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validation-economy-eehwpsstbm-pro02b | It will not give teachers an incentive to improve their teaching. Teaching is a calling, not something you choose for the money. Teachers are what we call 'intrinsically motivated': they want to realize an ideal, in this case, educating and raising responsible citizens. Recasting this ideal into a financial reward system actually demotivates teachers who feel the inherent value of their work now suddenly has become sullied by chiefly monetary rewards, which is why performances pay hasn’t worked in many places. [1] [1] White, Performance pay for teachers is a terrible idea and here’s why, 2011 |
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validation-economy-eehwpsstbm-pro02a | It will give teachers an incentive to improve their teaching. For decades now, teachers have been remunerated based on 'seniority'. This means that they don't have an incentive anymore to improve themselves, no matter how motivated they were at the beginning. Why try to improve yourself if you have nothing to gain from it? Adding a financial reward for exceptional performance will motivate teachers to do their utmost to develop the knowledge and talents of their pupils. [1] [1] Muralidharan and Sundararaman, “Teacher Incentives in Developing Countries: Experimental Evidence from India”. Podgursky and Springer, “Teacher Performance and Pay” 2007 |
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validation-economy-eehwpsstbm-pro03b | It will not attract more teachers. As said above, teaching is a calling. Many of the expected new teachers will be motivated solely by the increased pay, not by any intrinsic motivation. Because they are not intrinsically motivated, they will underperform. They might leave again after a year, but in that year they will have taught a class without the requisite skills and inspiration, possibly spoiling the educational experience of an entire class for the rest of their lives. |
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validation-economy-eehwpsstbm-pro01a | It is fair to reward teachers on the actual results they achieve. Just as in the private sector, workers should be judged and rewarded on the actual results they achieve. Whether it's through sheer talent or through hard work, some teachers consistently deliver better results than other teachers. Those teachers are more effective and efficient at providing societal value: with the same amount of work-hours they manage to more effectively educate children. It is therefore only just that their pay is differentiated according to the results they achieve. |
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validation-economy-eehwpsstbm-pro01b | It is unfair to reward extra achievements on top of the base level. To provide societal value from education, the base level of performance in education is already set very high. This means that even teachers who perform at base level are already working very hard to provide the societal value we require. Any difference above that already very high level is likely the result of luck and talent, both on the part of students and teachers themselves. Rewarding fortunate individuals for something they themselves didn't create is unjust and can only make other jealous. Moreover, many students may enter the school system- at various stages- accompanied by a range of external advantages and disadvantages. A student’s home environment is a major influence on their ability to achieve when in the school environment. Although a teacher’s pastoral role is growing, there is little that they can do to address poor parenting, or to encourage the engaged, stimulating parenting that produces some of the most able pupils. |
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validation-economy-eehwpsstbm-pro04b | Competition will diminish the quality of education across the board. Teamwork is essential for the effectiveness of schools. Making differences in performance more visible will hamper teamwork because it will create perverse incentives. For instance, teachers who have devised a successful method for teaching a particular subject area will be less likely to share this because sharing it means eroding their 'strategic advantage' in the 'marketplace for teachers'. |
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validation-economy-eehwpsstbm-pro03a | It will attract more teachers eaching salaries for years have remained steady or even declined. This made teaching as a job unattractive and so the influx of new, talented teachers halted. Although the effect of fiscal changes on teachers’ pay has been minimal (controlling for the consequences of the financial crisis), high productivity has become central to many private sector pay schemes. As a result, the contrast between non-responsive pay for teachers and high rewards for talented private sector employees has become more pronounced. With the opportunity to increase income through performance, teacher pay can rise, making it a more attractive profession financially. |
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validation-economy-eehwpsstbm-pro04a | Competition improves the overall quality of education. Measuring teachers' performances will create a transparent market for teaching talent. Underperforming teachers will be selected out because they are less in demand, unless they adapt and learn from what their competitors apparently do better. So, the overall quality of the teacher pool will rise and this will increase the quality of education for all students. |
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validation-economy-eehwpsstbm-con03b | It will not create uncritical 'learning drone' students. Creative and critical thinking begins with the basics: literacy and numeracy. Even learning to the test will result in literate and numerate students who can then move on to much more critical thinking. We can then define successful criteria that measure general critical thinking skills, like have students write essays or pass oral exams. Narrowing of the curriculum is a concern in later stages of education, but the growth of a critical approach to humanities subjects has ensured that rote learning has been de-emphasised in these areas. Critical outcomes, nonetheless, remain measurable. |
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validation-economy-eehwpsstbm-con01b | Teachers are the single biggest influence on student performance. Even though many factors influence student performance, the teacher is still the most important schooling factor. For example, having an effective versus and ineffective teacher has been shown to be equivalent to a class size reduction of 10-13 students [1] and can make the differences of more than a full year’s learning growth. [2] [1] Rivkin et al, “Teachers, Schools and Academic Achievement”, 2005 [2] Hanushek, “The Trade-off between Child Quantity and Quality.” 1992 |
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validation-economy-eehwpsstbm-con02a | Teachers will attempt to cheat the system Cheating is inevitable in any bureaucratic system that holds educational institutions accountable- in any way- for the outcomes of the educational processes that they supervise. Teachers will have an incentive to cheat the system, for example by altering students' test results or giving them easier tests. [1] On a more 'macro' scale, teachers will have an incentive to only want to teach at 'good' schools with 'advantaged' students who have both the will and the ability, because their chances of a good performance there are higher. [1] Jacob and Levitt, “Prevalence and Predictors of Teacher Cheating”, 2003 |
