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Post by Honorebu on Feb 20, 2016 18:14:30 GMT
We thank God them no tear cloth sha Hehehehe I dey use style follow this thread just in case
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Post by omohayek on Feb 20, 2016 23:47:25 GMT
The defect in your reasoning is pointing to examples that essentially piggyback off protectionist states. In the example of Hong kong, they had UK, former old colonial and protectionist economy, and currently have China, which developed in recent years out of protectionist policies. They can now scream free trade when they've gained comparative advantages. Hong Kong, has been a trading hub for UK for ages, with colonial wealth to booth, it's now a trading powerhouse to China and the UK. Singapore to a great extent also piggybacks off China. A boat load of manufacturing plants are owned by Singaporeans which are feverishly protected by China. Where is Nigeria’s China? You just can't immerse yourself in all these feel good theories without looking at the Nigerian situation. Why was SAP a total disaster when it was prescribed to us? Free trade and devaluation were high on its ethos. If we don't develop and actively protect our industries as I pointed examples in references, all we have to trade are raw commodities. We will never develop processing capabilities, it will always be cheaper to process them where the advantages are higher. So how would we ever gain any advantage beyond what God endowed on us? Protectionism has its own risks, if not managed right, you will kill some bilateral agreements. But there are now many countries going back to protectionism after getting burnt. Like anything economics, the theories are not mutually exclusive, hence America's dubious role as the biggest protectionist and also the biggest proponent of free trade. The hypocrites! Nigeria should selfishly adopt what will benefit it's long term growth which may encompass gradual devaluation but active protectionism. There is no pure economic theory, countries just have to work for their selfish interest. This is all just nonsensical verbiage meant to disguise the fact that you don't have the first clue what a rigorous economic model would look like, or what econometrics is about. I can't waste my time arguing with someone who is totally ignorant of the simplest economic ideas, but utterly convinced that he knows better than people who have devoted years of hard study to the subject.
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Post by omohayek on Feb 20, 2016 23:51:31 GMT
Read this article on modern protectionism and how everybody games the WTO so you don't appear to run against the norm of free trade mantra. All BRIC countries are experts in the game and it's no wonder their economies grew. Hidden persuaders of protectionism. www.economist.com/news/special-report/21587381-protectionism-can-take-many-forms-not-all-them-obvious-hidden-persuadersWe are so so far behind. We don't even have viable industries beyond crude oil exports! Time to use the favorable dual exchange rates to grow our other industries and let the cheap imports sort itself in the free market. My major fears are corrupt bankers and nepotism such as favoring the likes of Dangote and co. That's already a reality with guaranteed rates for his mega refinery. But if it reverses importation of gasoline to exportation, then it's still a positive for the country. More irrelevant references to articles, instead of substantive economic research. Let me ask you again. What are supply and demand curves? What is deadweight loss? What is equilibrium? What is comparative advantage? What is regression analysis? Do you really understand any of these things? If you displayed any evidence that you did, and could explain in logical terms just what these terms imply and what objections you have to them, then it might be worth taking you seriously, but until then I'll ignore anything you have to say.
