Archive for the ‘India’ Category
There’s a lot of discussion around success of Indian diaspora outside of India. Previously, there were a few examples used to demonstrate that but with the arrival of more clear and concise statistics it’s obvious that Indians abroad are winning. They are ahead in education as well as in average income in the developed countries – wherever they migrated.
However the reason of this success was less discussed and so is its’ implication in India itself. I see Indians outperform immigrants from Bangladesh and Pakistan by a large margin. However when we consider the education index – I see all these countries are quite close, so is their HDI as per UN report. So, what’s going on?
First, let’s see the differences. There are a couple of things in place here. There is a gap between the performance of the country and the performance of diaspora. The gap can be explained by the channels used for immigration. Let me explain with an example. Let’s assume a class has a couple of sections. Let’s say there’s a Math competition between the two. Now representatives of section A is chosen by an exam conducted by the class teacher. The representatives of the section B were picked up randomly. Now, even if the sections show equivalent results in Annual Math exams, in the said Math competition section A will have an advantage. This is because they are using meritocratic channels to choose their representatives, rather than from a random sampling.
There are a couple of major channels used in immigration – the first one is via education and jobs, the second one is via family reunion and marriage. The former one is much more meritocratic channels than the latter. On the other hand, the latter is more “random” than the former. There’s a third non-meritocratic channel in case of USA (Diversity Visa) and that is purely random channel.
My first hypothesis is, the more meritocratic channels are used in a country-to-country migration, more the difference between home country and the diaspora. The theory is simple – people coming in to the foreign land with a work-visa will tend to earn more and will do better in education than one coming through family ties and marriage. Let me call this hypothesis selection bias.
The second hypothesis is more proportion of people comes in as immigrants – the more random the channels become. The simple example of section A and B can be used to explain this one. The section A has 20 students and section B has 100 students. If we choose top 10 from section A and top 10 from section B, we are providing a proportion bias to section B. If the student performance is distributed by a Gaussian curve (assuming meritocracy inside each section) then section B students will have an advantage if we look at their average scores – even if the average of whole class might be the same. Let me call this one proportion bias.
Let’s look at a couple of pictures.
Now the USA residency distribution.
So, a couple of observation -
1) Indians get a selection bias advantage in both in USA and UK. In UK, both Pakistan and Bangladesh have almost same selection bias. In USA, Pakistan has a better selection bias than Bangladesh.
2) Indians enjoy a vast proportion bias. India, Pakistan and Bangladesh population are in proportion of 8:1:1 but the number of immigrants in UK is close to 10:8:3. In USA the proportion is a bit better – 11:3:2.5.
Now coming back to the topic, Indians abroad do well because they use meritocratic channels and get a proportion bias. The use of meritocratic channels is prevalent among Indians because of the large presence of MNCs in India. Microsoft in UK or USA will be more comfortable to hire another employee working for the same company in India. However, the similar opportunity is non-existent in either of Pakistan or Bangladesh. So, the success of immigrants has almost nothing to do with the average performance of the home country (though India produces more % tertiary educated people than either of Pakistan or Bangladesh), but with the channels used in immigration.
The funny thing is, the perception of home country abroad is largely based on its diaspora and that creates a positive feedback loop. More Indians doing good abroad will imply more MNCs will hire from India and the loop will continue until the average is hit (which will take time given the population). So, at least for the time being, Indians will enjoy reputation abroad of being high-paid and educated class.
STEM – Science, Technology, Engineering and Mathematics.
I compiled a chart of Indian STEM students compared to total foreign-students in United States studying Masters and PhD. The numbers are for the year 2009.
Source – Department of Homeland Security, U.S. Immigration and Customs Enforcement, Student and Exchange as retrieved from this report.
In the wake of recession in Europe and downgrades by several rating agencies, Indian politicians and media are back to the drawing board to figure out what caused the debacle of last couple of years. Initially, it looked like a recession bypassing us and we are recession-proof. Later, the thought was that the effect would be temporary and probably caused by an international bubbles. Now, its more and more evident that recession has actually exposed Indian under-performance. A lot of the issues currently plaguing India is home-grown and the solutions can be achieved internally. But the media didn’t listen. Neither did the political leadership. So, with a new gun, they are targeting the trade deficit with China to be one of the main culprits. I can see politically things have started moving, both in terms of talks and actions.
