Friday, December 16, 2005

Tim Harford on economic development


In an appalling op-ed in today's New York Times, Tim Harford says even if the developed countries got rid of their agricultural subsidies, many poor countries may not be able to capitalize on that opportunity. Reason: unnecessary red tape, and internal controls.

Sub-Saharan African exporters face, on average, delays of nearly 50 days for each shipment. They must get roughly 20 signatures on eight or nine separate customs forms.

[...]

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. Celso Amorim, Brazil's foreign minister, has condemned farming subsidies as "the most harmful single piece of commerce." The subsidies are indeed repugnant, but Brazilian exporters need 39 days to get their produce onto a ship, too long for some agricultural goods.

While his points about internal controls are valid, his argument adds insult to injury. The subsidies are in place; without urging the developed nations to dismantle them, he is poking fun at the poor countries.

3 Comments:

  1. Yazad Jal said...

    I wonder why you find his argument appalling. He dos a good job in stating that simply removing agri subsidies is not enough. There are other obstacles too. I find it a measured piece. Note his conclusion:We should wish the trade ministers well in their negotiations, because agricultural protectionism hurts consumers in the developed world as well as farmers in the poorest countries. But governments of poor countries must do far more to help their own citizens by reforming the Byzantine obstacles that stand in their way. One day rich countries may finally allow poor farmers to sell them beef, sugar or rice. It would be a disaster if their own governments prevented those poor farmers from taking full advantage of that opportunity.

    Where, pray, is he "poking fun at poor countries"?

  2. Abi said...

    Tim Harford has one good argument when he says poor countries benefit by getting rid of internal controls, and I have no problems with this argument.

    However, tying this argument to another one on agricultural subsidies in rich countries is absurd (and insulting), because subsidies continue to exist. It's like giving a long, hard lecture to a person with some debilitating illness (about, for example, the benefits of physical exercise), while watching some bully run away with the medicine.

    Harford gives a magical situation wherein subsidies vanish but controls remain, and argues that exports would still suffer. Poor countries' argument would be to reverse the situation: controls vanish, but subsidies remain. Would agri exports flourish? [I admit that many other things would flourish, but what about agri exports, which is where WTO was stuck when Harford's piece appeared?]

    As for where Harford is poking fun, I will leave it to you to figure it out.

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