The Role of Competition Policy as a Tool
for Securing Foreign Investment
EU – Japan Investment Symposium
2001
Stewart White
Tuesday 11 December, 2001
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Vodafone Group Services Limited
Stewart White
Group Public Policy Director
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Vodafone Invests in Japan
• Invested over US$11 billion in Japan
• Single biggest direct foreign investor in Japanese history
• Japan is now single biggest of Vodafone’s international operations
• Invested on the basis of the Japanese Government’s commitment to
far-reaching economic reform
• Already developing dialogue between Japanese Government and
industry on important competition and regulatory reform issues
• Extensive experience in 30 markets worldwide
Success for Japan is success for Vodafone
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Current Issues - Japan
• Flow of Japanese investment abroad is still over three times higher
than direct foreign investment in Japan
• Cumulative direct investment still remains at less than 1% of GDP.
This compares with 12% for the U.S. and close to 30% for the U.K.
and at a similar level to many developing economies
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What needs to change to attract foreign
capital and improve this situation?
• Effective competition law regime
- gives investors the confidence that they will be able to compete
and earn the returns they need to justify the risk involved in
investing in the Japanese market
• Competitive telecommunications market
- provides the essential infrastructure for Japanese business and
will be critical to Japan’s competitiveness in the global
information economy and delivering what the Japanese
Government has identified in the E-Japan initiative
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Effective Competitive Regime
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Effective Competitive Regime
• Ensures economic efficiency
- Drives economic efficiency, effective allocation of resources and
ultimately economic growth thus benefiting all participants,
including investors
• Prevents anti-competitive conduct
- Prevents businesses from resorting to anti-competitive activities
that increase their profits at the expense of consumers and
efficient operation of the market mechanism
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Effective Competitive Regime
Who benefits?
• Consumers
- lower prices, more product choice and better service
• Businesses
- cheaper inputs, better service from input suppliers, greater
choice of suppliers and access to improved technologies
• Government
- increased revenue from expanding economy, lower expenditure and
improvements in government services
• Economy
- lower inflation, increased growth, improved international
competitiveness, greater investment, more employment opportunities
and improved standards of living
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Effective Competitive Regime
Key Elements
• Effective economic governance
• Effective legislation
• Effective regulation of de-regulated monopoly sectors
• Independence
• Enforcement
• Proper administrative law
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Competitive Telecommunications
Markets
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Competitive Telecommunications Markets
Key Issues
• Regulate dominance of the incumbent
• Avoid over-regulation of competitors
• Avoid micro-management of the market
• Ensure transparency, accountability, predictability and
independence of the regulatory process
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Conclusion
• Level playing ground for all
• Urgency of the need for reform
• Support economic reform proposals
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