Before I delve deeper into the issue, let me present the facts. The first point to note – Trade deficit between the neighbours widened to $40 billion last year. At $17.9 billion, India’s exports to China in 2011-12 were less than a third of the $57.55 billion worth of goods it imported from the country (source). The worrisome factor is – this has a trend. The trade gap is growing, even if we look at the post-recession trend alone. Overall, India is not in a good shape in terms of trade. The deficit is creating pressure on exchange rates and reserves. So, we get a culprit and it turns out to be our favorite – China.
Is it that easy? Probably not. Jyoti Rahman once explained how trade deficit with India might not be that bad for Bangladesh. In this case also, if I look deeper, I see the traces of hints from his writing. What caused this massive trade deficit and what keeps it growing – are the two prime questions I would try to answer at first. If one looks at this chart provided courtesy Wall Street Journal, you can easily identify the three major import items from China. They are (ranked) – Telecom equipment (e.g. ), Equipment for major projects (e.g. Power plant, Mining), Computer related accessories/parts (e.g. Computers, Hard Disks etc.). All these things are known as “Capital Goods”. In fact, overall Capital goods imports are estimated to have crossed $40 billion at present. They were $6.5 billion in 2003-04 (source). So, the growth in import from China is mainly coming from Capital Goods and not from toys (as people often complain).
Now that we have an answer that Capital Goods import from China is the major cause of Trade imbalance with China, we now question, is that a bad thing? To me, the answer is mixed but overall I am leaning towards the answer “No”. Let me explain why I am in favor of Capital Goods import from China.
Capital Goods import is considered to be a good sign for the economy in general. As explained in details in this article, a developing nation imports machinery (or other capital goods) and uses its cheap labor to make items worth of export. As the time proceeds, the country is able to produce more and more export-goods and eventually produce those capital goods close at home. This has happened in China too, as it is described in the figure below. In 1980s, it imported machinery from Japan and Germany to set up its factories where it produces garments/textile and consumer goods to be later exported to North America and Europe. After a while, Japanese and German companies invested in China to produce those machinery to compete rising labor cost close to home and China has eventually become a net exporter of Capital goods. At the same time, Japan and Germany moved to higher value added manufacturing industry (e.g. innovation, design) and China took their former place. Most of these capital goods tagged as “Made in China” are also designed in Japan/Taiwan/Germany.
On the other hand, if one looks at growth rates of Chinese items exported to the rest of the world, one can easily verify that Telecom equipment, Electrical machinery and Office machines are three fastest growing export (that testifies the theory) sectors as of 2004. (source) So, it’s a natural thing in the growth cycle of a developing country and it’s better to get it sooner than later. But isn’t that hurting the competitiveness of Indian companies who build Capital goods also? That’s absolutely true but probably not a big deal. Imagine the early 1990s, when Indians started importing computer and related accessories from rest of the Asia. If Indian Govt decided to curb those and promoted domestic computer manufacturing industries, would we have seen such exponential growth in services export? Probably not. One advantage that India had was that they had no domestic manufacturer of Computers and no jobs were threatened because of cheap Computer import (Leftist brigade might still argue otherwise). There is no dispute that the third highest item in the list of imports from China (Computer and accessories) actually adds value to Indian services industry. The imports related to power plants and telecom are targeted towards another domestic problem – infrastructure.
However, Indian political delegates are talking to China in order to get more market access and remove restrictions. While this is not a bad ploy but the success of such ploy will definitely be limited. India should also push for greater market access in the developed world (such as EU-India FTA), where most of Indian exports should end up. After all, India will continue to have a huge labor advantage against the First world, but probably not against China. If India can fix their perennial infrastructure problem and obtain better access to developed world market, investments will start flowing. More investments are used for more capital goods import and more export of consumer goods and increase in jobs – just as the classical development paradigm suggests. So, the trade deficit with China is not as bad thing as the press suggests and we should probably rethink our perceptions about our constraints.
