All about Protectionism!

Protectionism is hogging the paparazzi around the world. Every other country is trying to keep away the wolf of recession by resorting to what seems to be the panacea of all economic ills and sins! Countries are secretly indulging into it and at their hypocritical best slinging mud on each other for committing the most heinous crime of free trade regime. 

Protectionism is an economic policy pursued by the countries in certain conditions wherein they shut down the doors for foreign goods and services and try to nurture their own by providing succor in various forms like subsidies for production and export, practising liberalisation, removing export tariffs and like. Various instruments in the hands of countries practising it are: Tariffs, Anti-Dumping Legislation, Export Subsidies, Import quotas, Administrative Barriers, Direct Subsidies, Exchange Rate manipulations. Sounding too many economic jargon? well .. it's got to be as the theme of writeup says but i will keep restraining myself from spilling over too many such nasty words!

Now, what I wish to draw your attention to is the last instrument: Exchange Rate manipulations. It is being talked about in the name of 'Currency Wars', the jargon first mouthed by the Brazilian President. It's actually the quest of countries to keep their currencies UNDERVALUED. Now you might think how humble and meek of them to do so! But hang on, in international trade, as much as in many other things in life, ALL THAT GLITTERS IS NOT GOLD! Keeping the currency undervalued means one dollar can buy more of their currency and hence their exports are cheaper in the international markets and hence are more sought after by the consumers. [Aren't humbleness and meekness virtue?] So,countries which rely on exports heavily for their economic growth [like China] are doing all to keep their currency the most genteel of them all. Well, consumers (developing or developed countries') want products. Last thing they bother about is the country of their make[unless obviously there's is someone like our own Bapu goading them to relinquish any things attached with a foreign name]. But, it does hurt the developed countries to have mammoth trade deficits with developing countries, both on economic grounds and self esteem and not to mention that it makes them insecure about their fragile dominance in rapidly changing world. 

Some countries especially China have these aggressive export policies that keep on promoting their export at not so nominal costs in domestic economy. In China there's raging inflation and the government is hard pressed to take corrective actions, but still the Renminbi remains meek. China has been accused of practising unfair monetary policies and distorting the international trade by many countries including the US, India. Such policies force other countries (Brazil, Argentina for their agricultural exports) to follow suit in order to protect their exports and hence jobs at home, economic growth from being crippled. I wonder China's eternal dream seems to be making every human on the planet a consumer of Chinese goods. At once, the flashes of me searching souvenirs in Perth come up when I found EVERY SINGLE ARTICLE China made! (God! was I mucking around in Beijing?). Same was true for all other shops I happened to visit there. 

Having said all that, it needs to be admitted that Protectionism ain't bad completely. It is very much needed for a fledgling economy to stand on it's feet and compete with the grown ups around. Every country including the US [the hallowed pilgrimage of Capitalism and Free Trade] have practised it at some point in the past and obviously now. Protectionism is the only solution to:

• Protect Jobs (and save the country from total collapse) in the time of Recession
• For Public Good (as in case of WTO approved protectionist measures for developing countries)
• For letting economy become Self reliant

India practised Protectionism after Independence to allow the non-existent Indian industries to have a solid base so that country is not heavily banked on imports and indigenous industries can hope to compete with the best in the world in coming future; like it finally was allowed to do in 1991. So, in a way Protectionism was the first step towards Globalisation. How ironical! The US did it in pre-Regan era and is doing now. In the trying times of recession every country needs to offer some level of protection to indigenious industries to keep them from crumbling down. It's their right!

But, we also do know that doing what's best for oneself doesn't necessarily lead to the commons good. (remember the Commons Dilemma?) Hence, the trick lies in reining in the Protectionist tendencies a little to allow for those actions which ensure that the world economy also does weather the crisis because the fate of each country's economy is intertwined with that of the world's. G20 summit recently tried to bring the developed and developing on a common ground but couldn't succeed. The developed countries need to show leadership  and take the developing economies with them in coming up with a common monetary policy which not only supports the growth of single entity but more importantly ensures the deliverance of the world economy as well.

cheers
TBS

A message from Tunisia

Recently, the power of the people and particularly the youth accomplished one of the most awaited goal of the Arab world by overthrowing the autocratic, corrupt and seemingly unassailable regime of Mr. Ben Ali. It is a reminder of the fact that the government is for the people not the other way round and when government fails to perform its duty, it needs to go.

