* This is my article in thelobbyist.biz, October 12, 2011.
It covers only the morning session of Day 1. Today, the conference has unofficially ended, we are still going to the farewell reception in an hour, for the formal closing of the activity. This is an excellent conference, thanks to FNF.
Kuala Lumpur — Competition is the best regulator of business and market players, not government. The more players who compete with each other in producing similar goods and services, the more that they will be forced to provide good quality products at competitive and more affordable prices.
Day 1 of the conference yesterday was composed of the opening speeches by FNF Regional Director for Southeast and East Asia, Dr. Rainer Adam, then the head of ASLI, Dr. Michael Yeoh, and the keynote speech of DBM Secretary and top Liberal Party official, Sec. Butch Abad.
The three men expounded the advantages of competition over more government regulations, and the importance of transparency and accountability over secrecy and high bureaucracy. But Sec. Abad, being a high government official in the Philippines, gave more importance to certain government regulations to attain redistribution in society, to protect the marginalized sectors.
The free market system admittedly, will retain if not heighten inequality in society. But this is the natural result since some people are very efficient and very hard working and highly ambitious, while some have little or no ambition in life, who only want to party and drink each day whenever possible. When government intervenes hard to force or pretend to attain social equality, such intervention will naturally result in subsidizing the lazy and irresponsible, while penalizing and over-taxing the efficient and industrious guys.
Anyway, after the opening speeches, the morning session was very interesting. Five speakers from five different countries spoke on just one topic: “What Should be the Role of Government?” The speakers were (a) Prof. Jurgen Morlok, the Chairman of the Board of Trustees of FNF; (b) Battsetseg Shagdar from EBI think tank, Mongolia; (c) Dr. Arianto Patunru from LPEM, Indonesia; (d) Prof. Sheng Hong of Unirule Institute, China, and (e) Barun Mitra of Liberty Institute, India.
My assignment in participating in this EFN Asia Conference was to be a host or moderator in two discussions, including this one. I was lucky to take that role as I thought that ALL the five speakers mentioned really made excellent presentations yesterday.
Jurgen Morlok talked about promulgating the rule of law as the main function of government; to set the rules of the game, to be a referee of competing players, no more, no less. I think this is a bulls-eye statement which I totally agree with.
Baagi Shagdar talked about the pathways of Mongolian society from authoritarianism to democracy the pains and hurdles along the road, and the need for more citizen information and participation in governance.
Aco Patunru opened his presentation with important quotes from (a) Murray Rothbard (government should ensure that rules are equally applied to players, leave the market as competition will regulate the market itself); (b) Ronald Coase (government role is limited to enforce property rights); and (c)Friedrich Hayek (government should ensure that competition goes on, set the rules and regulations for competition to prosper).
Sheng Hong discussed the recent Unirule research paper, “The Nature Performance and the Reform of State-Owned Enterprises (SOEs) in China. There are many surprising results, well at least for me, from that study. Like SOEs’ average profit from 2001-2009 was 8.1 percent vs. private enterprises’ 12.9 percent. But SOEs enjoy certain privileges that are not available to private companies, like low interest rate, low or zero rental fee, fiscal subsi and royalties. If these perks are removed, the average return on equity of SOEs from 2001-2009 goes down to -6.3 percent, a net loss.
Barun Mitra opened his presentation with a quote from Ayn Rand, “Civilization is the progress towards a society of privacy…” Then he discussed how India benefited from liberalization and competition in various sectors: automobile and land transporation, airline, telecommunication, etc., and the declining role and authority of public sector units (PSUs).
FNF has this good discussion set up that maximizes audience interaction with all speakers which I have not seen in any big forum in Manila. After the presentation by the five speakers in the ballroom, there was no Q&A. Instead, participants were divided into five separate meeting rooms, and the five speakers will be moving into those five rooms to answer questions for 15 minutes. Since I personally know three of the five speakers (Barun since 2004, Aco since 2005, Baagi since 2008), as well as some of the participants, it was relatively easy for me to facilitate the small group Q&A.
If there were no instant questions from the audience as soon as the speaker has entered the room, I have to ask the first question; if the speaker has already left after consuming the 15-18 (max) minutes allotted and the next speaker has not come yet, I asked the participants to continue the exchanges among themselves, to ensure there are no dull or idle moments. These were learning moments for me too as discussion host.
Today’s session will feature the official release of The Economic Freedom of the World (EFW) Report 2011, an annual study done by the Fraser Institute in Canada, then a talk from the Office of the Prime Minister of Malaysia, then a panel discussion on Competition Policy and Environment, a luncheon talk.
I am thankful to the FNF for giving me a travel grant to attend this conference, for giving me the opportunity to be one of the discussion hosts in two activities yesterday (morning and afternoon).
Competition is not a goal in itself. It is a means to a goal – to expand economic freedom and individual liberty. Even if the 2nd day of the conference is still not over (I wrote and submitted this article before breakfast), I can positively say that the conference is really educational and highly successful.