This is the account of a week spent teaching antitrust law in a World Bank sponsored program for the Tanzanian Fair Competition Commission and members of their High Court. Before I leave, my seven year old daughter asks “why do you want to go to Africa?” So do some friends and clients. Most of what we hear about Africa is awful. Extraordinary violence, famine, tribal war, Aids, contagion, and more. My purpose is not to explain why a lawyer from Cleveland would head off on the 4th of July for sub-Saharan Africa, but what I found there. I hope the Tanzanians found our time informative; I learned a lot.
The flight to Tanzania is an epic one. It originates in Amsterdam and flies direct to the base of Mount Kilimanjaro. On the way it flies over some of the world’s most hostile and failed states: Libya, the Sudan, a corner of Ethiopia, and Kenya (yes, Kenya – once a bright spot in east Africa now rated a failed state for rampant corruption and violence). At Kilimanjaro, almost all of the “western” passengers deplane in their safari clothes to see the Serengeti, Norongoro Crater, and Africa’s highest mountain. I stay on for next stop: Dar es Salaam (in Arabic “House of Peace”) – Tanzania’s largest city and commercial center and known to many Americans simply for the 1998 bombing of the U.S. Embassy.
For the first time in ten hours, I peak the interest of my neighbor. “Why are you going to Dar?” He is a European but a resident of Dar, who runs a mine for a North American mining firm. He tells me that life in Dar for “expats” is more expensive than London or New York. He warns me about the prevalence of malaria on the east coast of Africa; he has had malaria three times. He also warns me about bandits in the area where I will stay. Then in hushed tones he says that “this place is getting more lawless. I don’t know how long until it collapses.” This strikes a dissonant ring – Tanzania has a comparative reputation for stability. And how could this place be that expensive? On final approach just before ten o’clock on Saturday night, July 4, I looked down and the city below of three million or more is unimaginably dark.
We are staying at a hotel on the Indian Ocean. The website touts “all the splendor of a Sultan’s Palace overlooking the pristine white sands….” Sounds promising. The hotel is a typical Tanzanian business story. The Government once owned it, and it reportedly fell into gross disrepair. It was sold to an Indian guy who put some money into fixing it up. There is now a large staff of Africans working under the watch of Indians.
I turn on the shower and it sputters black water that coats the tub in a thick black paste. Oh well, no angry calls to the front desk. We don’t sweat the small stuff in Africa: I will stay clean by swimming in the Indian Ocean. The hotel does have clean sheets and – mercifully to reduce the real risk of malaria – mosquito netting shrouding the bed. The Tanzanians with the Fair Competition Commission (“FCC”) all seem happy to be there.
And the ocean is right there. Old wooden boats with a single white sail stained light brown head out of the inlet by the hotel and out to sea. Large groups of Africans wade offshore under the beating sun pulling giant nets through the water. Hordes of black ravens circle the hotel, caw cawing, giving the place a slightly sinister air. The scene could be from hundreds of years ago.
At lunch, a buffet of African and Indian food, I meet Jorge an economics professor from Peru who led off the teaching for our group the week before. He is also a long distance runner and the day I arrive he goes for a run down the beach. As he passes an abandoned commercial fishing boat rotting on the beach, two locals jump out of the hull brandishing long curved blade knives. They rob him of his jogging shoes. He seems fairly calm about it, but then again he survived twenty years of the Shining Path in Peru. However, after that, he spends most of his time in his room apparently waiting until it is time to head to the airport for the long trip home.
I am intent on not losing my shoes – in part because I only brought one pair – or suffering worse. I run wind sprints in bare feet back in forth on the beach immediately in front of the hotel. (The squash courts advertised can’t be found.) Down the beach, I can see the abandoned boat and at least two guys watching me. After a while watching each other, we have what we would call in antitrust law a “tacit understanding.” We obviously never speak but both know that if I stay in front of the hotel, they are not going to attack. If I go up the beach past the far northern edge of the hotel, they are coming after me.
On my second day, I walk out to the beach in my swim suit still wearing my shoes. The Tanzanian bar tender hastily follows me.
“Karibu” (welcome in Swahili) he says. “Those are very nice shoes.”
“Assante” (thank you in Swahili) I say. “I like your shoes too.”
“Where are you going?” he asks.
“Swimming,” I say.
“Where?” he asks.
“Right here, in front of the hotel,” I say.
“Good,” he says. “Those are very nice shoes.”