Democracy has hitherto being an elusive thing for the Arab world as most of the nations are still ruled by autocratic regimes; rulers too cold to venture out of their kingly palaces to work for the people, too tenacious of their power and to say the least are subservient to the interests of the erstwhile colonizing countries or the West. There is large scale poverty, unemployment and lack of basic amenities. Lack of democratic system has ensured that the corrupt system remains entrenched to the core and the general plight of the people continues to deteriorate. This story is shockingly true for countries like Egypt, Algeria, Yemen, Algeria, Libya. Even as this is being written, people in many of these countries are getting inspired to encore the events of Tunisia in their lands. There is incoming news of youth in Yemen shouting for abdication of power by the autocracy hogging the galleries of power for 30 years.

Tunisian revolution was the outcome of smoldering discontent of the public. Right from the self immolation of the educated unemployed Tunisian youth things moved quite fast and spun out of the control of the government. It was really shameful for the country that an educated youth, instead of channeling his capabilities for nation building, had to kill himself in desperation. It betrayed the kind of mess Tunisia was into. 

A particularly interesting facet was the role played by the social networking sites like Twitter, Facebook, YouTube. the people could sustain the momentum of the movement and mobilize themselves. they efficiently used the new technology of internet to usher in the modern ideals of democracy to their land. It also rings in the fact that the internet in general and social networking revolution in particular has bestowed immense power in the hands of public to organize themselves, and effect the changes they wish.

But, given the overthrow of the rule accomplished, the Tunisians have a momentous and arduous task of setting in place a democratic system on which they can rest their hopes for a bright future. They need to prove before the world that the momentum is still very much there and it's continuously directed towards nation building. It is imperative in order to save their country from falling into the hands of another corrupt rule without democratic set up and dangers of civil wars. The Tunisians should take a lesson from the Indian struggle of independence particularly events post independence when the Indians showed grit to enforce the ideals of constitution throughout the territory of India, reigning in wayward princely states and establishing democracy on firm ground. Indian government, on the other hand, should express its solidarity with them as has been our national tradition throughout the national struggle to support any quest for democracy, independence.

In the whole episode the international community had, to an utter dismay, very less to vouch for. No country raised a strident support for the cry of ailing Tunisian junta. US, particularly, could have voiced a support for them and gained much confidence from the future Arab leaders: THE ARAB YOUTH. It would have helped bridging the gap between the US and the Muslim world as the current feeling of revolution is rife across the middle-east. Instead it chose to remain silent praying that the puppet rule of the West remains intact.

Better start now than never, the international fraternity, particularly the US, EU and other developing countries should support the Tunisian people in their endeavor. The UN should ensure that a transparent system is properly placed in the country to set it on the path of progress. International pressure should be mounted on the other autocratic regimes to mend their ways lest they meet the same fate. After all, when were they most vulnerable to change than now?

Finally, it can be said that Tunisia has shown the path for the rest of the Arab fraternity towards new modern political order, an order which is needed for meeting the challenges of the new century and improving their quality of life. Not just in prayers, the Arab brothers this time need to look west towards Tunisia for solutions and inspiration.

cheers
TBS

The bystander begins!

So here are the first words the bystander writes....realizing that this activity (blogging) has already become and stopped being the buzz word of town (i realized this while struggling to assign a name for my creation here as most of the names coming to a novice blogger's mind were already taken!).

Wishing to make it a short crisp beginning i look forward to air my imagination in this space and also to ventilate the joy, apprehensions, sorrow, frenzy, terror, hope and like emotions all around me which i happen to capture with my deft eyes...as that's what a bystander does the best isn't it?

cheers
TBS