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Post by omohayek on Feb 21, 2016 0:07:37 GMT
Let me give you real world experience of protectionism as practiced in the USA. As a side gig, I have gotten into global commodities trade and recently saw an opportunity importing dried catfish into the US market. But when I started going through all the tariffs and road blocks ahead. It became cheaper on the long run to source the catfish in farms here in the states and dry them myself. Another example is the solar sector here in the USA. The government subsidies the manufacturers at a ridiculous rate to frustrate cheap Chinese imports. Same can be said for the agricultural industry. USA basically crashes the corn market everywhere that the likes of EU have banned or restricted certain agricultural produce from the USA. Has anybody tried to export anything into China besides raw commodities? Do you know how difficult it is to export to China outside the aforementioned? Do you know how China manipulates it's currency to always game the system after it established competitive advantages in manufacturing? How many times have they been reported to World Trade Organization for unfair practices? You cite instances of American protectionism as somehow supporting your views, and yet you fail to appreciate that said protectionism actually hurts American consumers, who are subjected to rent seeking by special interests lobbying the government. If you understood what dead-weight loss was all about, you'd have cottoned on to this. The fact is that there is an entire field of economic research devoted to the topic of how rent-seeking agents hijack governments for their own selfish interests: it's called public choice theory. It's not a field you'll get anywhere in understanding without an understanding of even economic fundamentals, however. If you're truly interested in understanding how economics works, rather than just in winning an online argument, I strongly suggest that you actually take the time and work through - at the very minimum - the theory of comparative advantage. Read all of the material, and test your understanding by trying the associated problem sets. If you do this and are still unconvinced that protectionism is a bad idea, we will at least have a certain minimum of common ground on which to base a discussion. If you think it's not worth your time to familiarize yourself with the basics, why should I engage you in a discussion after spending years doing the very thing you won't spend even a few hours attempting? The question is whether you're looking for a real understanding of the facts, or just want to enjoy the satisfaction of thinking you understand more than you actually do. There is no shame in admitting to oneself that one knows less about a field than one might have thought - indeed, the truly wise man is the one who knows what he does not know. Behavior to the contrary is what I've been criticizing Buhari for, and it's the very same issue I have with your arguments. I would not go to my doctor and presume to tell him how to treat my illness after spending a little time googling online, but when it comes to economics, for some reason everyone feels qualified to give unqualified opinions based on nothing more than personal anecdotes.
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Post by Honorebu on Feb 21, 2016 0:21:37 GMT
omohayek easy please. No need to call anyone ignorant .E jo e ba wa edit abala yen
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Post by olukumi on Feb 21, 2016 0:31:36 GMT
You seem not capable of debating without throwing cheap insults, i thought you'd be better than that and so on that note. I'm out.
Enjoy your econometrics. Sending me back to business school theory from 13-14 years ago. LolzChanged my mind.
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Post by olukumi on Feb 21, 2016 0:42:48 GMT
The defect in your reasoning is pointing to examples that essentially piggyback off protectionist states. In the example of Hong kong, they had UK, former old colonial and protectionist economy, and currently have China, which developed in recent years out of protectionist policies. They can now scream free trade when they've gained comparative advantages. Hong Kong, has been a trading hub for UK for ages, with colonial wealth to booth, it's now a trading powerhouse to China and the UK. Singapore to a great extent also piggybacks off China. A boat load of manufacturing plants are owned by Singaporeans which are feverishly protected by China. Where is Nigeria’s China? You just can't immerse yourself in all these feel good theories without looking at the Nigerian situation. Why was SAP a total disaster when it was prescribed to us? Free trade and devaluation were high on its ethos. If we don't develop and actively protect our industries as I pointed examples in references, all we have to trade are raw commodities. We will never develop processing capabilities, it will always be cheaper to process them where the advantages are higher. So how would we ever gain any advantage beyond what God endowed on us? Protectionism has its own risks, if not managed right, you will kill some bilateral agreements. But there are now many countries going back to protectionism after getting burnt. Like anything economics, the theories are not mutually exclusive, hence America's dubious role as the biggest protectionist and also the biggest proponent of free trade. The hypocrites! Nigeria should selfishly adopt what will benefit it's long term growth which may encompass gradual devaluation but active protectionism. There is no pure economic theory, countries just have to work for their selfish interest. This is all just nonsensical verbiage meant to disguise the fact that you don't have the first clue what a rigorous economic model would look like, or what econometrics is about. I can't waste my time arguing with someone who is totally ignorant of the simplest economic ideas, but utterly convinced that he knows better than people who have devoted years of hard study to the subject. You can't argue the facts and you keep hugging theoretical and mathematical BS. You have historical and empirical evidence in my post but you'd rather hug a model. Lolz
