The scene -- the last page of any Asterix comic. A grand celebratory banquet under the stars, an idyllic scene from a Gaul village. In the corner, gagged, bound and forbidden to sing is Cacofonix the bard, because he sings so out of tune. That's how I felt this week, (not least because my singing voice makes Cacofonix sound like Lata Mangeshkar).
The round table is headed by Arun Asterix Jaitley (the commerce minister) and the other members of the village (members of the Confederation of Indian Industry (CII), a lobbying NGO -- is there any other kind?).
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If the unabashedly obsequious CII-Cancun press release is to be believed, the Indian delegation were heroes to the poor and the unwashed children of Marx. The Indians believe that their leadership to the downtrodden has helped usher in a new democratic world order.
The respected Financial Times went a step further -- it claimed that Cancun fell because three or four poor African countries complained about cotton.
Since there is little evidence that the meek are anybody's chosen children, I go along with the CII-Jaitley victory dance -- it was us, baby, that wrought failure. We showed them how to win a marathon by axing our own feet.
Trade talks used to be about how to make the world better off by integration -- these days, politically correct NGOs (e.g. Oxfam and the World Bank) set the agenda, talk motherhood, and squash any progress for the genuinely poor.
At Cancun, the objective was to bash up the bad imperialists; that they happened to be rich and white was proof that the cause was just. What are these bad imperialists continuing to do?
Jointly, the Europeans, Americans and Japanese are protecting their agriculture -- some are doing it through tariffs and non-tariff barriers (keeping imports out) while others are doing it through subsidies (encouraging exports).
Now agriculture is an area which since time immemorial, and possibly till time immemorial, will be controlled by governments, especially since with globalisation, they have an ever decreasing area for control.
All things considered, and especially from the vantage point of the genuinely poor (and the poor gagged Cacofonix), food subsidies are good, because it means that the poor can buy their meagre sustenance cheaply.
Now the folks at Oxfam and the World Bank believe that we should preserve the traditional lifestyles of the really poor; these consume food outside the international marketplace so blaming the West for producing rich man's food cheaply (e.g. wheat, milk, meat) and stating that this hurts the world's poor is disingenuous, at best.
So who would have benefited if the politicians of India, Brazil and China had not emerged empty handed and victorious? The poorest of the poor in Africa who import food, because net-net, food would have been cheaper after a Cancun accord.
Estimates by NGOs themselves suggest that up to three-fourths of the benefits from relaxation of agricultural tariffs accrue to developing countries.
So the story is not really about the bad westerners -- it is about the bad leaders in the poor countries. If the rich nations are to reform agriculture, that is just gravy for the poor. The expensive food in developing countries today is often due to their own (mis)baking. And India, as usual, leads the way in distortions.
Our agricultural tariffs are the highest in the poor world -- our industrial tariffs are the highest in the world, poor or rich. By "winning" at Cancun, CII-Jaitley have ensured that food for the poor Indian continues to remain more expensive, and that rich inefficient industrialists continue to be protected.
The Third World would have actually benefited if CII and Jaitley had lost. So what is Jaitley smoking that convinces him that he acted in the 'name of the poor'? Why an expensive cigar because by losing the war for the poor, he made sure that he won the battle for the inefficient rich.
Did he do it for the rich farmers of India? Possibly. Did he do it to get some support among the common cause Leftists, NGOs, and the economically Neanderthal Swadeshi Jagran Manch? Possibly. But the votes in this corner are small, and by all accounts, rapidly diminishing.
There is more, much more, than just political support. What really brought Cancun down was not agriculture, but food of a higher order. The developing countries, led by Brazil, China and India, were opposed to the introduction of the "Singapore issues". The most important of these is the opening up of the huge market for government procurement.
Why should anyone be opposed to transparency in government? Indeed, the global cheerleaders for governance are precisely the cheerleaders of the poor -- NGOs. They should have been at the forefront of the battle to bring Singapore in, and not fought, as they did, to keep transparency out.
So why did they do it? The simplest explanation always works. With globalisation, one has to now earn money the old fashioned way -- by working. Who benefits if WTO gets delayed and disgraced, and tariffs are kept high?
Rent seeking family firms whose feudal style of business is collapsing. What keeps the old order going? Business as usual in government procurement. This is where the biggest of the big bucks are. Non-transparency is Corruption, Big Time.
If governments are not forced to open their books, where will they get money to run elections? Or in the case of China, keeping the red party permanently in the black?
How and why does corruption occur? Economists have many models, but there are few with the compelling logic of the following simple explanation. Corruption cannot arise with competition. Discretion is the grease that oils the palm. Discretion cannot be profitable if a sweetheart deal is made impossible.
With globalisation, there are many firms to produce the same cellphone, many farmers to produce the same grain. So where are the returns to discretion? Not in Big Business, because no matter how Big you are, there is always somebody small to bring you down to size. But in the steamy corridors of Big Government, there are oily possibilities.
In order to do good for the people, governments tax. There are many who argue that increased public investment is necessary for development. But if such public investment is made transparent, who loses?
The bureaucracy, the politicians, the wannabe monopoly industrialists aided and abetted by the Left intellectuals. (There is an acronym there, BLIP, signifying the increasingly temporary nature of this nexus).
These are precisely the same people who fought so successfully to keep transparency out at Cancun -- and profits in. Governments of poor countries won at Cancun -- the people lost. That is the true non-democratic meaning of "no deal is better than a bad deal."
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