Later, as I get to know the Tanzanians with the FCC, I make light of my situation assuming that they knew what happened to Jorge. They did not. They are embarrassed by it. I feel badly I mentioned it. Soon, I am shadowed by two hotel employees on my swims. But, down the beach, I can still see those guys moving around the hull of the abandoned fishing boat.
The “Decision Makers”
The Tanzanians divide themselves into two groups: the “Decision Makers” and the “Technocrats.” Their titles; not ours. I am in the Annan Room with the Decision Makers. This is a small group comprising the Director of Compliance (chief officer in charge of enforcement), the five members of their Fair Competition Commission (they will decide the cases), the High Court Justice (she will decide the appeals), and the Chief Clerk for the High Court.
This is a marvelous opportunity. They are just starting on a road that for the United States began in 1890. We will spend a week discussing the major issues of antitrust law but with the guidance of how a lot of brilliant judges and scholars have opined on the issues over time. It’s a bit like the day dream of going back in time but with the benefit of knowing everything that later transpired. The experience is also inspiring because of Tanzania’s past rejections of capitalism and free markets. During the 60s, President Julius Nyerere embraced “Pan-African Socialism,” aligned the country with Communist China, nationalized industry and farms, and moved the people from subsistence farming into collective farming and industry. Nyerere is still revered, but as an economic plan – as with everywhere else – it did not work.
The Director General stands and gives the history of their efforts to establish laws protecting free competition, and then introduces Meestuh Edmoond from the United States. I stand up with my hair slicked back with ocean water in a $200 Joseph Banks wrinkle resistant suit (proves to be a great suit for profoundly abusive travel). “Assante” I say. “That will conclude the Swahili portion of our course; if you have any trouble understanding my Cleveland dialect of English, please let me know.” A few smiles.
I head into the types of hard core horizontal agreements to restrain competition (e.g. price fixing, bid rigging, agreements to allocate markets or customers) that in the U.S.A. are treated as criminal offenses. Should a violation require an express agreement? Can’t a tacit agreement (where one seller raises prices with an unspoken understanding that the other competitors will also raise prices) do as much or more harm than an actual cartel? What are the arguments against pursuing anticompetitive behavior where there is no proof of an express agreement? And so on. I am careful not to dictate the answer. I introduce the issue, compare how the U.S. and other jurisdictions such as Europe have decided the issue, and then look at their provisions in the Tanzanian Fair Competition Act of 2003 (“the Act”).
A major American management consulting firm drafted the Act. It is indicative of stereotypes about big consulting firms. Reading it, you can imagine an enthusiastic group of really smart twenty-six year olds with no particular experience in the area joined by an ex-lawyer or two also with no particular background in antitrust law congregating in a conference room and banging it out on laptops while drinking Red Bull. It represents a lot of work, some innovative approaches, but a number of major holes and a few places where it is dead wrong. In my best effort at the Socratic method, I hone in on the problem spots.
“Are you saying that our Act is wrong?” the Chairman, asks. “Our Parliament passed this Act.” The Chairman is an impressive looking man of about sixty with a booming voice (think a more athletic looking version of James Earl Jones) and advanced degrees in economics from the University of Wisconsin.
I choose my words carefully. “It is up to Tanzania to decide whether to amend the Act, and for you to decide cases under the Act. I raise the considerations.” The Chairman nods in agreement. We go on.
At ten-thirty two, the Director of Compliance, interrupts me. “Meestuh Edmoond, point of order, we stop for tea every day at ten-thirty.”
And so we do. Watching them talk in groups, I am impressed by the diversity of the group and how they mingle freely. This is not a situation where giant orange haired Hottentots are glaring across the room at the pygmies. One of the members of the Commission, a retired Army Colonel who served in the war against Uganda, explains the situation. Unlike other African countries, notably and horrifically Rwanda, Tanzania has some 120 different tribes. No tribe has major control. Julius Nyerere worked further to break down tribal identities. For instance, the Government sent the Colonel, who looks Ethiopian, to the opposite side of the country to attend a state run boarding school. There, he met and married a woman of another tribe. “My grandchildren cannot even tell you what tribe they are,” the Colonel says happily.
And the symbol of Tanzania shows a dark haired man and a light haired woman holding together a shield. As a father of three daughters, I am glad that this is no phallocracy. The high court justice is an Arab looking woman and one of the Commissioners is a female law professor at the University in Dar.
I enjoy the tea.
(Next: Antitrust Lessons in Africa - Part II Competing against “the Technocrats”)