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Post by olukumi on Feb 21, 2016 1:09:30 GMT
Read this article on modern protectionism and how everybody games the WTO so you don't appear to run against the norm of free trade mantra. All BRIC countries are experts in the game and it's no wonder their economies grew. Hidden persuaders of protectionism. www.economist.com/news/special-report/21587381-protectionism-can-take-many-forms-not-all-them-obvious-hidden-persuadersWe are so so far behind. We don't even have viable industries beyond crude oil exports! Time to use the favorable dual exchange rates to grow our other industries and let the cheap imports sort itself in the free market. My major fears are corrupt bankers and nepotism such as favoring the likes of Dangote and co. That's already a reality with guaranteed rates for his mega refinery. But if it reverses importation of gasoline to exportation, then it's still a positive for the country. More irrelevant references to articles, instead of substantive economic research. Let me ask you again. What are supply and demand curves? What is deadweight loss? What is equilibrium? What is comparative advantage? What is regression analysis? Do you really understand any of these things? If you displayed any evidence that you did, and could explain in logical terms just what these terms imply and what objections you have to them, then it might be worth taking you seriously, but until then I'll ignore anything you have to say. You expect me to get into a class room and do a regression analysis for you and calculate deadweight loss? What about presenting my very own macroeconomic model? Lolz. Are you for real at all? Rather than regurgitate classroom material, apply some wisdom to what you learnt in class. Strong economies routinely devalue their currencies to make their exports cheaper and more attractive which helps them gain unfair advantages. China has played that game for years and there are several complaints to WTO complaining about China's practice. Please tell me how Nigeria will benefit from a cheap currency with our crisis? What do we have to export or what export substitution can we implement in a short time frame?
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Post by olukumi on Feb 21, 2016 1:20:18 GMT
Let me give you real world experience of protectionism as practiced in the USA. As a side gig, I have gotten into global commodities trade and recently saw an opportunity importing dried catfish into the US market. But when I started going through all the tariffs and road blocks ahead. It became cheaper on the long run to source the catfish in farms here in the states and dry them myself. Another example is the solar sector here in the USA. The government subsidies the manufacturers at a ridiculous rate to frustrate cheap Chinese imports. Same can be said for the agricultural industry. USA basically crashes the corn market everywhere that the likes of EU have banned or restricted certain agricultural produce from the USA. Has anybody tried to export anything into China besides raw commodities? Do you know how difficult it is to export to China outside the aforementioned? Do you know how China manipulates it's currency to always game the system after it established competitive advantages in manufacturing? How many times have they been reported to World Trade Organization for unfair practices? You cite instances of American protectionism as somehow supporting your views, and yet you fail to appreciate that said protectionism actually hurts American consumers, who are subjected to rent seeking by special interests lobbying the government. If you understood what dead-weight loss was all about, you'd have cottoned on to this. The fact is that there is an entire field of economic research devoted to the topic of how rent-seeking agents hijack governments for their own selfish interests: it's called public choice theory. It's not a field you'll get anywhere in understanding without an understanding of even economic fundamentals, however. If you're truly interested in understanding how economics works, rather than just in winning an online argument, I strongly suggest that you actually take the time and work through - at the very minimum - the theory of comparative advantage. Read all of the material, and test your understanding by trying the associated problem sets. If you do this and are still unconvinced that protectionism is a bad idea, we will at least have a certain minimum of common ground on which to base a discussion. If you think it's not worth your time to familiarize yourself with the basics, why should I engage you in a discussion after spending years doing the very thing you won't spend even a few hours attempting? The question is whether you're looking for a real understanding of the facts, or just want to enjoy the satisfaction of thinking you understand more than you actually do. There is no shame in admitting to oneself that one knows less about a field than one might have thought - indeed, the truly wise man is the one who knows what he does