Additional Reads -
1. This old paper from Jong-Wha Lee argues why Capital goods import is good for long-run growth.
2. This paper from Veeramani relates Capital goods import with labor-productivity.
3. This paper suggests – “access to cheaper capital good imports not only had a positive effect on labor productivity growth for the entire sample period, but has become increasingly important in recent years.”
4. This paper concludes – “we find that for the period from 1980 to 1997, after controlling for trade liberalization, other reforms, and fundamentals, stock market liberalization are associated with a significant increase in imports of capital goods. Both our evidence and the literature’s further suggest that this can be attributed to the consequences of financial integration which allow access to funds and lower the cost of capital in an economy.”
WSJ published an article in the similar tune.
“India’s cabinet last month approved a 21% tariff on imports of power generation equipment into India. … But this is a profoundly short-sighted approach to the trade issue, which ignores what should be the far bigger concern of Indian policy makers—not the trade deficit with China, but the country’s overall infrastructure deficit. India’s chronic shortfall of electricity (witness last month’s blackouts), roads, airports and the like is a major constraint on growth. Imports from China are part of a solution to this problem, not a problem in their own right.
The vast majority of imports from China consist of capital goods such as electrical machinery, nuclear reactors, boilers, ships, boats and items for civil engineering projects. Consumer goods such as toys, footwear and the like account for less than 2% of imports from China. These capital goods tend to come at a lower cost (thanks to the so-called China price), and are made cheaper still by extremely advantageous financing offered by Chinese banks.”
Now Swaminathan Aiyar has come to my support.
“Why have falling import barriers now produced prosperity? Because this encourages specialisation in areas where India is competitive, and discourages wasteful investment in uncompetitive areas.”
Archery has the best chances to fetch India a medal. In the three World Cup events this year, Indian Men bagged two silvers and the Women bagged a Silver and a Gold. The Men’s team is ranked no. 5 in the World, while the Women’s team is ranked second. Archer Deepika Kumari, who won the gold in one of the World Cup events, is highest ranked Archer right now. Even last year, Indians bagged several medals in World Cup events. It’s notable that only recurve Archery is included in Olympics.
Shooting is getting most media coverage this time, due to Bindra’s feat in last Olympics. It’s important to note that the only Indian to be ranked within top 10 in ISSF’s ranking list is Ronjan Sodhi (#10 in Double Trap), no other shooter is in Men’s or Women’s top ten list. However, the competition is intense and performance on the day matters more than consistency in case of shooting. For example, Bindra didn’t get a Gold in WC’s a year before or after he hit the top position in the Olympics 2008, even fellow Gagan Narang had higher ranking and more consistency than what he had. Same way, India did bag a gold and a bronze in 2010 ISSF World Cup despite not having anyone in the top ten ranking. So, we can cross our fingers and wait for the day.
India has a medal hope in Badminton too. Saina is currently ranked 5th and she was the winner of last 4 out of 7 tournaments played. Kashyap (ranked #21), the other contender, doesn’t have ranking to back him, but he reached semis in a couple of recent tournaments. Indian doubles pairs though don’t have any recent glory (last one goes back to 2011 World Championship).
Boxing is another medal hope. In last men’s world cup (2011), India bagged a solitary bronze (Vikas Yadav), as in the last Olympics. But a few others also came close. Devendro Singh, Manoj Kumar and Jai Bhagwan reached QF while Dinesh lost to the eventual Champion. In women’s section though, only Mary Kom has a chance although in the 2012 World Cup she lost in the QF. It’s notable the women’s boxing has only three categories in this Olympics.
What could have been a certain medal, now looks more uncertain in Tennis. The legendary partnership of Bhupathi-Paes is broken but a third rising star in form of Bopanna (ranked #13) can bring a medal for India partnering Bhupathi (ranked #15). In mixed doubles, in form Paes (ranked #5) is partnering Sania Mirza (ranked #18) – who recently had a lot of success with her mixed doubles partner Bhupathi. However chances in Men’s singles and Women’s doubles are slim. This time, matches will be played in Grass which is not the favorite turf for Indians as per the recent performances. There are a couple more factors – a lot of pairs appear in the Olympics who are not traditional doubles player – such as Roger Federar in Olympics 2008. They are a genuine threat to established doubles pairs.
