“Can Capitalism Save Poor Countries?”

Featuring Kim Chung Ho of the Korean Center for Free Enterprise:

Not only intolerant and radical “Islamism,” but also military/socialist dictatorship:

New York Times: Egyptians Say Military Discourages an Open Economy

My television interview (with call-ins and emails from China) on Voice of America on January 18, 2011.

Some countries don’t allow it internally; almost no country allows true freedom of movement externally (passports are required). Most people don’t think about it, but the US has essentially required the internal passport over the past few years, as you can now be required to provide identification whenever it is demanded by a state official and in order to get on an airplane or a train you are now required to show, or be prepared to show, a “government-issued ID.” A good book to read to understand the positive benefits and the overuse of identification is Identity Crisis: How Identification is Overused and Misunderstood, by James Harper.

The Central Asian Free Market Institute, based in Bishkek, but active throughout Central Asia, has called for elimination of the propiska, or internal passport and residency permit. (China still has the same system, known as the hukou system, and Chinese libertarians are working to eliminate that, as well. It has been described as “China’s own apartheid system.”)

Text follows: link to English text here.

Elimination of Propiska for freedom of movement in Kyrgyzstan

Central Asian Free Market Institute offers its recommendations on reforming Kyrgyztan’s policy on internal migration. The current article is part of “Kyrgyzstan’s Reform Program” that was prepared by CAFMI. For all questions on this chapter and the reform program please contact the Institute.

VISION: Right of a person to free movement and choice of place of residence within a country is defined not only in natural rights of person, but also in the Constitution of Kyrgyz Republic.

PROBLEM: The registration regime, known as propiska in Kyrgyzstan and other post-Soviet countries, exposes Kyrgyzstan’s population, in particular the poor segment, to myriad difficulties. The propiska was introduced in the USSR in 1932 for the following reasons, “Accounting for population of cities, worker settlements and new buildings and unloading cities from persons not engaged in socially useful labor, as well as removal of kulaks, criminals and other antisocial elements in order to strengthen dictatorship of proletariat”.

Although Kyrgyzstan has been an independent country for 19 years now, the propiska still exists, and the political leadership seems uninterested in revisiting one of the sorest problems facing the country. According to propiska’s requirements a citizen who changed his place of residence, shall, within 10 working days from date of arrival to a new residence register with government authorities. For this purpose, one has to present:

1. passport or equivalent document proving one’s identity;
2. accommodation document, which is the basis for accommodation of a citizen (such as an order, rent contract or a statement of landlord or other document), or a certified copy of the document;
3. reference from chairman of local housing district, confirming place of residence with a street and house number;
4. proof of change of residence, in case of prior disposal of registration;
5. certificate, proving release from prison;
6. for male youth- military card (certificate of registration in draft office) with a note about removal from military account

Losses from propiska are hard to calculate in monetary terms, however, they are high and can be grouped in the following two categories:

I. Visible costs of citizen

1.1. Fiscal losses. Costs from state budget for the administration and enforcement of the propiska. These costs also includes expenses for police conducting raids named “illegal” with the aim of detention of people without a local propiska.

1.2. Individual losses. To change place of propiska one must incur real costs- the cost of a trip to home village / town and back and the time and cost of un-registering and then re-registering. This entire process requires up to six documents and.

II. Invisible costs of a citizen

2.1. Missed opportunities for citizens for a better life by making public services inaccessible without a propiska: legal system, education, health care, opportunities to register a company and to acquire and dispose of real estate.

2.2. Losses from detention:. Each detained person for lack of a local propiska incurred the following types of losses- the loss of time during the detention, the amount of fines or bribes one had to pay in order to be released, and other associated risks, such as beating and harassment.

2.3. Propiska has become a hotbed of corruption, which thrives on the despair of the poorest of the poor. According to research 56% of those arrested, get away with bribes. At the same time, 26% of those arrested, were physically attacked. According to research by Social Research Center at the American University of Central Asia, migrants with lower income are also more likely to have their documents checked and detained.

2.4. Not everyone is ready to pay the expenses to obtain a propiska and those without it experience lower quality of life, social stability and increased illiteracy, thus, pushing them to criminal activities.

SOLUTION

The system of registration like that in Kyrgyzstan is not only outdated but not used anywhere, except in some post-communist and communist states. In countries such as England, France, Germany, Italy, USA and Brazil propiska does not exist. Russia and China do have a propiska but are looking at abolishing it. Georgia, Latvia and Estonia have long ago understood the economic and moral benefits of free movement of citizens and eliminated propiska.

In some countries utility bills are used for confirming people’s residence. In Greece residence is determined by the workplace, while in Italy according to the individual’s own will. In Brazil, the state is interested in the citizens place of residence only at the time of tax collection or at the point of opening of their business. The United States operates an electronic system of registration of citizens, where each citizen has the right to receive information stored on him/her and has the right to correct it.

