Open economies?

Contrary to ground realities, Bhutan has done better on the business front if the ‘Ease of Doing Business’ report published by World Bank last week is any indication. The country’s rank moved up from 148 to 141 this year out of 189 countries.

This is definitely a good indication as it exhibits the country’s seriousness over curtailing red-tape or bureaucratic rigmarole on the business front.World business. 3D image. The isolated illustration

Unquestionably, Bhutan has made major economic leapfrog in recent times. Bhutan launched its Economic Development Policy along with a revised and a liberal Foreign Direct Investment policy few years back. Such arrangements have been made, envisioning that it would benefit the country in its economic transition.

Debates have also been rife whether Bhutan should accede to the World Trade Organization (WTO), although, top government leaderships share more skepticism at present than optimism for long terms gains.

These will definitely be new challenges and tough decisions we have to confront. The government is aware nothing comes free. Pursuing ruthless economic activities can weaken the balance we have strived to preserve all this time. And this presents a mammoth task as we try to tackle economic growth on one side and the preservation of environment, culture and traditions on the other.

However, at the same time, we should not forget that we are living in a highly interdependent globalizing world. Global economic integration is increasingly viewed as an economic and political necessity rather than a matter of choice.

WTO is too distant. But nevertheless, we are pursuing an increasing role in regional economic and political integration. Some bilateral trade agreements are being reviewed and some new ones are being opened. We are also striving to reap gains from SAARC, BIMSTEC and SAFTA.

As regional economies are getting integrated, how well can we remain unaffected? As we become signatory to a regional trade agreement, we must offer the same preferential treatment to all member states. If we remove protectionist trade barriers for one member state, we become obliged to provide the same treatment to other member states as well. As a member of SAFTA we will be obliged to render the same treatment to Afghanistan as a member state, and as a member of BIMSTEC, similarly, we have to offer the same kind of treatment to Thailand too.

All parameters of globalization are morphing along with changing times. National boundaries are becoming irrelevant. Events happening in one place are shaping outcomes in another. The perfect examples are the inflation and fuel hike in India and its spiral impact here.

One key principle of economics is that trade benefits all parties involved in it. No matter how hard we try, the fact is we are possibly opening up to be open economies. And shouldn’t we be?

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