India bagged a bronze in 2008 Olympics when Sushil Kumar had the bronze medal from wrestling. However, the chances of a medal from wrestling this time is not so bright. No Indians finished in top six in their individual categories in World Championship Wrestling 2011. However, in Women’s wrestling, Geeta narrowly lost in QF of 55kg category can can be considered as a medal hope. If you go a year back, Sushil won gold in the same tournament in 66kg category.
Even though a lot of media focus is on Indian hockey and they actually are playing well at times, I don’t expect them to have a podium finish. I will be very happy if Indian hockey team makes through Champions’ League, i.e. finishes within top six. They are currently ranked #10 and a finish within top 6 should be a realistic success story.
In many other events, Indians will just add the numbers and diversity. I don’t expect a medal from Weightlifting, Athletics, Table Tennis, Rowing or Judo. Among these, woman weightlifter Chanu finished 7th in World Cup but the gap between her and the bronze medalist was significant.
From 1984, India have never performed worse than its last outing. If they can maintain that trend, they should at least get a gold and some more medals. Given India’s population, it might appear that we are under-performing but I believe it has a regional effect. India’s neighbors are doing equally poorly as that of India. So, chances of a rapid recovery is slim, unless we build up some sports infrastructure at home.
I wrote the article on Bangladesh-Myanmar maritime arbitration while it was in progress. The verdict is out in March and because of busy schedules, I was not been able to put up a decent informative article to follow up on the same. However, since I’m writing a couple of months later, I’ll focus less on the verdict itself, but more on the implications and reactions.
When I wrote about this arbitration, I was in confidence that Bangladesh will get something better than what was on offer by Myanmar’s negotiation on EEZ. But at the same time, I thought Bangladesh would get favorable verdict in continental shelf as well. I was right on the first one, where Bangladesh got better than equidistant but to my surprise, the continental shelf was also split into half. On the territorial waters front, Bangladesh didn’t have a strong claim and they didn’t win it. So, overall it was a mixed verdict for Bangladesh though more of victory and less of defeat.
Image courtesy a news article -
Why is this a Bangladesh victory?
The decision on EEZ was the most crucial one since that’s where potential of economic recovery of gas and oil resources are. So any shift of maritime boundary should be seen as a big win. The territorial waters are important but only a small part of the dispute. The continental shelf area is far away from the mainlands and more important as a fishing resource than gas-blocks.
The allegations against this common idea are centered around the fact that no major gas blocks from Myanmar are changing hands. One blogger from Myanmar also used the same argument (picture – see the red line for verdict, another source) to explain the same his countrymen. Indian media was also happy to note that Indian stake at Myanmar blocks are intact. To answer this, I would say Myanmar didn’t allocate blocks aggressively to the disputed areas and kept some buffer space in case the verdict didn’t go for them. So an adjusted line was also out of their allocated blocks.
The second is more important one. A lot of people in Bangladesh argued that Bangladesh lost a proposed area as per their 1974 law named “The Territorial & Maritime Zones Act”. I mentioned it before also that 1974 law didn’t have any basis. It was declared unilaterally based on a floating baseline concept that never made into final UNCLOS in 1982. When the arbitration is fought on a law based in 1982, the local declaration of 1974 doesn’t add much of value. Unfortunately a string of misleading articles has been published in support of this view and I wrote against these claims long back. Bangladesh, understandably, did not argue anything on “floating baseline” in the arbitration and reduced their claim beforehand in order to get a favorable verdict. This strategic move definitely paid off. As I warned in the article before, the opposition will not be convinced of that approach so easily. That’s why most of these arguments are primarily motivated by political calculations.
A third team argued that the delimitation didn’t happen as per “equitable” rules, rather they happened on adjusted equidistant method. However, this allegation is attributed to lack of knowledge only. Equitable allocation often is synonymous with adjusting equidistant allocation with relevant circumstances. The only pitfall here is the adjustment didn’t happen to the extent Bangladesh wanted.
