This year’s winners of the Nobel Prize for economics were rewarded for their work in explaining how and why economies grow – and just as importantly – keep on growing. They talk about the importance of institutions – rules on how people should behave on specific economic issues. Say, like respecting property rights or the sanctity of contracts, etc. The point of it all is folks won’t invest and work their tail off if they aren’t certain they’ll be able to collect – and enjoy – their just desserts!!
But these fellas did also work in a slew of other areas and what stands out is their detailed historical knowledge of how specific economies actually grew. And one fact stands out – there’s never been an economy that has developed without protecting their new industries as they began to be formed. There’s even a name for the practice – “infant industry protection”. Think England, then America and Japan – followed by the Far Eastern Tigers of Taiwan, Korea etc – and now China. They all had protectionist rules that worked to protect their infant industry from unfettered competition for foreign firms – which invariably had longer experience and deeper pockets.
Nowadays we hear that such rules will violate the WTO trading regime – but in real life, the big countries regularly work around that regime – and even violate it openly – when their local firms are threatened. Most do this by imposing high tariffs on foreign goods so they become uncompetitive with similar local products. At this point of our economic development, sadly, there aren’t many goods we’re producing that need protection. But the Government’s pushing our manufacturing capabilities which should take off once the gas-to-shore facility is in place. We should be ready with this protectionist approach to the coming challenge however.
But there’s one troubling situation that’s already developed where one local sector’s existence is being threatened – and of which your Eyewitness has already commented: supermarkets!! The Chinese are flooding our country with supermarkets in almost every ward, village and hamlet – and wiping out the local “groceries” that served these communities for centuries in some instance. Right now some Agricola locals are up in arms against a Chinese supermarket that’s about to be launched.
Now one may say these Chinese supermarkets (and hardware stores) are much better stocked and with lower prices, so in the end, ordinary Guyanese benefit. But as the protesting businesses have pointed out, the profits generated by the Chinese businesses are all repatriated back to China and none in the local communities – unlike with them!! The Government has said that blocking the Chinese might violate WTO rules.
However, a decade ago, for the same reasons articulated above, India banned large chains from entering its retail market.
Without retaliation!
…virtue??
Believe it or not, the dominant view of those who’re supposed to dispense justice to we, the people is that there ain’t no morality in the law!! Justice is blind!! And so we shouldn’t get too outraged at some of the actions that pass muster nowadays. Take the case of those Carbon Credits we were allocated a while back. As somebody put it, it’s tantamount to paying us to not smoke so those nasty, developed countries can keep on puffing!!
Now our virtuous behaviour shouldn’t have anything to do with their sinning, should it?? The bottom line is if smoking’s a bad thing for the people around us, no one should be allowed to smoke!! It’s immoral for those with money to literally get away with murder. But since the law allows it, Guyana would be foolish not to go along and at least benefit our poor citizens who’re mired in poverty??
While some goody-two-shoes say that we must stand for principles – we gotta be pragmatic, baby!!
…work ethics?
From time immemorial, it was literally beaten into us that we only should enjoy that which we worked for. So the thought of just doling out oil money to folks just for staying home – is difficult to digest .
When will they also work??
