One of the reasons why developing countries are failing to progress is the fact that the bright students who come to the countries like Australia to receive an education, fail to return home to give their home country the benefit of their education. Instead they remain here because they decide it is a much better place to live and our greedy government wants to keep their new found talents here. Unless we send them home again, this situation will continue.

David

The analogy used, that of a developing nation is like a child, is to suggest the developing world is too immature to carry on the business of “nation running” and should be re-colonized by the developed world.

“Tilting the playing field is not just a matter of fairness. It is about helping the developing countries grow faster. Because faster growth in developing countries means more trade and investment opportunities, it is also in the self-interest of the rich countries.”

I recall Bob Hawke’s speech on a level playing field. Being ofr smaller government and an anti-protectionist, it was one of the few speeches of hawke’s that I could agreed with.

Suggesting the playing field be tilted now is as stupid a suggestion as I have ever heard and will do nothing to help developing countries. Indeed, the inevitable result will be of one nation matching tariffs and quotas with another and the negative impact on the consumers of both developed and developing nations will produce a world recession, which whilst impoverishing the developed world will devastate the developing.

The thing that the developing world needs more that anything is education, particularly of young girls, as this is the only non-violent way to reduce the rise in their population. If this is not done, and the third world population doubles to 8 billion over the next 25 years, there will be no hope for the world. The first world population has stabilised, and we must do the same for the rest of the world, otherwise the environmental effects such as global warming will be catastrophic.

To see the success of these policies, you only have to look at countries that have managed to control their population such as Japan (in the late 1940's), and China, with its one child policy. These countries demonstrated that you have to control population first, and increased living standard comes after.

Of course this policy would be violently opposed in many third world countries, particularly muslim ones, who hope to conquer the world by population pressure. This opposition may require sanctions (countries not agreeing to educate their girls would lose all trade, investment and tourism), and could even require military intervention.

It never ceases to amaze me that people become concerned about topics such as pollution and global warming, without realising that they are but symptoms of the wider problem, overpopulation, and that if you don't fix the overpopulation, all other efforts will be in vain.

If we don't fix the overpopulation problem, it will be done by the four horsemen of the apocalypse, namely WAR, FAMINE, PESTILENCE, and DEATH.

As the author suggests, the “infant industries” argument has a long and fairly non-controversial role in economic theory.

The problem has been that, in practice, the protected infants seldom grow up to be strong and competitive adults.

Behind protectionist tariff walls industries have no incentive to innovate, to reduce costs and improve efficiency, or provide customers with the goods and services they most want.

India’s recent economic history provides a very good example of the dangers of protectionism. Its heavily regulated and protected manufacturing industries sustained only modest growth producing expensive and sub-standard products until its governments started a program of economic reforms in 1991, since when its growth has accelerated markedly.

http://imf.org/external/pubs/ft/wp/2004/wp0428.pdf

To extend the analogy, the solution may be to place the protected infant on a very strict and transparent weaning program, permitting high levels of protection initially but phasing them down over a number of years – rather as Australia has done with its once highly protected motor vehicle and textile clothing and footwear sectors.

However, this requires courage and nerve on the part of governments that inevitably face huge pressure from protected industries and those that benefit from their protection (such as labour unions) to sustain protectionism.

As India’s experience suggests, after an initial shock the “cold shower” effects of more rapid deregulation can actually lead to better economic growth in a relatively short period.

An excellent and well argued article. I was interested in this rebuttal argument by Rhian;
"Behind protectionist tariff walls industries have no incentive to innovate, to reduce costs and improve efficiency, or provide customers with the goods and services they most want."
Surely this would only be true if a domestic monopoly existed; i.e. why is domestic competition be naturally inferior to international competition?
And even in a domestic monopoly... I remember when Telecom had regional depots, and repairs would be carried out in the middle of a Saturday night.
Now, thanks to a more 'rational', 'competitive' environment, if my phone line in QLD plays up, I have to wait until an unspecified no. of other complaints occur before it's viable to send a crew up from Victoria.
That's progress?
In the sixties, we proved conclusively that if we kept paying the Japanese to manufacture our goods, they inevitably got richer, while we got poorer.
It's pretty simple, really. If you take money out of your pocket to give to someone else, they end up with your money.
wow.
When we import goods from other countries, we are employing workers in other countries.
those workers pay taxes in other countries.
Those other countries get rich.
Duh.

The employers in the other countries get rich, but don't kid yourself that too much of it gets to the workers.

It is taking even the Chinese a while to catch up and look at the cost in terms of pollution.

David