The extent of this victory
There are news sources quoting Bangladesh ministers (Dipu Moni) on getting more than what Bangladesh has asked for. This is not true. ITLOS verdict drew a line in Bay of Bengal to partition the rights of Bangladesh and Myanmar. However, the claims of Indian mainlands and archipelago will have its own claim and the area will be adjusted downwards. From the verdict (pg 141-143, para 499) we see
“The Tribunal notes that its adjusted delimitation line (see paragraphs 337-340) allocates approximately 111,631 square kilometres of the relevant area to Bangladesh”
However, it noted earlier that the relevant area was does not have anything to do with claims.
“The fact that a third party may claim the same maritime area does not prevent its inclusion in the relevant maritime area for purposes of the dis-proportionality test. This in no way affects the rights of third parties.”
And para 462 notes -
“The Tribunal therefore decides that the adjusted equidistance line delimiting both the exclusive economic zone and the continental shelf within 200 nm between the Parties as referred to in paragraphs 337-340 continues in the same direction beyond the 200 nm limit of Bangladesh until it reaches the area where the rights of third States may be affected.”
That means the claims made by the minister is exaggerated and based on wrong assumptions. I found one more scholarly article is quoting the same.
Interestingly, part of news media in Bangladesh assumed that Bangladesh has won as per 1974 claim and published articles/pictures based on those.
Avoiding the effect of St Martin Island on EEZ
While calculating EEZ, it seems that the effect of St Martin Island was not taken into consideration. This means India’s near-equidistant demarcation with Myanmar, Indonesia and Thailand makes sense. For the sea-boundary with those three countries, Indian claim was based on Andaman and Nicobar Islands. These islands would have got same or similar status of that of St Martin, had there been any real arbitration. Of course, someone can also argue that islands of Myanmar and Thailand were also given full effect while drawing the lines.
Some of the opponents in Bangladesh claimed that Bangladesh has lost its partial rights on the same island based on this verdict. That’s again an exaggeration as Bangladesh retained territorial waters surrounding the same island.
Impact on the other Bay of Bengal Case
Bangladesh and India are fighting to fix the rest of the boundary. Unfortunately, due to lack of public domain documents on that case, I won’t write on it. Still, there are few points I can think of -
1) Bangladesh won’t be able to argue anymore that they don’t have the access to international waters. That was their crux of argument in ITLOS. Now, they got it by the virtue of this verdict.
2) Bangladesh will be able to argue for similar regime for delimitation, i.e. an angular bisector at the river Haribhanga, that separates India from Bangladesh. However, learning from the court exercise, Bangladesh may also claim an adjusted equidistant line. The adjustment will be claimed showing lower economic status of Bangladesh (LDC country) and higher population density.
3) India will argue for an equidistant line. The proposed adjustment of Bangladesh will be resisted by India citing high-population, limited access of North-East India to sea and concavity of Orissa coast. India may also claim that Orissa and Bihar are India’s poorest states and they depend on the portion of EEZ in contention.
4) The court will probably draw an equidistant line and will make decision (based on strength of arguments) whether to adjust the line.
5) The amount of EEZ in dispute will be much less than that of Myanmar-Bangladesh dispute. The settlement area (area lost or gained) will probably be even less.
6) If Bangladesh doesn’t get satisfactory result from this dispute and if Awami League is running Bangladesh at that time, there will be a claim of treachery from the opposition.
7) The case will also decide on continental shelf delimitation. Now that we know of it in details, I believe the same line drawn for delimiting EEZ, will most likely be extended to delimit the continental shelf also.
When China and Philippines are facing same or similar issue on sea limit delimitation, Bangladesh and Myanmar settled it in the court. Unlike India, China has said “No” to any court settlement and is pursuing hard-handed solutions to its neighbors and claims it has no obligation to go to the court. The difference of approach is significant since in the new world order, China has been seen as a semi-pole in what we call a Uni-polar world. To know more about the dispute, one can refer to this wiki entry, though the English wikipedia is largely banned in China. Apart from Philippines, Vietnam, Malaysia, Taiwan and Brunei are part of the same dispute.
1. International Maritime Boundaries, Volumes 2-3
3. The verdict
4. Prothom Alo report
6. China’s invented history :) link
I have been reading for a while about post-colonial world and how colonies were able to turn things around. The blog post from Jyoti Rahman made me think twice. Was it all correct?
