Protectionism is Crucial Even in the Face of Liberalization.
I flipped through one of the local dailies about a week and half ago and one heading caught my eyes. It hinted to the fact that some of the fish on our tables could be the ones shipped into the country from Chinese farms. The writer reported of merchants who simply repackage the fish openly which is then sold in Gikomba and other parts of this flourishing city.
My fears seemed to be true regarding some fish I took awhile back that made me contemplate waving a forever bye to the delicacy I loved enjoying once in a while. While discussing about my near sedentary lifestyle in terms of the food I take with a friend, I hinted to her of my intentions to stop eating fish all together. She gave me that look that someone gives you while wondering about the underworld you might have surfaced from. But she was quick to offer some advice. She dared me try some fresh tilapia or mbuta from Lake Victoria, a challenge I will undertake once I change my mind and one which might not be forthcoming as soon as she could wish.
By the way she comes from the lakeside city and their home, as she told me is a stone throw away from the lake. And interestingly enough, over 80% of people I meet with the heavy Briton language accent from the lakeside settlement tell me that their homes are near the lake. I am yet to go there and ascertain just as Obama and Jakom are relatives to them. That aside, this beautiful nyako, a dazzling damsel concluded her sentiments by alluding of a possibility that I might have taken a Chinese fish on that occasion. She knows their distinct tastes. In fact this newspaper article almost ascertained her fears and must have been written about me or so I thought.
The Chinese fish that found its way to Kenya must have been as a result of trade agreements between China and Kenya. One thing is sure though, it was never about trade balances. Besides that, the aspect of liberalization or deregulation makes it possible for goods from other countries to find their way into another country. It is allowed and that is why we have the World Trade Organization (WTO) to ensure there is reduced restrictions by individual countries to bar international trade.
In technical terms, liberalization means reduction of the applied restrictions imposed by governments on international trade and capital. Deregulation, a term I used in the preceding paragraph means removal of state regulations for both domestic and international trade.
We should however agree that at some point the government subjects regulations to businesses in liberalized markets to secure consumers or other local businesses at risk of death from international business competition. A reason I suppose pushed President Uhuru Kenyatta to put restrictions on imported Chinese fish into the country some time last year. It is a move I am wondering if it ever took proper effect with such claims seen in the local dailies. Therefore, I am pushed to side with a majority of other scholars who cumulatively agree that fair and free are never ideal terms to describe markets.
That leaves me with one thing to agree on, that liberalization drives the world today. As a matter of fact, it is liberalization that opened up the international trade to a level it grew on an average rate of 6% for about 50 years consecutively since 1948. Today, foreign exchange markets achieve epic daily turnovers in excess of trillions of dollars. It is from these exchanges that governments are getting money to run their operations as well as create wealth for their people. It is this liberalization that propelled globalization of the world economy. So from my heading, does it mean I am conflicting myself? Am I anti-liberalization?
Nay, when I talk of protectionism, I am talking of it in a selective term basis. For example, the idea of allowing massive imports of the Chinese fish was going to cripple the fishing industry in the country. Our fishing industry is not very well developed as a matter of fact. History serves us right with the death of our textile industries. Had we worked to sustainably control textile imports in the face of rising globalization, perhaps the local industry could be a bit better than what it is today.
Protectionism deals with policies put in place to protect domestic businesses from foreign competition by applying such measures and restrictions as tariffs and import quotas. The idea here is to make the imports a bit expensive compared to local products hence turning them competitive over the international multinationals. That is what government levy tariffs do. Import quotas on the other hand limits the amount of imports into the country leaving consumers with no choice but consume their own.
Does the sugar from Brazil make tea tastier than our own local brands? Is the Chinese fish better than our fresh catch from Lake Victoria, Naivasha and the like? The greatest problem lies in the government officials colluding with business people to abuse the import quotas by importing more than was needed and hence flooding the markets which in turn kills local businesses faster than anything else. This is what corruption can result to on a national scale.
To achieve that, another recommendation is about reducing the cost of operations especially utilities in our country to make the prices of local products more attractive than imports. The USA has been at loggerheads with china over these protectionism and I am following up to see how it works out on the long term. Perhaps when well developed in the coming years, we can ease these regulations and develop health trade balances across continents.
For now we can see the most necessary sectors that need protectionism and implement regulation policies in those sectors to help develop them locally to a level they will be strong enough to face the rest of the world in equal measure. At that level, we can then deregulate them and develop a health competition which might as well lead local businesses to open themselves up to global trade in equal measure. Once we achieve that, the benefits will be massive.
Copyright @ 2109