ISLAMABAD, Dec 18: The Competition Commission launched in place of the disbanded Monopoly Control Authority is proving a non-starter for want of money.

Informed sources told Dawn on Tuesday that the federal government has not only failed to provide the promised “seed money” but is also reluctant to allow the Commission to generate its own resources.

As a result, the high profile Competition Commission exists, but is dysfunctional. It was formally set up on November 2, 2007.

And in the process, the capacity-building of the Commission was also delaying for which the World Bank has initially agreed to offer $6 million.

Sources said that the ministry of finance has not approved the salary structure of new members of the Commission which was causing frustration among them.

When approached, the chairman of the Commission, Mr Khalid Mirza, confirmed that he needed seed money to run the new authority. At the same time, he said, he wanted the government to decide about the type of funding to be generated through the operations of the authority.

He said a law had been made, but no funding was given to him to run the organisation to ensure prudent business practices and at the same time discouraging illegal cartels. “I want clarity about my assignment,” Mr Mirza said.

He was asked whether the vested interest, which was against the formation of the Competition Commission, was behind the delay in the formal functioning of the authority. “I don’t know. I really don’t know when the issues will be resolved,” he replied. Mr Mirza said perhaps the bureaucratic process was taking time to finalise the matter.

Responding to a question, he said he needed to have seed money, like other organisations. The chairman of the Commission said that the National Commission for Human Development (NCHD) and Small and Medium Enterprise Development Authority (SMEDA) were provided Rs1 billion and Rs2 billion respectively as a seed money.

The government, he said, had also given Rs50 million to Security and Exchange Commission of Pakistan (SECP) in 1997 as a seed money.

“And at least the government should give me Rs100 million to run the organization,” Mr Mirza added.

Answering a question, he said that World Bank planned to offer $6 million in two phases ($3 million each) to undertake the capacity building of the commission.

To another question, he said he had proposed removal of directors of companies found guilty of illegal trade practices from the board of directors.

Informed sources said the World Bank had once again asked the government to make the commission full functional by providing the required support.

The bank wanted strict laws to ensure prudent business practices in Pakistan. It believed that as competition law is a law of general application, coordination, formalised or otherwise, is needed to ensure effective application of responsibilities of the competition agency and other regulators in Pakistan.

Sources said that World Bank had asked Pakistan to deepen and expand reforms to new and more complex areas.

The Bank wanted the government to implement a competition policy aimed at having a strong competition culture throughout the economy, equal opportunities for all viable entities to participate in the economy, entrepreneurship and thereby developing a fertile ground for innovation, skill development and product diversification.

The bank also believed that a wide range of efforts were needed to remove unnecessary barriers to entry, created either by badly designed regulations and policies or by anti-competitive business policies by private firms.

Fostering effective competition through an effective competitive policy is supportive of a business environment which improves efficiencies, leads to allocation of resources in the best manner and in which abuse of market power is prevented through competition.

At the same, time, the bank maintained that implementation of explicit competition policy will need to avoid procedures that might pose unnecessary transaction or compliance cost on firms.

An effective competition policy framework involves a multifaced set of initiatives, all of which are new to Pakistan, the bank said.

Sources said the World Bank wanted Pakistan to promote sustainable economic development and improve the well-being of all citizens by protecting and promoting competition in the economy.

It said that the private and public barriers to competition needed to be prevented from hindering the development path to guarantee maximisation of consumer and producer welfare in a dynamic framework.

It said competition policy and its regulatory framework will support an environment in which entry and growth is fostered, anti competitive behaviour by all firms is prevented and abuse of market power by dominant firms is restrained.