Being Indian, the version I read and heard a hundred times from my childhood, was that Indian subcontinent along with a lot of other former European colonies were hammered quite heavily by colonialist masters. The sole reason of our current state of poverty seems to be related to our history, which has a couple of hundred years of colonial rule in its timeline. During this period, our raw resources were taken away and were used in factories across Europe to produce items for consumption of rest of the world. On the other hand, our local small industries were bulldozed with high restrictions and they soon mired into oblivion – leaving us a nation full of poor people. Little or no investment in Agriculture and food-distribution caused several famines during colonial rule. No effort for public education system left a bunch of illiterate people. To add on top of that, ever since we became independent, we are doing better and better, with more food, some industries and now the services industries to cheer about. There are multiple examples around us to justify this pattern. (Read an article by Amartya Sen on this topic)
To question this understanding, the first graphics I would refer to, is simply of growth of some of the countries post-independence. If I have to assume that it was raw materials from colonies that caused the growth in masters, then there should be an economic effect of increased availability of those resources in colonies post independence. And a scarcity of the same should be causing growth to limp in the masters.
But the graph above shows absolutely the opposite. In last 50 years, colonies might have got little improvement of per-capita growth, but the gap between colonies and their former masters has expanded at a rapid pace. This makes me comment that rather than we demanding our independence, the masters should have voluntarily freed our nations.
But then comes the next question, why is this disparity, even after the decolonization? There are two answers – one in the side of the masters, the other was from the colonies. After world-wars, the European nations were better of without colonies because they avoided one of the core reasons of their disputes – ownership of colonies. Post-world-war, Germany developed rapidly and this time they didn’t have a problem with other European countries, as they didn’t vie for colonies. There are no intra-state war (not even a proxy one) among Western European colonialists after the colonialism ended. Rather the cold-war kept them united.
The second reason would probably be attributed to a successful shift of their economy to tertiary one, which these countries already doing good at. With higher level of average education and skills in Science, they were bound to lead the world in services and innovation driven economies.
On the other hand, most of the colonies inherited better institutions than their previous native rulers have built (Indian institutions were far better in 1947 than what was left by Mughals in 1757). However, for most of these countries, strong nationalist sentiments drove them to success in the form of independence. These sentiments, coupled with fear from recent-past experiences, made these countries extremely business-unfriendly. They became inward looking, anti-foreign-investment and invested most of the resources into less-productive sectors such as Agriculture and small-scale industries. However, standard of living were improved in these countries in the form of health, education and social indices went up and towards the end of the graph, those start to yield some good results for them.
Now going back to where I started, were these colonies better off being never fallen into the grips of masters? I see point for and against it clearly. The points in favor of this view are discussed in the beginning. The points against it are also becoming clear. For example, between 1750 and 1947, the growth in the World economics were mostly fueled by manufacturing. There were new innovations all along the Europe and an active patent system to protect interest of investment on innovation. Indian rulers before the British did never thought of value of innovation, nor did they encourage it with more business. The culmination of pre-Raj Indian empires were said to be Akbar’s rule that created space for peaceful existence, but not even an iota of industrialization and literacy drive that one would expect in contemporary Europe. If you look at Akbar’s EU contemporaries, you’ll find Elizabeth of England and she appears to be much more farsighted than Akbar. Long later in 1857, Indians started their first war of independence with an objective of getting their old Mughal-Maratha rulers back but not for democracy, literacy, separation of church and state or modernization of infrastructure and institutions. India didn’t yet have enough decision-makers to think in those terms.
In summary, I feel we got what we deserved. Even if there were no such thing named colonization (which again was inevitable) or we were never colonized, we were having roughly the same standard of living that we have today. Whether we named our country as India, or were we have 20 different countries instead of three – are different questions and I can not address them. Guided by democracy with no political setup or autocracy with an extension of Mughal-Maratha-like empires would not have taken us far beyond where we are today.
Bangla Version with a lot of discussion.
I will go over all three major causes for India-Bangladesh border killings. I have summed up a few facts and possible directions.