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validation-economy-eehwpsstbm-con04a | It is impossible to implement. Students come from very different backgrounds and have very different skill-sets. This makes the attempt to define a measuring system that covers all cases a bureaucratic nightmare. Even if this succeeds, it is still very difficult to define what a 'good performance' is, because a student's individual performance is determined by many other factors than the teacher and also because an individual student's 'performance' is actually a complex set of attitudes, skills and abilities which are in and of themselves hard to operationalize in a standard test. And even if this succeeds, then the questions is how much of a student's performance is attributable to what specific teacher: oftentimes, at least in high school, students will have many different teachers, making it impossible to gauge what teacher was responsible for what test result. Finally, it should be noted (per the argument included above) that merit based education does not encourage the dissemination and normalisation of best practice. A merit-based pay scheme is likely to collapse when too many of those who work under it meet its criteria for bonus payments, making it too expensive. Once merit based pay becomes part of the structure of an institution, it will become hard to attract and retain staff if it is removed. Concurrently, performance at the same level will be expected by the public, although an institution may not be able to afford it. For the reasons stated above, good ideas are unlikely to be shared by teaching staff under a merit-based status quo, for fear that they may be giving away a competitive edge over their colleagues. It might be better to raise standards in education by investing sustainably in improved training for teachers and improved facilities in schools, rather than creating an unsustainable merit-based reward system. |
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validation-economy-eehwpsstbm-con03a | It will create uncritical 'learning drone' students. Teachers will start 'teaching to the test' to ensure their classes make the grade. Independent, creative, self-reliant thinking will therefore be discouraged as the teacher focuses on getting as high test results for their pupils as they can regardless of whether they really understand the concepts behind what they are doing. If the primary goal of education is to create critical thinking citizens, then merit pay may hinder rather than help achieve that goal. |
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validation-economy-eehwpsstbm-con01a | It is unfair to reward teachers for results they can’t influence The success of a student depends on many factors, like innate talent, the ability for hard work and concentration and socio-economic background. This means that any progress that a student can make is largely outside of a teacher's control. This will result in some teachers being rewarded just because they happen to teach in a good environment to 'advantaged' children whereas other teachers who do a good job in a bad environment to 'disadvantaged' children are just unlucky. |
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validation-economy-eehwpsstbm-con04b | It is possible to implement. Testing students is not that difficult. After all, we have been examining students with all kinds of standardized test ever since formal education began. Similarly, we can know what teacher is involved in what result: the biology-teacher is relevant for biology, not French or arithmetic. The economist Dale Ballou, in his 2001 article “Pay for performance in public and private schools” determined that the prevalence of merit-based pay in private schools demonstrates that it can be cost effectively implemented in complex institutional settings [1] . [1] Ballou, “Pay for performance in public and private schools.” 2012. |
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validation-economy-eehwpsstbm-con02b | Cheating can be prevented by ensuring that the person giving and grading the test is not the same as the person preparing the students for the test. Likewise, the 'macro'-problem can be prevented by designing good measurement systems. If performance is measured as comparing results of individual students across time, then it doesn't matter whether a student comes from a 'disadvantaged' background. The same goes for innate talent: we can design a measurement that rewards any improvement in significantly less talented children sufficiently high to ensure that teachers are motivated in teaching them. |
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validation-economy-ecegthwspc-pro02b | The existence of slums and favelas and their increasing criminality in Latin America cannot be explained by the lack of social subsidies. In fact, quite the opposite is the case: the leftward turn in Latin America with an increase in state subsidies that promised to help poor communities has yet to ease the problems of criminality. Subsidies not only do not help or provide only weak temporary relief, but they are also used to manipulate political opinions and influence the poor particularly around election time. The successful presidential campaigns of Lula da Silva in Brazil, and Hugo Chavez in Venezuela have been run precisely on promises to the poor that for the most part were left unfulfilled. Because government subsidies are not efficient, the large problem of social unrest is not avoided. Furthermore the poor communities in the suburbs of Paris were already receiving state subsidies for housing and education, but this did not keep them from rioting. Therefore subsidies do not guarantee a reduction in crime. |
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validation-economy-ecegthwspc-pro02a | Poor communities create criminality The longer suburbs sectioned off for the economically vulnerable are in existence, the more likely they will turn into real slums, creating long lasting problems such as the ones currently experienced in the cities of Latin America. Latin America contains 13 of the 20 countries with the highest intentional homicide rate (Global Burden of Armed Violence, Geneva Declaration on Armed Violence and Development, 2008). Brazil is one of the most criminalized countries of the world with roughly 23.8 homicides per 100,000 residents, muggings, robberies, kidnappings and gang violence (The Economist, ‘No End of Violence’, 2007). These areas have become a haven for criminals and drug lords, who both have a clear interest in keeping these communities poor so that they can continue to exert their influence on them and use them as a hiding and recruiting ground for illegal activities. Subsidies would help people escape poverty and as a result break the cycle of crime. |
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validation-economy-ecegthwspc-pro03b | This kind of idealism and desire to make the world an equal place has already gotten us into quite a bit of trouble, ruining a large part of the world under the rule of communism. The idea that we could solve all the world’s problems through redistribution of wealth through government subsidies is not only naïve but also dangerous. Being committed to new human rights and wanting to offer help to the poor is not the same thing as imposing subsidies. Indeed, in many countries subsidies for particular activities end up favouring well-off landowners and the urban middle classes. Examples include agricultural subsidies in the EU (Financial Programming and Budget, 2011) and the USA, subsidies for power and water in rural India (Press Trust of India, ‘World Bank asks India to cut ‘unproductive’ farm subsidy’, 2007), and subsidies for water or Higher Education in much of Latin America. In each case the well-off benefit disproportionately, while the poor end up paying via the tax system and through reduced economic growth (Farmgate: the developmental impact of agricultural subsidies, ukfg.org.uk). It would be much better to price these activities at commercial levels and to develop economic policies aimed at growth and job creation. |
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validation-economy-ecegthwspc-pro01a | Subsidies are the most efficient way for a state to redistribute wealth within its borders. Poor communities, often concentrated in rural areas or around large cities, carry a large risk for social instability, whether through epidemic illnesses, crime, drug abuse or political and social revolts. Even the most developed countries find it difficult to deal with these communities without paying proper attention to their development. The suburbs of Paris have recently been in the attention of the press for the violent riots led mainly by poor, unemployed, young men from immigrant families who felt abandoned by their own government (BBC News, ‘Timeline: French Riots’, 2005). France is by no means the only country dealing with such problems, and in order to avoid such high-risk behaviour, the state should be encouraged to create new subsidy schemes that address these communities in particular. For example, employment could be subsidised by paying companies to create new jobs in such deprived areas. |
