The final section concludes. THE NATIONAL CONTEXT This section provides a discussion of the basic characteristics of the Malaysian economy as well as the developmental and regulatory context within which competition and competition policy in Malaysia ought to be evaluated....

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