Lecture 5 - United Nations University Fisheries Training Programme
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Transcript Lecture 5 - United Nations University Fisheries Training Programme
Fisheries and Economic Development
A Guest Lecture Prepared for the
United Nations University Fisheries Training Program
Reykjavik, Iceland
Gunnar Knapp
Professor of Economics
Institute of Social and Economic Research
Anchorage, Alaska USA
[email protected]
January 2013
IMPORTANT QUESTIONS
• How can developing countries’ fisheries resources be used to
increase the well-being of fishermen, fishing communities, and the
broader society?
• What should governments do—and not do—to promote the
contribution of fisheries to economic development?
• These are difficult questions.
• The answers clearly depend in part on the fisheries and the
countries—they are not the same answers for everyone.
• I can’t answer them! I don’t know enough about:
– Developing countries’ fisheries resources and fisheries
– Developing countries
– The process of economic development
– What strategies have proved effective in actually promoting
development
What I will try to do in this lecture
• Discuss these questions from the broad perspective of how
economists think about the processes and challenges of economic
development.
• Suggest possible answers and strategies for you to consider and
debate
THINK FOR YOURSELVES!
• Listen to what outside “experts” have to say but don’t necessarily
take their advice.
• Outside “experts” don’t necessarily:
– Understand your situation
– Share your objectives
In general . . .
If you want to help people . . .
Give them control over the decisions that affect them
and let them decide for themselves
If you want to help fishermen . . .
Give them control over their fisheries and
let them decide for themselves how to use them.
But . . .
Who represents the people?
Who represents the fishermen?
1. OBSERVATIONS ON THE
GENERAL PROCESS OF
ECONOMIC DEVELOPMENT
What is “economic development”?
• Increase in total value of
– What the country produces
– What citizens earn
– Living standards and well-being
– Broadly distributed and shared (not just elites)
• Accompanied by social and political development
– Literacy
– Education
– Health care
– Rule of law
– Political freedom and participation
Economic development is a process of the entire society
which occurs simultaneously in many dimensions
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Rule of law (personal safety, honest government)
Political stability
Effective government: laws, courts, services
Education and literacy
Public health
Infrastructure: transportation, communication, utilities
Balanced economic growth:
– Professional services (accounting, legal, marketing)
– Repair services (welding, engine maintenance)
– Manufacturing
It is difficult for any specific sector, such as fisheries, to advance
beyond the overall level of economic development of the society
At its core, economic development requires increasing the economic
value of what the country can produce, based on:
• Investment in:
– Physical capital (buildings, machines, boats, etc.) so that each
worker can become more productive
– Infrastructure (transportation, communication, energy) which
further contribute to productivity
– Human capital (education) so that the population is more skilled
• Shifting labor from traditional less productive activities (such as
traditional agriculture) to newer more productive activities (such as
manufacturing and services)
A critical factor in economic development is creating incentives for the
processes to happen naturally—by making people want to do them
voluntarily
• Investment in:
– Physical capital
– Infrastructure
– Human capital
• Shifting labor from traditional less productive activities to newer
more productive activities
Market forces can provide the incentives for these changes—
if but only if governments allow them to and create the conditions for
markets to work!
What needs to happen How markets can provide
for economic
incentives
development
What government needs to
do
Investment in private
capital
Rule of law so that earnings
are not stolen or reduced by
bribes
Reasonable tax rates
Market prices
Opportunities to earn profit
by investing
Investment in public
infrastructure
Investment in the
infrastructure projects which
offer the greatest economic
rate of return for the country
Investment in human
capital
Higher earnings potential
for better educated people
Provide good universal basic
education
Shift in labor to more
productive activities
Higher wages in new
sectors
Not interfere with wage
incentives by subsidizing less
profitable activities
What do you need for successful economic development?