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validation-economy-ecegthwspc-pro01b | While we do not concede that subsidies are the most efficient means of redistributing wealth even if they are then is this redistribution something we want to see? Poor communities should instead be shown how to pull themselves up rather than having subsidies spoon fed to them. Giving those in poor communities the education and means to better themselves is a much more effective long term solution. Redistribution of wealth through subsidies is simply discouraging the poor from working hard towards the betterment of their lives both because the state is already giving them enough to survive and because they know the state will begin taking what they have earned away if they do manage to work their way up. |
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validation-economy-ecegthwspc-pro04b | Rich communities have a disastrous effect on the environment as well. The question of whether development is possible without manipulating nature and the environment is again entirely separate from the question of subsidies. Ultimately, the problem is one of resources and the best distribution and management of those resources, particularly natural resources. Getting people to understand that forests, water and land are essential resources that need to be preserved is what should be done (Hande, ‘Powering our way out of poverty’, 2009). Subsidies have in fact often created more environmental problems by investing in poorly built infrastructure and housing, and by encouraging people to stay in areas that could otherwise not support them. |
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validation-economy-ecegthwspc-pro03a | Subsidies create a sense of social equality Subsidies help create the equality and non-discrimination that is essential in the new multi-cultural states of today. With more and more people moving across the globe and the clear realization of inequalities in lifestyles, creating this sense of equality is essential. If we are serious about our commitment to universal human rights, including the right to equal survival chances and opportunities, then we need to consider using subsidies to promote these values. Many of the poorest areas have a disproportionate number of immigrants or ethnic minorities, Seine-Saint-Denis for example has the largest percentage of immigrants in France(Wikipedia, ‘Demographics of France’) and is one of the poorest department’s(Astier, ‘French ghettos mobilise for election’, 2007) so these communities are where the state needs to show that it is committed to non-discrimination by helping with subsidies. Without such a commitment to equality, problems like the unrest in the suburbs of Paris, the reaction to the flooding of New Orleans, crimes in the favelas of Rio de Janeiro and South Africa will simply become uncontrollable. |
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validation-economy-ecegthwspc-pro04a | Substandard living conditions have a broad environmental impact Unless we do something about it we risk seeing our planet destroyed. The destruction of forests for coal or agricultural land, the destruction of farmland through illegal buildings lacking proper infrastructure, water pollution, deserting arable land in the countryside in order to move to the city are all serious environmental problems and their effects are long lasting (Hande, ‘Powering our way out of poverty’, 2009). Subsidies need to be used to provide incentives for people to act in ways which will preserve the environment for the benefit of all (Hande, ‘Powering our way out of poverty’, 2009). |
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validation-economy-ecegthwspc-con03b | The change from an agricultural or rural economy to an urban one does not preclude subsidies as a way of lifting people out of poverty it simply means that subsidies have to be more targeted. As most cities continue to grow and attract more and more people from rural areas, the state needs to find a way to address the problem of urban migration, which is closely linked to the formation of poor communities particularly around cities. Illegal immigration also contributes tremendously to this problem, particularly in areas such as the Mexico-California border. Targeted subsidies can slow the pace of migration, by giving those in the countryside and in poorer countries a better standard of living where they already live. |
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validation-economy-ecegthwspc-con01b | Rather than criticising the inefficiencies of current subsides we should put efforts into improving subsidies so they work efficiently. This is clearly a very complex issue and would involve taking each poor community as individual with different needs. One specific example of where this has been efficient is subsidising housing in poor communities, such as the Gautreaux program in Chicago. This project involved the CHA (Chicago Housing Authority) handing out 7,500 housing vouchers out to residents of deprived communities (thus providing a housing subsidy to those residents). The project was widely considered a success and was supported by the government until its completion in 1998. Longitudinal studies suggested that participants where ‘pleased to be living in safer neighbourhoods with quality schools and greater job opportunities’, which all occurred as a result of the Gautreaux project (Fisher, Gautreaux Assisted Housing Program, 2005). This project shows that subsidies can be successful if we look and attend to at the particular needs of each poor communities. |
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validation-economy-ecegthwspc-con02a | The risk of creating dependence Always looking at the state for solutions makes these communities dependent on the government in a world in which the state will continue to gradually lose its power. On an individual level increases in people taking disability benefits over the long term are a good example of dependency, in Australia for example between 1972 and 2004 those receiving the Disability Support Pension rose fivefold well above the increase in the disabled population(Saunders, ‘Disability Poverty and Living Standards’, 2005, p.2). Putting more pressure on increasingly weaker states is probably not the best idea. While strong social-democratic states such as France might be able to handle it, developing countries or unstable states will never be able to withstand these pressures. We need to look for solutions elsewhere, and we need to accept the fact that there might not be one solution for all. Each community, facing different kinds of problems, will have to be addressed differently. The new rise in the field of corporate social responsibility signifies that corporations are looking to take over some of the responsibilities of the state. |
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validation-economy-ecegthwspc-con04a | Communities should be engineered to be self sufficient As the introduction and opposition argument 1 explain, subsidising poor communities involves taking money away from wealthy communities. It is unfair to make the wealthy members of a community pay for the benefit of the poorer members, when the poorer members should be putting in the effort to raise and support their own communities. Those who are wealthy have earned their wealth by working hard. If they wish to be subsidizing poor communities they can give to charities that work in poorer areas. |
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validation-economy-ecegthwspc-con03a | Social change As modern societies are clearly moving away from an agricultural economy to an industrial and post-industrial economy, new demographic challenge arise with high concentrations of people in urban areas where jobs are available. From 2008 more than 50% of the world’s population lives in cities meaning that poverty is now growing faster in urban than rural areas (UNFPA, ‘Urbanization: A Majority in Cities’, 2007). The solution here is not subsidies, but rather the spreading of jobs across the whole economy, including rural areas, and the re-education of those who need to fill these jobs. These are structural problems that every society will need to address, regardless of how many subsidies the state is providing or not. |
