Protectionism done well, is progressive!

28 May, 2017 - 00:05 0 Views
Protectionism done well, is progressive! Sunday Mail

The Sunday Mail

Chris Chenga Open Economy
It helps to nurture industries that may sustain society’s employment needs and traditional extractives are becoming more capital intensive and less labour intensive.

There isn’t that much fundamentally wrong with protectionism; ideologically or structurally!  Lately, though, so-called “economic progressivism” may have you thinking otherwise.  If you once found credence to protectionism and at some point it made sense to you, you may be finding yourself under some intellectual uncertainty, maybe even morally questionable if you felt an innate attraction towards it.

Hold onto your initial resolve!

Let us perceive things this way; the notion of socio-political representation inherently places protectionism as the intellectual guidance and policy forefront of nationalist economic structuring.

Why else have nation states often prescribed the virtue of electoral expression if not to prioritise the interests of those promised socio-political representations under nationalism?

This applies much so, to an extent, where the interests of the represented electorate should take intentional precedence over the interests of others with “nullius juris” to that same socio-political representation.

When more accurately perceived in this way, to question protectionism then is to question the representative right pledged by nationalism itself! It is important to retain awareness of this fact as over time, critics of protectionism have found deceptive credence by containing their arguments against protectionism kept within a false context of “economic progressivism”.

Not only is this argumentative behaviour inaccurate in context, it is also intellectually and morally patronising.  So, in instances where a nation such as Zimbabwe discusses economic policy such as Statutory Instrument 64, the context of perception should be one which critiques whether or not the instrument prioritises the interests of Zimbabweans.

And yes, to an extent, that intentionally places precedence over those without claim to socio-political representation within our borders.  That in itself does not make protectionism retrogressive, or any sentiment of malevolence.

Unfortunately, we are often vulnerable and unsure of this. We seem to worry about pursuing nationalist policy and economic structuring.

The intellectual and moral onslaught from false economic progressivism only adds to our uncertainty and lack of self-assurance as Zimbabweans rightfully warranted to pursue nationalist policy and structuring.

This will likely recur at the passing of local procurement laws that are being structured at this moment.

Perhaps what is retrogressive is unfettered, unregulated, legislative overriding globalisation that diminishes the sanctity of representative protection that comes with nationalism!

For instance, what is retrogressive is the lack of parity of universal carbon emission legislation.

As countries such as India and China argue, it is inequitable for their own interests to draw parity to fossil fuel emission benchmarks with other developed countries that have benefited from carbon dependent industrialisation.

This is legislative protectionism. For their nationalist perception, global legislative benchmarks do not suit their own citizens’ interests, at least not to a point of suffice compensation.

Taken in context, that is not an unreasonable stance to take.

In terms of competitive protectionism such as SI 64, many developing countries that have struggled to diversify their economies from extractive dependency, Zimbabwe included, cannot compete in terms of economies of scale and the impressionable marketing that make trade partnerships difficult to sustain.

Hence, while superficially perceived as retrogressive, for the purposes of their socio-economic development, it becomes necessary over economic cycles to engage in varied measures of protectionism.

There is a competitive and developmental learning curve that warrants countries such as our own a number of cycles where we should pursue protectionism.  It helps to nurture industries that may sustain society’s employment needs and traditional extractives are becoming more capital intensive and less labour intensive.

It is not just an employment welfare issue.  More global and regional trade agreements such as AGOA easily cross borders to have an effect where signatory parties expose their neighbours to not only imported goods and services such as various meats, but also imported is the supply chain cost structure of those imports.

In the many instances that developing countries cannot keep up with such value chain competitiveness, their own supply chains disintegrate.

Moreover, there are downstream effects such as a loss of inflationary or deflationary control by sovereign country central banks.

This leads to a further loss of fiscal targeting in terms of collected tax revenues, which is the cause of developing countries failing to relieve themselves off debt.

Quite often, it is the false economic progressivism that is culpable of undermining the political ramifications of decayed or societal trust in local governments.

Unfettered, unregulated and legislatively overriding globalisation often sacrifices local socio-economic developmental demands to appease global elites.

Indeed, most protectionist measures have become synonymous with “populism”.

But if protectionism is to be branded as mere populism, how then is populism distinguished from the popular will of the national electorate?

It has become increasingly difficult for sovereign states to act in the best interest of their citizens under the pressure of false progressivism.

For instance, Chinese policy-makers’ emphasis on consumer-led structural transformation has led to downgraded credit ratings for the last two years.

However, as being proven by China, nation states can still sustain necessary growth despite the pressure of such progressivism.

As well illustrated by UBS chief economist Paul Donovan’s dismissive tone towards superficial credit ratings, and the biased agents who conduct them, “one of the credit rating agencies — no one cares which one — lowered China’s credit rating from something to something else — no one cares what — and there was only a flicker of interest from markets”.

Such has become the victory of China’s own nationalist policy and structural execution to have superseded external conventional norms of progressivism.

Closer to home, it seems South Africa’s policy direction had become subject to the notions of rating agency scores.  Indeed, one should not diminish the importance of a good credit standing to attract much-needed and welcome investment.

However, to what extent is the investment and the ratings that influence it relevant, if they come at a contrast to the ideological or popular socio-economic transformation imperatives it ideally would be used to realise?

The emphasis is not to portray protectionism as intentional reclusiveness from best global practices and mutually-beneficial global interaction and in instance integration.

Protectionism only becomes retrogressive when respective governance lacks tact and diplomacy in its implementation, especially at points where counterparts perceive there to be zero sum gains.

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