Saturday, December 17, 2005

Bureaucratic Barriers and Bribes in Developing Countries Cause Poverty Too

Tim Harford writes: ‘Yes we have no bananas. We just can’t ship them’, in the New York Times, 17 December. His article contains some facts that need the widest dissemination to all those concerned about the poverty of poor people in developing countries, which has nothing to do with the protectionist agriculture regimes of Europe and the USA.

Harford cites the problem of getting exports from a developing country to their borders and onto a ship to a developed county’s markets (should the developed country allow them in tariff free!):

If our picker wants to sell his bananas abroad he first has to get them onto a ship bound for America or Europe. That takes 116 days, and an incredible 38 signatures - each one an opportunity for some official to collect a bribe. Something is rotten here, and not just the bananas.

Sub-Saharan African exporters face, on average, delays of nearly 50 days for each shipment. They must get roughly 20 signatures on eight or nine separate customs forms.”

This is a common problem with trade from poor countries, made worse by having to go through similar bureaucratic problems when exporting to a neighbouring poor country that is saddled, typically, with bribe-prone officialdom.

India's commerce minister, Kamal Nath, has called for rich countries to "eliminate export subsidies as fast as possible." And so they should, but Mr. Nath might take note that an Indian exporter needs to collect 22 signatures on 10 documents - that puts India in the bottom 20 countries in the world for letting its own entrepreneurs trade across borders. Celso Amorim, Brazil's foreign minister, has condemned farming subsidies as "the most harmful single piece of commerce." The subsidies are indeed repugnant, but Brazilian exporters need 39 days to get their produce onto a ship, too long for some agricultural goods.”

Read the full article at Private Sector Development Blog: “a market approach to development thinking”:


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