Dear Editor,
I refer to the letter ` Dr Khemraj has not responded to my email about his column’ by F Collins in the August 10th edition of Stabroek News.
I wish Mr Collins had posted his comments online under the article. I would have responded within 24 hours. I did receive his email, but read it on my smartphone and forgot to set as unread. When I log into my computer, I would respond to the messages requiring a longer reply. I usually do respond to most people who send emails – except I did not respond to an obviously made up name/address from someone purporting to be from the WPA.
My comment in the column was meant for the case where the market is not the deciding factor, but the government. Yes, if Mr Collins is importing to sell to the private sector, his profit margin will be slim for the reasons he pointed out. There are still some general principles for importing to serve the private sector. You want to sell goods and services with low price elasticity and high income elasticity.
Nevertheless, if one has the political connections, he/she can import things meant for the government sector. One can charge high margins since the market is assured. Part of the margin, of course, goes back to the political party for election funds. Think about pharmaceuticals, heavy fuels, gasoline, fertilizer, heavy machine parts, etc. I am not condoning this kind of endeavour; I am just pointing out how oligarchies operate.
While, Mr Collins is right that the pickings in the private sector are getting more normalized in terms of profits, rent seeking and ethno-plutocratic capture are still profitable ways.
I also raised similar themes in my last column: https://www.stabroeknews.com/2019/sunday/business-page/08/04/the-natural-resource-curse-and-plutocratic-manoeuvres-in-motion/
Yours faithfully,
Dr Tarron Khemraj
