I’ve been asked to comment on a brewing storm in a tea cup, the supposed opening of the gates to hordes of Indian IT workers. At this time, all that the government is considering is a Framework Agreement, or an agreement to work in a time-bound manner toward a technical and economic cooperation agreement. I was involved in the early stages of negotiation but have little knowledge of current state. Not having the time to engage with the issues in detail, I thought, I’d paste below the transcript of a talk I gave at the National Chamber of Commerce, along with the slideset. Addressing an audience of who I took to be diehard protectionist types from the world of commodities and goods, I had highlighted how much we had benefited from unilateral but incomplete (one still had to grovel before the BoI for most permissions) liberalization that allowed us to grow the telecom and IT & ITES sectors over the past two decades.
It takes guts to question protectionism, but I guess it’s not that difficult when you are in the Prime Minister’s Office: The Prime Minister’s Office is worried about the IT and Communication Ministry’s policy of encouraging domestic manufacturing. The PMO has sent the Ministry a note asking for comments on how the policy aims to link manufacturing requirements to national security. ‘MARKET DISTORTIONS’ “Efforts to link manufacturing with security is questionable. It will lead to distortions in the market. Security objectives can be met through audits, tests and need to be handled separately,” states the note sent by the PMO.
I lived in the US at the peak of the scare stories focused on Japan. I now live in Sri Lanka at the peak of scare stories focused on India. The following should be educative to the scare-mongers: Economic events and market trends are notoriously unpredictable. In the early 1980s, the Japanese high-technology assault on the American computer and semiconductor industry seemed scary. “What are our kids supposed to do?
Much of the work of LIRNEasia must be seen on the context of connectivity fueling growth. Connectivity does not mean simply electronic connectivity, but also the removal of barriers, including barriers to trade and investment. Using comments by Nobel Laureate Micheal Spence at Harvard Forum II last September as the anchor, Rohan talks about how best South Asia, and Sri Lanka in particular, can position itself to ride out the after effects of the Great Recession. Details of the event here. Click here to view presentation.