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validation-economy-ecegthwspc-con01a | Government supervised redistribution of wealth is inefficient Given that in general state taxation and redistribution systems have been under fire for being inefficient, it is doubtful that subsidies, as a particular form of tax redistribution would be more efficient. Not only is a bureaucratic mechanism for creating and distributing subsidies a nightmare, but the effects of such subsidies have often been questioned as well. Fuels subsidies to keep prices down for example might help the poor to heat their homes but they also encourage wasting fuel and not getting the most efficient heating systems so more fuel is used resulting in more need for subsidies (Jakarta Globe, ‘Subsidies a Costly, Inefficient Crutch’, 2010). The needs of poor communities, such as the immigrant communities in the suburbs of Paris, as often much larger than the state can provide, and patch solutions are often no solution at all. Subsidies will not be able to solve the problems of unemployment and the concentration of the poor and immigrants in particular areas. Other solutions are required for such problems and oftentimes, the involvement of the private sector has proven to be more efficient. Encouraging a more competitive, dynamic economy by reducing the burdens of taxation and regulation is the best way to provide a route out of poverty, especially if improved educational provision and meritocratic hiring policies are also implemented. |
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validation-economy-ecegthwspc-con04b | Telling poor communities they should help themselves is not the answer; they already want to help themselves. Poverty often occurs in a cycle, meaning that for many it is inescapable. Education in poor areas is often worse, leading to people being less qualified for higher paying jobs, stuck in badly paid work, therefore living in undesirable housing that often has inadequate education, and thus the cycle continues for their children. The only way for people to escape this cycle is with government subsidies. Some would argue that forcing people to live in these conditions while others live in wealth is more immoral than asking the wealthy to help the poor. |
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validation-economy-ecegthwspc-con02b | While getting the private sector involved might indeed be a more effective solution, the reality is that many of these poor communities are groups of outsiders. They often discriminated against by the rest of the population, including decision makers from private business. For example in France employers databases often have the abbreviation BBR or NBBR to indicate if someone is white.(SOS Racisme, ‘Discrimination, Présentation’) These communities often find themselves abandoned, and at the mercy of the state. Despite its inefficiencies, the state remains the main organisation capable to reaching out to all different communities, of gathering funds and redistributing them, and of making new investment opportunities in places where the free market would not otherwise have created them. At the risk of some inefficiency, this problem does require solvency, and while ideally things might run otherwise, this is the closest solution to the problem at hand. Governments have also been creative with their subsidies schemes, often getting the private sector involved by providing them with incentives such as tax breaks. |
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validation-economy-epeghwbhst-pro02b | This is exactly what makes HS2 a bad scheme. Yes there is overcrowding but the worst overcrowding is on peak services travelling into London – commuter services – not on long distance trains. It is notable that the operator that is most over capacity is First Great Western which covers a route – to Reading and on to Bristol, South Wales and the West country - which will be unaffected by HS2 which goes north. |
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validation-economy-epeghwbhst-pro02a | More capacity is needed on Britain’s railways Capacity on the railways is a big problem in the UK. Due to growth since privatisation Britain’s railways take as many passengers as it is physically possible to do; more than a fifth of rush hour passengers have to stand. [1] Growth is almost certain to continue as the roads too are at capacity and population continues to rise. The result is more railways are needed. Rail freight meanwhile if forecast to double by the 2040s. The West Coast Main Line is a particular bottleneck for freight with 40% of UK freight services using the line; any increase would have to come at the expense of passenger services. [2] Transferring the main rail services to the high speed line would free up the WCML to increased freight and commuter use so HS2 would not just mean an increase in long distance capacity. [1] BBC News, ‘London-bound train overcrowding: 100,000 have to stand’, 24 July 2013, [2] Department for Transport, ‘The Strategic case for HS2’, gov.uk, October 2013, , p.50, 54 |
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validation-economy-epeghwbhst-pro03b | The UK is densely populated and concentrated in one part of the country so has less need of high speed connections. Other countries having a large number of high speed route miles should not be considered evidence that the UK needs more or that the UK is somehow ‘behind’ as conditions vary between countries. |
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validation-economy-epeghwbhst-pro05a | Faster travel between British cities The most obvious benefit from high speed rail is that journey times will be less. From London the journey to Birmingham will be reduced from 84 to 49 minutes, Leeds from 132 to 82 and Manchester 128 to 68. [1] While faster journeys provide some economic benefit the are as much a social benefit of making more places accessible by allowing individuals to spend less time traveling and more doing what they want to when they get there. [1] Hs2, ‘facts, figures and journey times’, |
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validation-economy-epeghwbhst-pro01a | Bridging the north south divide The UK has a north south divide in terms of wealth and income. London and the South East has for the last few decades done much better than the north; while industry and mining in the north has declined financial services in the south have boomed. The result is inequality between regions. High Speed Two will help to solve this inequality by increasing connections between north and south. The government “suggests that HS2 could provide a boost to the Birmingham city region equivalent to between 2.1% and 4.2% of its GDP. For the Manchester city region the figure is 0.8%-1.7%, for the Leeds city region 1.6%”. [1] This is because businesses will be more likely to invest there when there is better infrastructure, companies based in London in particular will be much more likely to see the benefits of investing in, or partnering with businesses in the north when they can easily reach those cities. [1] Department for Transport, ‘The Strategic case for HS2’, gov.uk, October 2013, p.99 |
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validation-economy-epeghwbhst-pro01b | This makes the strange assumption that Leeds and Manchester, or even Birmingham is the north. In pure geographic terms they are not even half way up the country from London – what about Newcastle and Scotland? The evidence for the possibility of a high speed railway helping to solve regional inequalities is decidedly mixed. Theoretically if one region has comparative advantage then providing it with better transport infrastructure should mean that region simply expanding its market – in this case London would likely have the comparative advantage so increasing inequality. [1] While this has not happened with all high speed links what will happen is that the regional hubs may grow but it will likely be at the expense of surrounding towns that are not connected and areas further away from the line. The government’s own figures estimate the cost to the North East of Scotland would be £220million per year. [2] [1] Puga, Diego, ‘Agglomeration and cross border infrastructure’, European Investment Bank Papers, vol.13, no.2, 2008, pp.102-24, p.117 [2] BBC News, ‘HS2 ‘losers’ revealed as report shows potential impact’, 19 October 2013, |
