COMPLETING THE
TRANSITION TO A
COMPETITIVE DOMESTIC
ECONOMY
OECD Economic Survey of the Czech Republic 2014
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
2
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
3
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
4
Despite progress, there are still barriers
to entrepreneurship
5
Czech Republic has the highest number
of regulated professions in the EU
6
Corruption is another entry barrier
7
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 stateowned enterprises and activities
8
The competition authority initiates relatively few
cases and often in public tender bid rigging
9
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
10
Network prices are relatively high: in the
mobile phone area as well as in….
OECD 100 calls mobile basket¹, in USD, November 2013
11
High pre-tax industry electricity prices compensate
households (unlike DNK and NLD) and are compensated
by the public purse
12
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
13
• Thank you
• Děkuji
14