not know. Behavior to the contrary is what I've been criticizing Buhari for, and it's the very same issue I have with your arguments. I would not go to my doctor and presume to tell him how to treat my illness after spending a little time googling online, but when it comes to economics, for some reason everyone feels qualified to give unqualified opinions based on nothing more than personal anecdotes. How does America subsidizing it's core industries like agriculture and preventing dumping of cheap goods encourage rent seeking? You are assuming that the protectionist policies gives rise (in this case) to deadweight loss without considering socio-political impact of the decisions, meanwhile those protective measures have kept an entire region's economy (mid-west) employed and they have in turn kept a thriving industry. So at some point, it would have been inefficient, but now, it is thriving and protecting jobs. You seem to forget we are not working in a vacuum and you have to consider the politics involved in these decisions. The more reason you have to leave the classroom and get in the real world. Policies that work for developed countries and designed to rip off developing countries should not be given any time of the day. The biggest problems we have in Nigeria as I type: 1. Lack of a diversified economy 2. Lack of nascent/infant industry 3. Unemployment and protection of employment All have been mostly addressed by several countries via protectionism. When you devalue your currency and open everything up especially when your only export is a single commodity that is in the tank, then the Igbo boys will keep obliging you with the continued dumping of useless imports that will be more expensive. When will we learn? I have done my time in the class and have also paid my dues in the business and corporate world. Call me when you know how the real world works.
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Post by Belmot on Feb 21, 2016 8:39:13 GMT
omohayek easy please. No need to call anyone ignorant .E jo e ba wa edit abala yen Where is shymmex and the rest? The whole place looks dry
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Post by omohayek on Feb 22, 2016 12:02:28 GMT
omohayek easy please. No need to call anyone ignorant .E jo e ba wa edit abala yen E pele, sugbon o le ju lati soro pelu eniti o ba mo nkan ti o n so, ko de fe gbo lowo eniyan mi.
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Post by omohayek on Feb 22, 2016 12:42:04 GMT
You seem not capable of debating without throwing cheap insults, i thought you'd be better than that and so on that note. I'm out.
Enjoy your econometrics. Sending me back to business school theory from 13-14 years ago. LolzChanged my mind. If by "cheap insults" you mean that I point out incoherent nonsense when I see it, I wear that label with pride. By all means, continue to ignore 200 years of the accumulated knowledge of minds from all over the world, in favor of your own prognostications - I won't stop you, but I won't waste my time trying to argue with you either. One can lead a horse to water, but one can't make it drink. For those whose minds are actually open, and are willing to learning something about why no serious economist takes protectionism for something other than folly, consider this: if the way to prosperity were through protectionism, surely we would be even better off if we set up tariffs and quotas between individual Nigerian states, between neighboring LGAs, and even between homes on the same street! Let's take it to the ultimate conclusion and refuse to buy anything from anyone: surely this would make each of us richer than Dangote! Can anyone see the problem with this? The principle of comparative advantage is at its root a simple idea, but it is not an intuitive one, and as such the idea is something even well-educated people tend to have difficulties grasping. At its root is the notion of opportunity cost, which means that for every alternative we take, we need to take into account the other alternatives which we have forgone to make our decision. It is by taking account of opportunity costs that we realize that a lawyer who earns $200 per hour is better off paying a cleaner to do his housework $10 per hour than doing the housework himself, even if it would take the cleaner 4 hours to do a job the lawyer could do in 1 hour. By hiring a cleaner, the lawyer is better off by $160, and the cleaner by $40, for a total gain of $200 for both parties. Exchange my lawyer and cleaner example for countries, and you see why it makes sense for poor countries to trade with rich countries, even when the rich countries are more efficient at doing everything than the poor ones: both countries are better off if the rich countries concentrate on the areas where they have the greatest efficiency advantage, while importing the other products they need from the less efficient countries. It ought to be obvious that free trade is by definition beneficial for both parties, otherwise they would have no incentive to agree to it, but a simple numerical example like the one I provided should drive the point home - and reinforce why there is no substitute for rigorous reasoning based on mathematical modeling. Protectionism is based on the absurd notion that exports are good while imports are bad, but the entire point of exporting anything in the first place is to afford imports, just as the entire point of working for a living is to be able to buy things. Protectionism is the national equivalent of the miser who thinks of money as good in itself, even when it can never be spent, rather than as merely a means for acquiring other things.