Kyrgyzstan should not repeat the mistakes of Russia and Belarus, in which registration system was replaced with a bit more simplified registration system but the problems arising from root cause remain intact. It is necessary to follow in the footsteps of developed countries, which remain true to the cause of freedom of movement and abolish propiska.

RESULT

By abolishing the propiska, Kyrgyzstan’s government would ensure:

* => Fulfillment of all international and constitutional norms that call for respect of the rights of citizens to freedom of movement within the country;
* => Labor mobility, which is an essential tool of modern economics;
* => Stopping discrimination of immigrants in regards to private and public services;
* => Maximum integration of citizens across regions;

Save citizens’ time and money that can be directed to other activities that bring concrete value to their living standard.

Author: Central Asian Free Market Institute

From Punch, a leading Nigerian newspaper: “Protectionism at whose expense?,” by Thompson Ayodele and Olusegun Sotola

The full text, translated from French into Arabic, of “What Is Seen and What Is Not Seen” is now available online: “ما يرى وما لا يرى”

The French text is available here (in full facsimile) and here (as html), and the English here.

Congratulations to my colleagues at Minbaralhurriyya.org (The Forum of Liberty), a project of the Atlas Economic Research Foundation. Bastiat is coming out in a lot of other languages, as well, as part of our “Bastiat Legacy” project: AtlasNetwork.org/BastiatLegacy, which includes short videos on themes dear to Bastiat (also translated into numerous languages), essay contest, seminars, summer schools, and more.

آلة الازدهار العظيم from Atlas Network on Vimeo.

Coming out soon in many other languages…..

The conference hall of the Afghanistan Chamber of Commerce and Industry in Kabul for the presentation of the Dari edition of Common Sense Economics: What Everyone Should Know About Wealth and Prosperity
Presentation by me on the foundations of prosperity and peaceful cooperation
Presentation by Prof Nasrullah Stanikzai on the relations between law and economics

The trade embargo against the people of Gaza is itself a crime, and the incompetence and avoidable deadly violence of the Israeli authorities in dealing with the aid flotilla are further arguments that it should be lifted.

Searching for weapons is one thing, but embargoing trade and aid altogether is another. How can the Israeli authorities expect peace from people who, in the end, feel that they have nothing to lose? Free the trade with Gaza and let the people there work, produce, and flourish. Let them trade with Israelis. Search for weapons, but do so with intelligence, not rank incompetence that results in the spilling of blood.

Once again, the Israeli authorities have shown that, when a trap is set, they are quite willing to step into it. A bad policy coupled with utter stupidity and incompetence will prove disastrous for everyone. Perhaps the Israeli authorities may learn something from what happened. I hope so.

There is a great deal of evidence that freeing trade creates or supports peace. The Israeli authorities should consult it.

Dan Griswold on “Peace on Earth? Try Free Trade among Men”

Jagdish Bhagwati on free trade and peace

Some updates:

These articles are well worth reading, to give a sense of what is included in the embargo, which goes far beyond the quite justified interdiction of weapons and war material:

CBS: “Israel’s Gaza Blockade Baffles Both Sides”
Wall Street Journal:Gaza Blockade Hampers Private-Sector Economy

The Opening Segment of John Stossel’s Show on Free Trade

Other segments included trade obstructionist Lou Dobbs, Kenyan entrepreneur, lawyer, and documentary maker June Arunga and Swedish writer Johan Norberg, and a wrap-up (including me).

And see if Lou Dobbs (that old charmer, who managed to call Don Boudreaux an “idiot” and June Arunga “stupid” within minutes of meeting them in the Green Room) convinces you that he is not an economic nationalist and trade obstructionist.

Stossel’s Announcement: “Everyone Prospers With Free Trade”

Stossel’s Column

One of China’s most prestigious and influential magazines, Caijing, today ran my article on free trade: “Weaken Our Trade Barriers: It is not only America’s leaders who are erring, Chinese leaders must also change their trade policies.” It was based on a presentation I made at a seminar on trade policy at the Unirule Institute in Beijing. (Note: Click on the images to enlarge them to readable size.)


At the bottom of the page is a comment, expressing agreement, by Prof. Feng Xingyuan of the China Academy of Social Sciences and the Cathay Institute of Public Affairs.

Note: Careful readers of the Chinese text will note on page 1 references to “Lou Dobbs” and “Jack Cafferty,” two notorious China bashers on “CNN” whom I set straight. And further note: I can’t read Chinese, either. I wish I could.

Moscow Tea Parties! – Protesting the Kremlin’s New Trade Law

The FreedomToTrade.org campaign is organizing a petition to resist calls for “Green Protectionism.” I’ve signed and I encourage others to do so, as well.