Cattle trade has become the major root cause behind the regular border killings at India-Bangladesh border. In my first part, I will cover major causes of this illegal trade, possible way forward and some facts around it.
1. India has the world’s largest cattle herd but hardly consumes any beef. Only two of the large Indian states allow cow-slaughter – Kerala and West Bengal.
2. Bangladesh cattle herd is stagnant over decades but people do consume beef.
3. These two factors make a natural direction of cattle flow from India to Bangladesh.
4. Approximately 1.5 million cows cross border every year. (Of course this statistics can not be verified.)
Given all these factors, it will be difficult to stop the trans-border cattle trade through an otherwise porous border. But there are a couple of scenarios which could put a break in illegal business.
First one, the cattle trade to be made legal and let market forces to guide it. This will mark the end of illegal cattle trade across the border. It will also allow cattle-owners to get fair price out of their cattle. The availability and business along with new investments in the cattle sector of India will be up. BSF, the major accused border guards of India, is a strong supporter of this.
However, this will face challenges, especially in India.
First, it will be a massive religious hurdle to cross. Predominantly Hindu India worships cow as a god and it will be politically challenging to implement this proposition. On the other hand, the fact that India exports cattle to Pakistan now-a-days, shows this religious forces are not as strong as people think of.
Second, it may hurt Indian beef and leather exports and will face anticipatory lobbying against this decision from those two sectors. It will be vehemently opposed by West Bengal, which sources 55% of Indian leather exports and 30% of Beef exports. Export of cattle will eventually mean export of leather and beef. If an excess of cattle crosses the border, then both of these industries will have to compete harder to ensure their supply of raw materials.
Now let me move to the next scenario. This would be a good one for India and the data indicate India is trying to move towards this. However, it would be a difficult-to-cope scenario for Bangladesh.
Under this situation, India becomes a large beef and leather exporter and the cattle doesn’t cross the borders at all. Instead they end up in large processing houses in West Bengal and be exported thereon as beef and leather. Since the cattle owner gets more from a standard licensed beef trader than an illegal cross border cattle trader, the majority of cattle doesn’t reach the borders. Along with this, enforcement at different levels should help divert the flow of cattle. Following is the beef export chart of India for last few years -
India is currently the fourth largest beef-exporter, ahead of the USA. But given the low consumption and huge cattle fleet, in no time they can become the top beef exporter. The dual utilization of cattle will also ease the pressure of price for the leather industry which exports $5bn a year. On the other hand, Bangladesh would have to import beef at a higher price as they have to compete with global prices (or prices in the Middle East – the major export destination of Indian beef). The leather industry, the second highest foreign currency earning sector of Bangladesh, would suffer from price pressure.
Given these two scenarios, it would be better for both Bangladesh and India to agree on a time-limited export quota of cattle, as India is exporting to Pakistan a maximum of 1 million per year from 2005. Meanwhile, Bangladesh should work on their domestic cattle and do the same that Pakistan did. It’s not that difficult in these days to multiply cattle and replace Indian supply with their domestic one. The border population can themselves be engaged in raising cattle. Self-sufficiency has no alternatives and that will lead to best possible result.
1. Indian Planning Commission has already suggested to remove all barriers against beef-export (but not cattle export) in the next five-year plan. Indian right-wing Hindu organizations are already protesting it, but I will be surprised if protests gather steam. source : News
2. Indian beef exports to continue growing and India will become the third highest beef-exporter by 2012. It also notes that South-East Asia, North Africa and Middle-East are main destinations of Indian beef. source – News
3. I got hold of 11th Planning Commission report. It states -
“Since slaughter is a state subject, the actual processing of meat for exports as well as for domestic demand follow the laws of the individual states, which are at variance with each other. The country needs to have consistent and uniform slaughter policy across different states to make the industry competitive.”
It looks like India is going to become a large beef-exporter sooner that I thought of.
India is on course to become largest exporter of beef in 2012. The amount expected to be exported is 1.5 million tonnes, against 500,000 tonnes shown in the graph (year 2008). The addition comes through the export of buffalo-meat.
Further readings/sources -
4. All chart data are from FAO database.