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Submitted by Anonymous on
I really enjoy Mr Canuto's articles but I'm afraid I don't fully agree with him this time. Let me start first with what I do agree: diversification is critical to the sustainability of any economy and yes, it is always better to try and fail than to fail to try. What I am not comfortable with is the assumption that simply by facilitating trade, the private sector will, all of a sudden and magically, start producing a wide variety of high quality products and services. It is naive to think that simply because we make some improvements at the borders, or in physical infrastructure (which, make no mistake, is very important indeed) new companies will flourish. If anything, it will improve the competitiveness of companies that are already exporting, but will do very little for SMEs which are the main engine of any economy. The private sector still needs more important things such as access to capital, technical expertise, educated workforce, and more importantly the ability and guidance to produce products and services that are different. Saying that trade facilitation will increase diversification is like saying that low interest rates will make people buy more houses. It is just an small incentive that needs to be complemented by many others.