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Post by olukumi on Feb 22, 2016 12:58:14 GMT
I'll address your lawyer and cleaner post later in the day. Need to take care of paying client business first. Lolz
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Post by olukumi on Feb 23, 2016 13:01:58 GMT
Let me address your lawyer and cleaner using real world examples i.e. countries.
I'll start by getting some facts out of the way. Free trade has a lot benefits to consumers since efficiencies of production are passed along to consumers in terms of reduced cost of the goods and in "theory" increased quality due to increased global competition. So that part checks out in "theory", but when we look at complex entities such as countries then things are very different im practice.
So let's change your lawyer and cleaner examples into countries and corporations. Using a few real world examples not some theoretical BS.
Case 1 It is cheaper to import palm oil from Malaysia and Indonesia than to buy locally profuse palm oil due to economies of scale gained in the aforementioned countries, so Nigeria allows unfettered access into our markets and imported palm oil thrives and our local palm oil industries dies out.
Result: High unemployment and the burial of a once thriving industry (Nigeria was the number 1 producer of palm oil early in the 20th century). Okitipupa dead or on its knees, Opomu palm oil suffering same fate and the entire SE palm oil industy is dead. Yet, we have oil palm trees all over the country.
Case 2 Oluwa Glass made good quality glass and was thriving but we followed the principles of free trade and igbo boys started importing cheap glass from China.
Result: Reduced building standards due to dumping of substandard goods. A dead local industry with resulting high unemployment.
Case 3 Our textile industry up North, once thriving, now opened to compete with cheap imports from China and high quality imports from Austria.
Result: Unemployment and dead companies
Case x, y, z
Same thing and same results. High unemployment all over the place and a country that can't develop it's industrial base so it's left to only exporting commodities gotten from the ground. It won't even have the capacity to build basic processing due to immediate andopen availabilty of imports. Hello refineries? Hello Ajaokuta? Hello etc etc. You'll find similar stories all over Africa. It's the Nigerian story!
We are used as a dumping ground for cheap international goods and not allowed to develop our own industrial base while the developed countries use all sorts of intervention to game the system. Of course they are armed with your "econometry" and theories to booth, we all learned it in business school.
I remember the spirited debates we, international students from developing countries, had with Americans and Europeans when we started punching holes in the theoretical BS the Prof was peddling. He of course admitted to the unfair practices we alluded to where the rule makers are also the rule breakers. Which brings me to the rules of trade.
When you are setting up a trade agreement, you try and negotiate from a position of strength and most importantly, you sign trade agreements with the self interest and self preservation of your country in mind. Period.
So let's look at the role of Governments in Porters competitive advantages of nations in the specific area of stimulating early demand for a product. Each self serving country intervenes in free trade by using a combination of the following protectionist tools:
1. Import quotas - Basically limiting the number of imports entering their borders to protect their local industries. Example: EU and USA have several import quotas on all manner of goods especially agricultural produce. Once quota is reached then sayonara. China has several import quotas to protect ailing industries example, cotton, grains etc
2. Subsidies and bailouts - Government intervenes by subsidizing production, not consumption (consumption encourages rent seeking like we have with oil subsidies in Nigeria). Example: Detroit Auto bailout in USA where Obama protected the local auto industry with tax payers money to reduce the numbers of jobs lost and also increase USA's competitive posture. The once moribund auto companies are now thriving. Example 2: US farm subsidies. The government subsidizes agriculture even at a loss. But now the farms are thriving and you can't out-compete the USA in corn or Beef exports.
3. Tarriffs - this is a bit old school but still in wide use. The government essentially just puts a huge fee on certain import that they deem disruptive to their local economy. Example: US Tarriffs on cheap steel from China. They slapped a 236% tariff on Chinese steel to protect local steel companies. EU tariff on China's solar panels.
