The stalled income convergence and the economy’s high reliance on international trade point to a need for a more balanced and stable income convergence process. This requires the development of a strong domestic economy, implying a substantial expansion of one of the smallest private service sectors in the OECD. This would constitute a growth driver as well as an improvement in international competitiveness as more competitively priced services are intermediate inputs in manufacturing production and contribute to stimulating innovation processes and product diversification. Promoting a competitive private service sector relies on the effective implementation of competition policy. Over the past couple of decades, many impediments to entrepreneurship have been dismantled and the foundations of a competitive market based economy established. The competition authority and its tools are close to best practice, but still have to uncover any domestic hard core cartels, pointing to a need for a review of its resources and some of its key tools, such as the leniency programme. Many of the network sectors remain dominated by vertically integrated state-owned incumbents, requiring additional measures to restrict public sector interference and securing non-discriminatory access to networks.