On Monday June 22, The Institute of World Politics welcomed Shankar A. Singham to discuss anti-competitive market distortions, the importance and potential impact of their reduction, and how we should implement such measures. In particular, he discussed his Competitiveness and Enterprise Cities Project, which deals with these issues.
Mr. Singham began by elaborating upon what is required for economic growth within a country or city. From his experience overseeing major transitions such as the privatization of the UK electricity industry and EU accessions in the former Soviet Union, he cites three key forces as being: open trade, competitive markets, and property rights protection. In relation to these forces, he identified three fundamental laws: wealth can be created or destroyed, wealth is much easier to destroy than create, and competition is the most powerful force for wealth creation. Based on these ideas, he noted that trade barrier restrictions present obstacles to growth.
He gave a brief history of the global trade agenda, beginning with the Uruguay Round and then discussing the difficulties associated with the technically ongoing Doha Round. As a result of mercantilist agendas preventing successful trade talk conclusions, anti-competitive market distortions have been allowed to proliferate. Privatization has increased post 1990, but competition agencies have failed to adequately prevent distortions, unfairly skewing the playing field for domestic businesses.
However, because nationwide reform faces a number of difficulties — such as countering “crony capitalism” — which make success practically impossible, Mr. Singham advocates for the creation of “enterprise cities” in key areas. These “e-cities” would model existing growth engines, such as Hong Kong, Singapore, London, and Dubai, by removing restrictions to open trade, property rights protection, and merit-based competition. Economic growth and stability are key components of national security, and even partial reform has the potential to make a significant difference. The models on which Mr. Singham’s work is based have shown that only a handful of countries are “not particularly distorted,” and that even small distortion reductions can make a large impact in eliminating severe poverty. The creation of “e-cities” allows us to address both the problems of mass migration and urbanization while simultaneously reducing trade distortions to promote national security and support anti-poverty efforts.
Mr. Singham concluded his presentation by saying that “We are very optimistic about the world, because there is so much gain possible.” While there are very serious problems, and serious consequences to failure, there are still places to go and solutions possible which inspire hope for success.
An extensive question and answer session allowed Mr. Singham to go into further depth concerning multiple aspects of his presentation. Questions addressed cronyism, the potential problem of pensions and competition in the financial service sector, the problem of creative destruction, problems with investor trust issues and how to resolve them, and the question of assuming establishment of rule of law in developing areas.
Mr. Singham serves as the Director of the Competitiveness and Enterprise Development Project at Babson Global, and has a history of extensive experience in international trade law. He is a Non-Governmental advisor to the International Competition Network and a cleared advisor to the United States Trade Representative and Department of Commerce, as well as to several political candidates. He has authored multiple books and papers, among them Enhancing welfare by attacking anticompetitive market distortions and Freeing the Global Market, How to Boost the Economy by Curbing Regulatory Distortions which are related to his IWP presentation.
More of Mr. Singham’s work can be found at www.enterprisecities.com.