You don’t need
• Resource wealth
• Foreign aid
• Government investment in:
– Development projects
– Commercial enterprises
• Government control of
investment
• Government subsidies
You do need
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Rule of law
Honest government
Personal safety & freedom
Market freedom
Work ethic
Education ethic
Investment ethic
Fair distribution of income
Government investment in:
– Education
– Basic infrastructure
• Reasonable taxes
• Access to world markets
The rest of the world can’t and won’t give you economic development
You must want it and do most of it yourselves
What the rest of the world
can’t give you
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Rule of law
Honest government
Personal safety & freedom
Market freedom
Work ethic
Education ethic
Investment ethic
Fair distribution of income
Reasonable taxes
What the rest of the world
can give you
• Assistance with investment in
education and basic
infrastructure
• Access to world markets
If you look around the world, economic development
has been most successful in countries where:
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Families place a high priority on education for their children
People work hard
People are willing to save and invest
People have personal freedom and safety
Governments are less corrupt
Development is primarily driven by markets rather than government:
– Private rather than government enterprises
– Limited subsidization
• Countries open their markets to trade
One of the most important things
developed countries can do to
promote economic development is
open their markets to products from
developing countries.
2. OBSERVATIONS
SPECIFICALLY RELATED TO
FISHERIES DEVELOPMENT
How can developing countries’ fisheries resources be used to increase the
well-being of fishermen, fishing communities, and the broader society?
What should governments do—and not do—to promote the contribution of
fisheries to economic development?
Stop destructive practices which create
long-term harm to fishery resources
• Destruction of coral reefs
• Destruction of fishery habitat
• Environmental pollution
Stop foreign theft of fishery resources
• Stop foreign fishing in your waters unless there is:
– Monitoring
– Reporting
– Payment in some form
• Enlist international assistance if needed
Define and enforce fishing rights
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Fisheries development requires that societies protect fishery resources
and invest in fishing
Incentives matter! People are more likely to protect fishery resources
and invest in fishing if they know:
– they know they will continue to have the right to fish
– they know others cannot take their fish if catches or prices improve
– they have a voice in the management of the resources
Rights may be defined in many ways (rights to fish, catch shares, etc.)
Rights may potentially be allocated to many kinds of groups:
– To traditional fishermen
– Users of particular types of gear
– Communities
– Enterprises
– Individuals
The rights must be defined, enforced, clear and secure.
Defining and allocating fishing rights is a critical function of government
Invest in infrastructure
• Focus on infrastructure which provides broad general benefit to the
entire fisheries sector (and beyond) and which private businesses
cannot provide:
– Harbors
– Roads
– Transportation to internal and external markets
– Reliable utilities (electricity, water, etc.) needed for processing
and refrigeration
• The most important infrastructure for fisheries development is not
necessarily at the coast
– Transportation infrastructure which allows products to get to
market
Promote conditions which create incentives
for private investment in fisheries
• Don’t give people boats or engines or nets
• Do create conditions which make them want to and able to buy
boats and engines and nets
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Fishing rights: the knowledge that they will have fish to catch
Good management to protect the fishery resources
Access to capital loans
Infrastructure to land and transport their fish
Gain more value from your fish
• Most countries cannot significantly increase their wild fishery
catches
• But they can increase the value from the resources:
– Better handling to improve yields and quality
– Better processing for more valuable products
– Assistance in marketing
– Sale to higher-paying international markets
• International standards for:
– Food safety
– Product quality
– Traceability
– Sustainable fisheries management
• None of this is easy
• Foreign investment can help. It will only happen with:
– Good fisheries management ensuring resource supply
– Favorable investment conditions
– Adequate infrastructure
Facilitate the development or private organizations and public-private
partnerships to advance common goals for the fishing industry
• Marketing organizations
• Market research
• Technical assistance
The greatest economic opportunities for fisheries-related economic
development may be in aquaculture.
• Wild fisheries have limited potential for economic growth
– Long-term growth potential limited by ocean carrying capacity
– High capital costs of offshore fisheries
– Natural fluctuations in stocks
– Uncertainties associated with climate change
• Many developing and medium-income countries have had
significant economic success with aquaculture:
– China, Thailand, Vietnam, Indonesia, etc.
– More apparent “success stories” as potential models
– Feedback loops to local economy (feed production, ponds, etc.)
Things NOT to do
• DON’T encourage more people to engage in fishing for limited
resources
• DON’T or give people boats, engines or other gear that they are not
willing to make substantial investments in themselves
• DON’T provide permanent subsidies
– You can’t build a competitive fishing industry which can be an
engine of economic development through continuing subsidies
– Permanent subsidies lead to permanent dependence
• DON’T limit where people can sell their fish or what products they
can make or where they can sell them
– Markets are usually better than governments at finding the most
valuable ways to use fish