Competition policy: The Georgian postal service market - საერთაშორისო გამჭვირვალობა - საქართველო
GEO

Competition policy: The Georgian postal service market

10 March, 2015

In order to evaluate the effectiveness of Georgia’s competition policy Transparency International (TI) Georgia periodically examines large business sectors, where restriction on competition could lead to serious damage to the economy. This report studies the postal service market.

This report reviews the state of the Georgian postal service market after interference from state bodies and points out specific instances of undue restriction of free and fair competition. The results of studying the postal carriers’ market indicate a possible case of state capture1, where representatives of the state company Georgian Post influenced decisions made by government officials responsible for economic policy. The decisions included creation of administrative and legal market entry barriers that ultimately discriminated against a group of companies, and resulted in Georgian Post holding a privileged position.

Such cases of possible corruption may seriously hinder the country's economic development. In cases like these, state institutions make decisions based not on public interest, but in favor of a small interest group. One of the necessary conditions for preventing this type of corruption is the existence of an effective competition policy and an effective competition agency. The agency must be equipped with adequate resources and powers to ensure openness and transparency of the market, protect the principle of equal rights of economic agents, and provide effective government supervision of the competition environment. These actions will ensure that government interference does not create legal monopolies and does not unduly restrict competition.

 

The report was prepared with the financial support of the Swedish International Development Cooperation Agency (Sida). The views expressed in the report to not necessarily coincide with those of Sida and Transparency International Georgia is solely responsible for the report's content.

 

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