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validation-economy-epeghwbhst-pro05b | This is not going to be the case with all cities for example journey times to Scotland could be reached for much less. With using tilting trains on the East Coast and upgrading to 140 mph running the journey time from London to Edinburgh would actually be marginally faster than using HS2. [1] The figures for the journey savings notably exclude the possibility of faster journeys on the existing routes so the savings would not be as big. [2] Because Britain’s big cities are not particularly far apart journey times are already not long by comparison to many countries. Trains from London to the second city of Manchester take just over two hours, because of the much longer distance from Paris to France’s second city even with the TGV the journey time is about the same while from Tokyo to Osaka takes 2hours 25 minutes. [1] Webb, Jonathan, ‘East Coast Pendolinos could deliver faster journey times than HS2 for Anglo-Scottish services’, Global Rail News, 2 August 2013, [2] Millward, David, ‘HS2 time savings exaggerated critics say’, The Telegraph, 29 October 2013, |
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validation-economy-epeghwbhst-pro04b | Estimates and guesstimates. We don’t know exactly how much HS2 will benefit the economy and still won’t even if it is built because we will never know how well the alternative spending of the money would have affected the economy. |
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validation-economy-epeghwbhst-pro03a | Britain is behind the rest of Europe on high speed rail The United Kingdom has been somewhat of a laggard when it comes to high speed rail. In the first half of the century Britain’s railways were the fastest in the world (still holding the world speed record for steam). But since what we would now consider to be high speed started with the launch of the Shinkansen in 1964 the UK has only marginally upgraded its own railways to 125mph. This means the only high speed line the UK has is the link to the channel tunnel which does not serve a large number of internal passengers. The UK therefore has 113km of high speed rail against 1334 in Germany, 1342 in Italy, 2036 in France and 3100 in Spain. Even much smaller countries such as the Netherlands and Belgium have longer high speed lines. [1] [1] |
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validation-economy-epeghwbhst-pro04a | HS2 would benefit Britain’s economy Big infrastructure projects often provide a big boost to the economy. HS2 will do this in two ways; the first will be in the economic activity created in building the line and the estimated 3100 jobs staffing the railway. Much more important however are the wider economic benefits. On a cost-benefit basis HS2 is considered to be ‘high value for money’ because it will have a 1:2.3 cost:benefit ratio. This ration however could be considerably better if ridership keeps increasing for longer or faster than expected. The overall benefit to the economy is estimated at £53 billion. [1] [1] Department for Transport, ‘The Strategic case for HS2’, gov.uk, October 2013, , p.31 |
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validation-economy-epeghwbhst-con03b | The spending for HS2 would not contribute to the deficit as it is investment that will pay back the money over time and will also be creating assets that can in extremis be sold. The high cost by comparison to other high speed networks is almost entirely due to high land prices; this means that any big transport project is going to cost a similar premium. |
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validation-economy-epeghwbhst-con01b | Some of these costs have already been included in the cost:benefit ratio such as the impact of pollution and greenhouse gases. Moreover there have already been changes made to ensure that the high speed line runs in tunnels through areas where the damage would otherwise be significant. More than 50% of the route to Birmingham will be in tunnels or cuttings and much of the remainder will have barriers to prevent noise pollution. [1] Given the number of tunnels it is wrong to consider the railway one long barrier to wildlife. If it is considered a serious problem then solutions would not be immensely costly – tunnels under the tracks could be constructed for example. [1] Railway-technology.com, ‘High Speed 2 (HS2) Railway, United Kingdom’, |
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validation-economy-epeghwbhst-con02a | There are other options There are plenty of other options that don’t have the disadvantages of HS2 (high cost, environmental impacts etc.) but do meet most of the requirements like increased capacity. First because it is capacity on main commuter lines that is mostly needed it makes more sense to lengthen platforms and trains, and if that is not enough raise bridges to allow double deckers on the busiest routes. The government rejected such an option in 2007 due to the cheapest option costing £2.4billion, which seems cheap compared to HS2. [1] Similarly if the capacity problem is for freight as a chunk of the business case is then reopening the Great Central Railway could be the answer – most of the track bed still exists. It has been proposed as a useful freight corridor that would help take the load off the West Coast. [2] Finally terms of faster journey times as already noted there is little need for more speed in the UK but even without HS2 journey times will improve as East Coast and Great Western are to be upgraded to 140mph. And in terms of capacity on intercity rail the better option has been suggested as being lengthening trains and reducing first class – which has been estimated as having a benefit of £6.06 for every pound invested, 2.5times that of HS2. [3] [1] Millward, David, ‘Britons squash plans for double-decker trains’, The Telegraph, 16 September 2007, [2] ‘Great Central is the way to go’, [3] Doward, Jamie, ‘HS2 not the best value rail option, says government report’, 14 January 2012, |
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validation-economy-epeghwbhst-con05a | Does not easily connect to the continent Would it not be nice to be able to travel from Edinburgh straight through to Paris without having to stop in London? This was part of the initial dream of the Channel Tunnel with proposals for regional Eurostar services. [1] Unfortunately HS2 will not provide this option. There is a proposed link but it is currently single track and unlikely to be enough even to meet demand for domestic services running around London let alone international services from Birmingham and Manchester. [2] The much more sensible option of not having a terminal station, or at least some through platforms, has been ignored. [1] BBC News, ‘Regions ‘cheated’ over Eurostar’, 27 January 1999, [2] Railnews, ‘Rethink urged over 'absurd' HS2-HS1 link’, 1 June 2013, |
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validation-economy-epeghwbhst-con04a | High speed rail never makes a profit The UK already knows that it is difficult to make rail services pay their way, currently fares from passengers despite regular criticism of them being too high, only cover 65% of operating costs. [1] High speed rail is no different in this regard; most of China’s high speed lines make a loss [2] indeed the only lines to have made a profit are Tokyo-Osaka and Paris Lyon. [3] [1] ‘Rail ridership hits new highs as will regulated rail fares from January 2014’, Rail.co.uk, 19 August 2013, [2] Wan, Zhang, ‘High Speed Train Too Expensive’, Chienglish.com, 1 April 2013, [3] Feigenbaum, Baruch, ‘High-Speed Rail in Europe and Asia: Lessons for the United States’, Reason Foundation, 2013, |
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validation-economy-epeghwbhst-con03a | HS2 is too costly HS2 is already looking very costly. California’s San Francisco to Los Angeles High Speed rail is 520 miles at a cost of $68billion (£42bln), [1] HS2 will only be 33miles but is already expected to cost about the same £42.6billion. [2] The cost has already grown and there are regular claims even by respected economics analysts such as the Institute of Economic Affairs that it will eventually rise to £80 billion. [3] Britain is only just recovering from a long recession and does not yet have its deficit under control, can it really afford such an immense cost? The money could be spent on a great many other things, not just upgrades to the existing network but schools and hospitals too. [1] AP, ‘No One Knows Where The Money Will Come From For California's $68 Billion High Speed Rail Plan’, Business Insider, 3 April 2012, [2] Hs2, ‘Route, Trains & Cost’, [3] Leftly, Mark, ‘The wrong side of the tracks: Lobbyists for HS2 rail line funded by the taxpayer’, The Independent, 25 August 2013, |
