Monday, 8 December 2008

Weighing up WTO versus GNH

8 December, 2008 - Free trade, an economist once remarked, means that a great product from a small country can succeed in global competition. Free trade means that poor countries can sell their products, for instance textiles, to the rich world without facing punitive tariffs.

WTO is a living embodiment of that free trade. That the multilateral trading system, for more than half a century, has underpinned global prosperity is a given. World Bank studies maintain that because of free trade the world economy has been growing at its fastest and more countries are sharing in that growth than ever before. WTO has 153 members and represents more than 95 percent of total world trade.

But - despite the spectacular rise in living standards that has occurred as barriers between nations have fallen, and despite the resulting escape from poverty by hundreds of millions of people in those places that have joined the world economy - it is hard to convince politicians of the merits of free trade. Today, just as Bhutan is ready to join WTO, there is a queue forming in the country to denounce such an attempt. Never mind that the denouncers are emerging after nine lengthy years since the start of negotiations of Bhutan’s accession to WTO.

The argument against WTO is that it contradicts GNH - Bhutan’s unique development guide. But, aside from such one line rhetoric, no official, not even the government leading the charge, has given us anything that would lead us to believe that WTO is harmful to GNH. Egged on by a bevy of bureaucrats, some politicians are getting carried away by the thrill of saying no. We would like our politicians and so-called think tanks to explain to us why WTO is not good for Bhutan. Simply saying it’s bad is not good enough.

A paper written by Professor Mark Mancall of Stanford University - ‘Bhutan’s quadrilemma: To join or not to join the WTO’- provides some perspectives. He argues that Bhutan’s decision to join WTO strikes at the very heart of GNH. His point is this - GNH being the responsibility of the state is to create an enabling environment where citizens can seek and find happiness: thus GNH requires that the state manage the economy. WTO, on the other hand, works on a free market based economy meaning that under it the economy is independent and self-regulatory.

He adds: “GNH posits the preservation and development of the national culture as both a purpose and an instrument for the preservation of national sovereignty. Minimally controlled international trade, however, which is the immediate goal of WTO, may require allowing the importation of goods that will have a severe impact on the national culture.”

If not WTO then what?
Can’t say one can intensely disagree with Professor Mark Mancall. If that’s the case, is there a GNH-based model of economic development, that would contribute to a stronger and better Bhutanese economy as leaders and people of this country dream and speak of. Without taking advantage of free trade, it is hard to imagine that a country could have one.

Is dependence on one country for trade and the survival of one’s economy good in the long run? SAFTA is a long shot away from becoming reality. As long as India and Pakistan have problems, this body will never see the light of day. BIMSTEC lacks leadership, is slow and will take time. In any case, these deals are known to be tame agreements, knocking down barriers between countries with little to lose, but also little to gain, from freeing two-way trade in most sectors.

What is a GNH economy anyway? State controlled economy has never worked, that’s why India has opened and liberalised its economy and that’s why it’s an emerging economic giant today. State controlled economy is protectionism and is the enemy of the poor, because it puts up the price of basic consumer goods, not to mention fuel, through lack of choice in the market. Druk Air tickets are dearer and away from the reach of many precisely because of this reason.

It makes sense that the government makes not a mockery of GNH by joining WTO, if the two appear to differ in principle and in workings, but it needs to give us citizens an alternative model to a stronger, better economy - one that would liberate our economy from the narrowness of our domestic market and open it up to the broader opportunities of world commerce.

(Comments are welcome and will be printed. E-mail them to

By Kencho Wangdi

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