It’s In Our Hands
Tim Harford writes in the New York Times:
The Group of 20, composed of developing countries like Argentina, Brazil, China and India, has been pushing hardest of all for an end to rich countries’ agricultural subsidies and tariffs. Paradoxically, some of the most vocal members of the group impose regulatory barriers that are just as crippling to exporters in their own countries. India’s commerce minister, Kamal Nath, has called for rich countries to “eliminate export subsidies as fast as possible.” And so they should, but Mr. Nath might take note that an Indian exporter needs to collect 22 signatures on 10 documents - that puts India in the bottom 20 countries in the world for letting its own entrepreneurs trade across borders.
Precisely. As James Glassman writes in Tech Central Station:
What will actually help people in developing countries the most is for their governments to cut their own barriers to trade, no matter what the rich countries do. [Emphasis in original.]
That is not to say, of course, that the USA and Europe aren’t monstrously wrong in keeping their agricultural subsidies in place. But our salvation lies in our own actions.
Amit,
When India drops its barriers in spite of the US/EU, what according to you might happen in the next few years in India ?
Comment by Kya yaar tu bhi — December 17, 2005 @ 9:12 pm
KYTB, Glassman’s piece summarises that well enough.
Why? Are you saying it won’t help us to remove our barriers to trade? Explain.
Comment by Amit Varma — December 17, 2005 @ 11:37 pm
Suppose the Commerce ministry cuts the number of documents exporters has to obtain to,say,5 it will atleast help us protect the environment!
Comment by Bas Kya Yaar — December 18, 2005 @ 12:32 am
The issue raised is not import vs export wrt a particular country
but the effieciency of being able to export with less hassle
In india there is a strong consensus which cuts accross all parties which wants to keep things as they are for many reasons.
A good deal of beuraucrats want their prestige if not illicit financial gains to continue.
A lot of busineess(almost all large congolomerates) in india want the status to be as is.
Why you may ask?
Simply put they have gained a lot in the past and keep doing so b/c they have figured out how to navigate the system. They dont want competition.
This is the real reason the cap on being able to lay off more than 100 people is not lifted despite BJP’s flirtation in the past to do so. Its the large congomolerates that have figured out how to keep their unions in check, navigate the licenses and permits, and are reaping the reward in the current system. The newcomers have odds which are highly against them(ever wonder why indians of all educational achievements who move to US manage to start successful businesses and the same ones are not able to pull that off back in india). Its in their interest to keep things as they are. B/c otherwise their ‘investments’ are exposed to further competition.
Comment by Guru Gulab Khatri — December 18, 2005 @ 3:12 am