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validation-economy-epeghwbhst-con05b | This is not a particularly big problem for the project and could easily be fixed by doubling the track later if there proves to be sufficient demand to justify it. |
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validation-economy-epeghwbhst-con01a | HS2 would damage the England’s green and pleasant land Railways are supposed to be green – they produce less greenhouse gas emissions than cars or planes. Yet many of those benefits are sacrificed by the desire for high speed which makes these trains much less environmentally friendly than normal trains due to the extra power necessary to reach such speeds. The impact on the British countryside will be immense. The railway will run through four Wildlife Trust reserves, 10 Sites of Special Scientific Interest (SSSIs), more than 50 ancient woodlands, and HS2 will run through 13 miles of the Chilterns Area of Outstanding Natural Beauty. The result will be the fragmentation of populations of insects, bats, birds and mammals. The Wildlife Trusts argue “The very last thing we should be doing is creating new linear barriers to the movement of wildlife.” [1] [1] The Wildlife Trusts, ‘HS2’, |
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validation-economy-epeghwbhst-con04b | We should not just be considering fares as the be all and end all. Successful rail companies elsewhere don’t tend to make a profit on ticket sales but instead through diversification. Tokyu, one of Japan’s private railways, has revenue of $2.63 billion and profits of $587millio but only a third of the revenue comes from rail fares with real estate bringing in about the same amount and much of the rest from retail. [1] Franchises make this difficult to operate in the UK but HS2 might have tracks/land/stations and operating trains integrated so providing an opportunity. Moreover it is wrong to suggest that only a couple of lines have made a profit as this is only a couple of lines have made a profit including the immense construction cost on the loss side of the balance sheet. Most high speed lines at least break even without subsidies after a few years of operation, as has been the case in Taiwan [2] – which is better than Britain’s other railways. [1] Jaffe, Eric, ‘The Secret to Tokyo’s Rail Success’, The Atlantic, 18 May 2012, [2] |
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validation-economy-epeghwbhst-con02b | None of the alternatives is a comprehensive solution and particularly not to the capacity problem. What happens once the double decker trains are at capacity? Then you are back to thinking of building new lines. Upgrading existing lines would require 14 years of weekend closures to allow the needed capacity increases. This would be “a patch and mend job that would cause 14 years of gridlock, hellish journeys and rail replacement buses. The three main routes to the north would be crippled and the economy would be damaged.” [1] The difference between HS1 and the upgrade to the West Coast Main Line should also be mentioned. HS1 was a stand alone line that was on time and on budget, [2] WCML on the other hand was £6 billion over budget, four years late and caused immense amounts of disruption to passengers, what’s worse is the proposed upgrade part of the plan to make the line 140mph capable was abandoned. [3] [1] Syal, Rajeev, ‘HS2 alternatives could require 14 years of weekend rail closures’, The Guardian, 28 October 2013, [2] Major Projects Association, ‘Delivering High Speed 1: the successes and the lessons’, 7 February 2008, p.4 [3] All Party Group for Excellence in the Built Environment, ‘A Better Deal For Public Building’, cic.org.uk, September 2012, , p.24 |
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validation-economy-beghwarirgg-pro02b | Grey imports limit a company's control over its own products. Many manufacturers/distributors wish to control their distribution outlets for sound commercial reasons, for example, to protect the image of their brand. This becomes very difficult, possibly impossible, to do if grey imports are allowed, as this circumvents their planned distribution network. It becomes much harder for a manufacturer/ distributor to track their products where they have been used in a grey importation. This can lessen their effectiveness when they need this information, such as for a safety recall. "It is unclear whether adequate mechanisms are in place to adequately recall parallel trade medicines. Batch number recording is not consistently applied throughout the supply chain and in practice may make comprehensive product recall difficult, creating a risk to patient safety". 1 1 Trade and Industry Committee, Eighth Report, 29 June 1999 |
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validation-economy-beghwarirgg-pro02a | Allowing grey goods breaks down monopolies and passes on lower prices to consumers. Allowing grey imports means that manufacturers do not concentrate economic power in a monopolistic way which can be damaging to free trade (even Adam Smith1believed certain monopolies were antithetical to free trade). Banning them is tantamount to granting a licensed monopoly or cartel on a country-by-country basis, which inevitably means higher prices for consumers. As manufacturing has increasingly been relocated into a smaller number of offshore countries, rather than in the country of purchase, it makes sense that other parts of the supply chain should make a similar move so that they too can realise the efficiency benefits of a globalised economy. 1 Smith, Adam, "An Inquiry into the Nature and Causes of the Wealth of Nations" 1776 |
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validation-economy-beghwarirgg-pro03b | It may be impossible to completely stop such imports however the vast majority of shops will not import these items while they are not allowed to. Opening the market up will simply lead to a flood of imports with a resulting effect on native manufacturing. |
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validation-economy-beghwarirgg-pro01a | Buyers benefit from grey imports, in the form of greater consumer choice. Consumers benefit from grey imports. The economics of grey importation drives sourcing to low-cost economies. Even if retailers take some of this benefit as improved profit margins, typically at least some of it will be passed on to consumers in the form of reduced prices. Grey imports also allow consumers to buy products that may not yet be available in their own market, because they have not yet been released, or because in their market the manufacturer feels there is insufficient demand. Thus, grey imports expand consumer choice. Many films, DVD's and video games are released in one region months before others, and grey imports allow enthusiasts to access their favoured products earlier than they otherwise would1. 1 Bun, Mara and Horrocks, Steve, 'In Support of Parallel Imports of CDs', Australian Consumers' Association, February 1998 |
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validation-economy-beghwarirgg-pro01b | Consumers do not really benefit overall from grey imports. Although manufacturers may reduce prices in some (typically, richer) countries, they are at least as likely to raise prices in less developed economies, depriving consumers there of access to international brands and luxury goods, and so depriving them of a real choice and in some cases the full product.1 In addition, they will still have to pay all the taxes and the losses from lack of regulation which have been avoided in some way or lose the services those taxes provide. The loss of revenue from grey imports can mean that production is limited or even halted going forward, even though there is market demand for more products from the manufacturer. The film industry shows this clearly. Manufacturer protections of their products (for example region specific DVD's and PCs) actually increase costs for all consumers. 1 Etherington-Smith, James, '"Grey" imports: The black and white of it', mybroadband.co.za, 14 December 2010 |
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validation-economy-beghwarirgg-pro04b | Free trade involves a principle of free will. The buyer should be able to decide to whom he wishes to sell and on what terms, and if the seller does not accept those terms then the buyer should be able to refuse to deal with him. Manufacturers can have many good reasons for choosing to price goods at different levels in different countries, such as their wish to build a long-term brand preference by cheaper initial marketing in a developing economy, or their desire to maintain an aura of exclusivity in mature markets through high pricing and confining sales to specialist retailers. Grey imports result in the manufacturer/ distributor effectively losing some, and often most, control of their pricing and retailing strategy in the importing country. This reduces their capacity to position the brand as they see appropriate. In extremis, a company can be put out of business in one nation by its own operations overseas! |