4. Currency manipulation - this tool is essentially used by countries that have gained some form of trading advantage. They devalue their currency so it's cheaper to buy from them than to produce locally. Devaluation works in your favor here due to the relative strength of the purchasing currency against the producing country's currency. Examples: China with fixed currencies artificially deflated despite their strong balance of trade. USA/UK with quantitative easing to keep interests rates very low and keep dollars cheap to access.
Too many examples of protectionist measures from your so called free trade proponents to list. Do as I say, don't even attempt to do as I do or else you'd get crushed.
What are the governments doing when implementing these policies?
1. They are protecting jobs 2. They are protecting entrepreneurs 3. They are preventing brain drain 4. They are reinforcing education so brains can be applied to production activities rather than strictly trade based activities 5. They are building infant industries that would not see the light of the day if government doesn't intervene 6. It's a self preservation mechanism
Now having said all that, the government's role doesn't end there. In order to get a country to build competitive advantage in global trading, the government also has to do the following:
1. The government will also enforce standards using agencies. This is what NAFDAC and SON are meant to do. 2. The government should enforce local competition by breaking monopolies and monitoring oligopolies. 3. Stimulate early demand for local products either directly or covertly to ensure the local industries survive. This can come in form of tax breaks to consumers or patriotic outreach such as buy Nigerian etc 4. Pick winners and losers by focusing on specialized factors. The government can't intervene in all industries for survival.
When all these are in place then you can negotiate trade deals to your advantage. And when i say trade deals, I'll prefer bilateral trade agreements where we pick and choose and negotiate from a position of strength while our local industries are thriving or protected against unfair competition. If we didn't enter trade agreements blindly, how did we become a dumping ground for all manner of cheap imports like used cloths, Garri (where we should have an advantage geing the biggest producer of cassava), toothpick and Isana!
All our local factories are dead or dying. Had we protected them, we could have kept a lot of our educated base. Local knowledge and production standards would have improved. But we only have a bunch of leeches. The rich and thriving importers mostly from the SE ravaging our economy by dumping unchallenged and substandard imports effectively killing almost all our industrial base.
Is free trade good? Yes, but only if you apply commonsense and negotiate from a position of strength. Are we in any position of strength at the moment? Hellz to the NO. You can observe how the excessive demand for import dollars is wrecking our economy and currency.
How then do we grow our local industry? More unfettered free trade where Mr. Alao will borrow funds at high interest rates to invest in a soap making plant while Uche imports cheap soap that will ensure Mr. Alao's capital investments doesn't see the light of the day? What happens to the bank loans when Alao gets insolvent? Both the Bank and Alao suffer for trying to build up an industry!
A potential danger of devaluation that nobody has really paid attention to is the effect on our banks. Our banks are highly leveraged with dollar denominated debts from serious exposure to the oil and gas industry while their assets are denominated in naira. If the government should allow a Leissez Fairre attitude towards the currency and allow it to track with the black market then we are in deep deep shit. The balance sheet position of our banks would tumble overnight and we'll enter a major banking crisis.
As I type, we already have a lot of distressed banks due to the aforementioned exposure and the effect of TSA. No cheap government funds! I called for a stress test in one of my posts in another page.
So that is the difference between naive text book posturing and the real world.
I wrote this for folks willing to learn and really not for omohayek's argument that is now bordering on insults.
I'd recommend the following books for those that haven't yet read them.
1. The competitive advantage of nations - Michael Porter (it's required reading in most MBA curriculum ) 2. The winners and losers in global competition - Why Eco-efficiency Reinforces Competitiveness : a Study of 44 Nations 3. The Borderless World: Power and Strategy in the Interlinked Economy
Apologies for all the typos.
I am officially out.
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Post by Omoluabi on Feb 23, 2016 21:48:19 GMT
Hmmmmmm......
Oro pa esi je.....
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