What is state failure? See my conceptualisation of state failure on the right flank below.

Tuesday, July 3, 2007

And now in favour of trade liberalisation in Afghanistan?

MStFB update
Guess with whom I had the chance yesterday to have a few words on the potential effects of more trade liberalisation for Afghanistan? Well, with professor Paul Collier!
He came to the Central European University yesterday to give a short presentation on 'fragile states', as the member of a panel that also featured George Soros, chairman of the Open Society Institute (holder of several other titles as well), UK ex-Secretary of State for International Development Clare Short, and Lily Habash, an official from the Palestinian Authority (I'm sorry but I forgot Ms Habash's exact title; it's connected to governance reform coordination, though).
I'm not going to summarise here professor Collier's entire lecture on 'fragile states' (that term btw is, as Paul Collier himself pointed out, World Bank newspeak for the earlier 'difficult partnerships', and also for 'Low Income Countries Under Stress', or 'LICUS'). Instead of my summarising his lecture, it's much better if you just read his latest book, 'The Bottom Billion - Why the Poorest Countries are Failing and What Can Be Done About It', which I will read myself, too.

So I'll just cut to the point instead, to get to where his lecture connected with my post on trade liberalisation and Afghanistan, from the day before yesterday. Paul Collier talked about how an abundance or wealth of natural resources generally undermines governance everywhere, having a detrimental effect even on democracies (instead of, as some optimists would believe, democratic governance being perfectly capable of managing natural resources in a transparent, accountable way).
He made very important points regarding this question, as I'm sure I'll also find his book to be full of similarly good and interesting points. (Given his reputation, I think I really don't need to praise professor Collier here.) But I was all the more tempted to go up to him when the panel discussion was over, after he made a controversial remark regarding the above issue. He concluded that, in a way, as a result of the processes taking place within natural resource-rich countries' polity, we may say that the 'moral battleground' is not between resource-rich states and the importing states that are dependent on those resources, but within resource-rich states themselves.
Well, whatever one says about moral considerations in an analysis is bound to be controversial of course. From my part, I wouldn't say the moral battleground can be so clearly placed outside the relationship between the resource-rich and resource-users. If the current global trade regime, which reflects mostly the richer, more powerful states' interests, does have the tendency to lock countries (especially Least Developed Countries) into natural resource extraction, then resource-users cannot be entirely exempted from all responsibility regarding the problems of the resource-rich. So I thought it would be interesting to get professor Collier's views on Afghanistan's joining the WTO. Afghanistan is not that rich in natural resources, but so it actually might be all the more striking that it would have to rely, among some other things, on extracting what it has (e.g. natural gas, copper), for the sake of GDP growth and a sustainable trade balance.
It certainly was interesting to hear professor Collier's take. While in my previous post I was focusing on a bit of an abstraction, an imaginary Afghanistan in the long run, one beyond the current challenges of the insurgency, extreme poverty and the opium production, he used an argument focusing on current considerations by the Afghan governing elite. The essence of it is that trade will never really produce customs revenues for the Afghan government as long as there are powerful local players that can divert those, and instead such customs revenues might therefore serve as a rent for players that undermine governance in Afghanistan.
Like I said to professor Collier, I can certainly see the importance of that argument in the Afghan context.
Having thought of it, however, I'm thinking now that one of its premises is obviously that the only outcome Afghans might be aiming at is a centralised and democratic nation-state, something that can definitely be debated. And, perhaps more importantly, the choice of the right trade regime for Afghanistan would therefore be handled, according to this logic, as primarily a means serving the purpose of the centralisation of political power, which is looking at the issue from a rather narrow point of view (especially given how WTO-conform legislation covers all sorts of areas that are at times only indirectly related to trade). And it still leaves us with the questions for the long run that I have put forward in my previous post about what economic development path such a trade regime might have to offer to Afghanistan.
And yet another question: if there remain powerful local players, can't they just informally tax the flow of goods anyway? I'd really like to ask these questions from professor Collier. He is the sort of person you always kind of expect to have heard it all before, so perhaps he would have a dozen good answers ready to these questions. For the time being, I'm left thinking about them myself, too.

1 comment:

M Kasnyik said...

I love the way how people from World Bank talk about morals... everything seems so simple. Actually I pretty often lack some kind of a philophical reflexivity there.