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validation-economy-beghwarirgg-pro03a | Impossible to Stop. Governments might as well accept that allowing retailers to sell grey goods has benefits because government will never be able to completely prevent such imports. Government regulation may prevent most retailers from selling grey goods but it won't stop all. For example Tesco in the UK sold cut price Levi jeans for years, and fought Levi Strauss in the courts for four years to try and keep selling them.1 If even the biggest retailers are willing to sell grey goods unless stopped by the courts many smaller ones will be getting through the net. Moreover consumers will simply buy the goods elsewhere, particularly online. The government should instead legalise the import of grey goods so that it can make sure that these imports are of a high standard and do not break any other standards 1 BBC News, 'Tesco defeated in cheap jeans battle', 31 July 2002, |
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validation-economy-beghwarirgg-pro04a | The free movement of goods is consistent with the basic principles of free trade Allowing grey imports is consistent with the basic principles of free trade. (Free trade principles – WTO1) If a manufacturer/distributor is selling the same item at different prices in two countries, free market economics suggests that the rational purchaser will purchase in the cheaper of the two, presuming, for example, that the difference will not be wholly swallowed up by transaction and transportation costs or taxes. If this logic holds for a consumer choosing between two jeans shops in his town, it must also hold for a retailer choosing between a jeans manufacturer’s price lists in two countries. Until recently, there was an information asymmetry (rational markets requiring information symmetry), as the manufacturer knew about their differential pricing, but the purchaser did not; information technology has now changed the equation and allowed the market to operate more efficiently. Not only this, but consumers can already buy products from pretty much anywhere in the world, as long as they can pay the postage. 1 World Trade Organisation "UNDERSTANDING THE WTO: BASICS", WTO 2011 |
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validation-economy-beghwarirgg-con03b | A free flow in goods is a desirable end in itself. The rational, efficient supply chain of grey imports reflects the ideal of the free market. Moving it from the shadows to a position of legitimacy would make it even more efficient, by reducing the effort currently employed to keep the imports' trail hidden, etc. There is also job creation involved in the distribution network. For example, the logistics and transportation activities involved in grey imports will create new work as the trade grows. |
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validation-economy-beghwarirgg-con01b | Grey imports benefit the importing economy. As some grey imports will be products originally targeted at a foreign market but which turn out to achieve some popularity in the host market, they increase foreign trade. In this way, grey imports act to internationalise consumer tastes and cross-cultural understanding. Through the downward pressure on retail prices, grey imports will also encourage industry to more efficiency, as ultimately factory gate prices will be expected to fall too. This leads to rising living standards in the cheaper economy as prices balance out, as we can see in for example China, with it's recent massive rises in living standards.1 1 Mortishead, Carl, ‘China’s rising living standard cranks up resource competition’ The Australian, 18 October 2007 |
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validation-economy-beghwarirgg-con02a | Once a good has been sold, manufacturers have no business telling their customers how to use it. This includes selling that good on. In general we do not accept as moral or socially permissible the idea that the makers of a good can tell their customers where and when they may use that good, who they may give it to, where and when. Car manufacturers do not sell cars on the basis you will only drive to the shops and back, clothes makers do not sell clothes on the basis you will only wear them on Sundays or every full moon. Limiting customer ability to resell items they have paid for in full is irrational and immoral. |
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validation-economy-beghwarirgg-con03a | Grey imports limit a company's control over its own products. A free flow of goods is not always an automatic good. The extra transport and pollution involved in grey imports alone is a serious argument against it. Grey importers often do not make clear that products sold under the same brand name in different markets are in fact sometimes tailored to suit the local market environment. So, for example, one of the reasons for lower pricing in some products in particular countries is that they do not include all of the same ingredients as a product sold under the same brand name in another country. This can be, for example, because the performance needs (e.g. the climate), regulatory framework, or consumers' willingness to pay in the two countries vary. Accordingly, in the importing country, consumers may end up paying for a familiar brand that is not actually as well designed for their needs as the domestically marketed version. 1 There are many practical problems with grey importation. For example, consumers may not understand usage instructions. 1 Santos, Botchi, 'Why locally sold cars are still better than grey-market options, 26 January 2010 |
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validation-economy-beghwarirgg-con01a | Grey goods come into the country, but money goes out, weakening the economy. Grey imports damage the importing economy. By reducing the profitability of the manufacturer/distributor in the importing country, grey imports accordingly often lessen the amount of money that the company can invest in its operations in that country. This is a vicious circle which may reduce demand and so lead to greater inefficiencies in official importation. An acceptance of imports – especially of unclear provenance – hastens the demise of the manufacturing base of the importing country.1 The manufacturer will have less reason to support the brand locally through, for example, advertising, as the benefit does not show up in their local results and, in any case, grey imports tends to start focusing consumers’ minds on price rather than the brand identity. This can be detrimental to the advertising and media spend in the importing country, which for a premium consumer goods brand (e.g. perfume, clothing) could represent quite a significant economic benefit. What is a loss for the economy is also of course a loss for the government. The United States Internal Revenue Service estimated 15% of workers did not pay taxes, a $345billion shortfall from what should have been paid in large part as a result of workers in the grey economy of which there are more than 140,000 in San Diego alone.2 1 Peacock, Louisa, 2010, ‘Go East, if you want that top job’, The Telegraph, 19 November 2010 , 2 Calbreath , Dean, ‘Hidden economy a hidden danger’, Signs On San Diego, 30 May 2010 |
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validation-economy-beghwarirgg-con02b | While we do not see limitations on reselling by customers in general, there are, in fact, a good few occasions where such limitations on reselling and use occur. Books and other media are limited through copyright laws in their ability to be legitimately re-sold, motor insurance is indeed sold at least partly on the basis of what you are going to do with your vehicle. |
