Mirador said:
Unfortunately, they cannot do this alone, to become competitive exporters local businesses will need the committed support of the government. Technology is only one aspect, and in many instances the old labor-intensive technologies are more competitive. More urgent issues are energy (electricity) costs, transportation costs, bureaucratic red tape, I have never heard of a third world experience where traditional businesses have managed to transform themselves into competitive exporters without government help, something very unlikely from our laissez-faire, let-the-market-take-care-of-it philosophy of our current government.
Mirador:
I quite agree with you that there needs to be greater government incentives, but not in the area of subsidies. There is far too much of that already. The Electricity Subsidy is the greatest evil of all. That particular beast does little else than undermine the population's basic integrity, ambition and incentive to do for themselves. It is an insidious and psychological destruction of the basic drives that has elevated humanity in the heirarchy of the animal world.
The policy of laissez-faire does need to be modified to the extent of elimination of monopolistic business regimes, or at least the partial control, through law, of these regimes to the extent that they serve the public while extracting their profits.
Governments of "third world" countries cannot afford very much in the way of incentives because of their very limited natural resources and tax bases. For a country such as the DR to emulate the economic giants of Europe, the US and others is nothing but a pipe dream. It just can't be done by reasons of a lack of economic wealth. To attempt to do so results in a hurricane of taxation that ends up stifling economic growth for the entire nation.
The root cause of most of the problems in most third world countries is the business and governmental corruption that permiates the society. Most third world countries are composed of a "taker" society created by constant poverty which the politicians have created by "political sops" designed solely to gain votes for themselves and their party. Examples of such are the subsidising of electricity and propane in the DR, the subsidising of farm products in the US, Europe and other political entities. These actions are examples of socialistic economies that, in the long run, result in the bankruptcy of a nation which has not the natural resources in support of that philosophy. Take a look at Cuba and you have a prime example of a bankrupt nation which is dependent on "hand-outs" from more prosperous "sympathiser nations".
For any country whose tax base is limited, there can never be effective growth without the participation of the business world becoming involved in the betterment of the overall society that supports it.
Look at the millions of pesos spent annually by the DR Government in support of the political parties in place. This is NOT money well spent and is totally unnecessary by all standards of good government. Congressional incumbents voting themselves and their cronies an 80% pension after only 2-6 years service only adds to the already overwhelming debt load imposed on the nations society. The "Keynsian" (?sp) system of economics just doesn't work well for low income countries with no natural resources to back up these types of expendatures.
I could go on and on, but this is not the place for a disertation on "third world" socio-economic" theories.
Texas Bill