Wednesday, June 6, 2018

Seeman, the king of faulty economic policies

I happened to come across a post by Mr Maridhas who is a writer / teacher.

For those who do not understand Tamil, this post is about the faulty logic in Mr Seeman, leader of NTK party in Tamilnadu, who has made some wild promises in his political manifesto. Maridhas does a great job in ripping apart the manifesto to pieces. Pardon me for any translation mistakes that creep in...

Myth: Seeman proposes an economy that is self-dependent 

This is not true and is something that can be proposed only by someone who does not understand how economics works.

What is self-dependent economy?

A country should be able to make everything that it needs within its own geo-political boundaries. It will not be dependent on another country for any of its economic purposes. Only such a system can be called a self-dependent economy. This is a common aspiration for many nations but not something new.

What is our country's current economic state?

India is self-sufficient in terms of food grains production and also exports to other countries. We are doing well enough to be in the top three food exporting countries across the world. So, what are the things we are dependent for on other countries? Simply said, we need to look at what we import from other countries. If we can produce them within India, we can become self-dependent economy.

This seems very logical. But what Seeman is proposing as self-dependent economy is not addressing this basis at all. Instead, it is a romanticised version just inducing people's emotions, talking about things like jaggery, pickles, neem, etc. Just matching rhyme to rhythm does not yield the results!

What are we really importing as a country?

Then Mr Maridhas goes on to argue the following in his video:

(1) ISRO has been instrumental in launching over 100 satellites of Arab countries recently into the space. Why should the Arab countries come to India? Simply because they do not have the technology for it and we do. India charges a fixed amount for that service. So, as far as Satellite launching, Arab countries are dependent on India. And India in turn is dependent on those countries for Crude oil simply because we do not produce enough within our country. This is how one country is dependent on another for a certain resource. 

(2) Though being self-dependent economy is an idealistic goal for each country, we should constantly need to look at improving our manufacturing / producing power. If we do not have certain resources at all in our country, we have to look at others. But whatever we can make here, we should look at doing it effectively than importing. That is what will lead us towards being self-dependent in economy. 

This is what EVERY country in the world, big or small, does it. India also does the same already!

    (a) More than 70% of crude oil for India is being imported. Because we are not allowed to take more than 30% of our needs from our own natural resources. Can we move away from it? Yes, if we start going with electrical vehicles. Till then, it is impossible to not rely on crude oil imports.

    (b) Around 33% of our imports is transport equipments - land, water and air transport machinery requirements! Our own ship manufacturing. Road transport is primarily dependent on imports from Germany and other European countries. Can we get out of this? Sure, we have to have the technology and resources to manufacture in India itself first.

    (c) Coal is about 20% of our imports.

    (d) Electronics is about 10% of our total imports. Our internal electronics needs of about 58% is from these imports! Can we make these within our 

    (e) Industrial equipments and machinery is mainly from imports, including the power looms & stitching machines in major cotton dress manufacturers from Tirupur and Erode. Same is the case of paper industries in Sivakasi and Leather machines in Ambur. Most of our industrial machinery is only being imported.

(3) Almost 90% of medical equipments are being imported from USA, Europe and Japan. This is simply because we do not make them here.

(4) From small toys to mobiles to most other plastic items, we are importing from China.

(5) Copper and Aluminium resources are not being dug up much in our country as we are simply importing them. If we dig them up, these same people will cry hoarse about environment issues!

Are we dependent much on other countries for food? 

Obviously, No!! So, anybody who wishes to address the self-dependency of economy should address the imports first! Can we make these within our country itself? We can definitely work towards that. But not with the policies Seeman puts forth. 

One has to focus on the Engineering sector, especially since we have about 8 in 10 Engineers who can be employed in the sector. Our education sector also has to be reformed first. Majority of our country's imports are in this sector, but Seeman is proposing something ridiculous in agricultural sector. Totally irrelevant!

Instead of talking about ridiculous stuff like selling neem sticks, juices and soup to boost economy, Seeman should really look at what the country is first dependent on if he wants to make the country self-dependent. Does he even know what the demand-supply ratio for these items is?

What should we really do as voters?

Maridhas urges viewers to vote for any political party of their idealogical choice, but depending on how sound their economic policies are. Because, however idealogically strong or appealing a political party may be, if they mess up on economy, it will be disastrous for the state and country as a whole. 

Maridhas says he is willing to challenge Seeman on these items in any debate anywhere and any time. 

The gauntlet is thrown - will NTK party have the guts to pick it up for a fight? I doubt that ..

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