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validation-economy-tiacphbtt-pro02b | We need to be critical of the cumulative potential of the tax model proposed. Firstly, the theory of the state’s capacity and how it functions in practice differ substantially. The idea of taxation acting to enhance the productive capacity of a nation is based on assumptions that the institutions, human resources, and state-capacity, are already present. This is not always the case in Africa. Corruption and bad governance are prevalent. Reforms in 1996 to curb corruption in the TRA were reversed due to misunderstanding the nature of corruption amongst tax officials and administration (Fjelstad, 2003). Tax-revenue performance remains comparatively low [1] , there is little reason to simply altering what taxes there are will change this. Finally, alternative methods can be used to assist rural infrastructure projects, and enable national savings. For example, revising the role of agricultural marketing boards [2] . [1] See further readings: Gray and Kahn, 2010. [2] See further readings: Baffes, 2005. |
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validation-economy-tiacphbtt-pro02a | Building productive capacity through increasing revenue Between 2003-2009 the annual growth rate of mobile cellular subscriptions in Tanzania was 44.21%, higher than the average in Africa (Ondiege, 2010). Estimations suggest around 18bn Tsh [1] will be collected a month through the SIM card tax model (Rweyemamu, 2013). In 2012, Tanzania’s total GDP was calculated at ~45tr Tsh [2] - the tax could therefore provide almost 0.5% of GDP in taxes. Such a boost in government taxation will enable projects such as improving rural infrastructure (including potentially mobile phone coverage!) or help reduce the deficit. That one tax can raise so much shows the potential of this kind of taxation. [1] Equates to ~11.2mn USD (January 2013). [2] Calculated based on World Bank Data (2013) and exchange rate as per January 2013. |
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validation-economy-tiacphbtt-pro03b | The SIM card taxation is an inequitable model for Tanzania’s poor. The tax fee proposed will have detrimental effects to low-income users, whereby the cost exceeds the amount of money they spend on their mobile. For example considering the cost of tax, living, and mobile phone usage, the poor may be placed in a vulnerable position. Evidence suggests 8 million out of 22 million SIM card owners will be affected - with the rural poor feeling the greatest economic burden [1] . The burden of taxation may simply mean the poor can’t afford a phone. Taxation cannot be promoted without recognising the constraints on household savings and income. Universal benefits are debatable when the initial disposable income is polarised to start - the price tag is not-so-small for some. [1] See further readings: BBC, 2013; Luhwago, 2013. |
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validation-economy-tiacphbtt-pro01a | The importance of mobilising domestic resources In order to sustain development and growth nations need to build domestic resource mobilisation capacities - through collecting tax and savings. Domestic resource mobilisation enables the transition into a capitalist mode of production - poverty can be targeted and sufficient economies built. Social and economic facilities can be provided. To meet the Millennium Development Goals (MDGs) and enhance performance capacity African nation-states need to improve the amount of funding they raise through taxes [1] . In order for development to be assisted, international donors and intervention needs to focus on encouraging innovative models of taxation such as taxing mobile phones. Such taxes don’t have the track record of failure other taxes have providing a new opportunity to redesign the taxation system. Initiatives such as the mobile phone tax provide a trial for such a new model helping to gain support for future changes. [1] See: UNCTAD, 2007. |
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validation-economy-tiacphbtt-pro01b | Taxation remains a vital component of domestic resource mobilisation however focus needs to be placed on improving Tanzania’s top revenue sources before innovative new models. Although the performance of tax collection has improved - with tax revenues rising by a rate of 15.7% between 1996/97 and 2007/08 (AfDB, 2011) taxation does not reach many areas that could be taxed; despite increasing exports of minerals and natural resources, |
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validation-economy-tiacphbtt-pro03a | A fair tax The model is for rolling out a tax for all, on a commodity used by all. The cost is small and fair, only applying to individuals who are able to afford to buy and use a working mobile phone. Those who can afford multiple phones will be hit harder so this is a progressive tax. Arguments suggesting the tax cost is unreasonable fails to look at the politics constructing such a discourse and manipulating what collected tax can do. Motivations for opposition are not necessarily emerging out of concern for individuals’ well-being, but rather have alternative motives. The MOAT (Mobile Operators Association of Tanzania) oppose the tax fearing profit margins may decline; and politicians may use fear over the new tax policy to gain political support for oppositional parties. The opposition of the operators however merely reaffirms that it is a fair tax and those who would support opposition to the measure can be won round through explaining this. |
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validation-economy-tiacphbtt-con03b | The SIM card tax is actually under-ambitious for potential change to be maximised. Nevertheless, the tax initiates a step in the right direction. Firstly, it will ensure reductions are made in tax avoidance. Secondly, the model shows the potential role the private-sector can play in tax collection. Decentralisation, and shifting responsibility, to independent providers means valuable resources can be collected outside of the criticised TRA structure. For example, the Association of Tanzania Employers may be granted greater involvement in enhancing corporate tax collection. Estimations suggest corporate tax exemptions resulted in annual revenue losses of 4% between 2011-2012 (Gaddis, 2013). The SIM card tax indicates domestic resources can be mobilised by engaging in public-private partnerships. For progressive tax systems, Tanzania needs to utilise private actors. |
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validation-economy-tiacphbtt-con01b | With mobile phones now a crucial commodity for everyday life, the digital revolution will not be stopped by the SIM card tax. The initial reaction to the tax may result in a temporary decline in new subscriptions and SIM card set-up, however, in the long-run subscriptions will continue to rise. Many people are willing to spend large amounts on a new phone; the addition of a tax will not deter them. |
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validation-economy-tiacphbtt-con02a | Taxes cannot be justified while the network is poor Can taxation be justified when the network remains poor, limited, and temperamental in numerous locations? Network coverage in Tanzania is 2G and geographically concentrated (see MDI, 2013). It must be improved before the government begins to use it as a tax resource. Tanzania’s Right to Information Act recognises that government transparency and public information is a right. Therefore increasing costs on how people access information, and failing to provide good service, neglects individual rights. A right to information is not just a right to information for those who can afford the tax. |
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validation-economy-tiacphbtt-con03a | Quick-fix policies: a failing model of implementation Tax evasion remains a key concern across Tanzania. There remains a low tax base and high evasion. Imposing a quick-fix solution by taxing mobile phones fails to solve underlying issues. The model is widening the base of taxation, whilst neglecting the issue of tax evasion. Therefore, to what extent will the model provide future benefits? Domestic resource policies need to ensure the taxation enables state-building and future capacities to impose tax more effectively and equally. The model relied on MOAT to collect taxes monthly, reducing the need for the TRA to construct a functioning tax-collection system or resolve social resistance to taxation. This then is effectively privatising a vital state function. |
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validation-economy-tiacphbtt-con01a | Halting the technological revolution The tax creates disincentives when we consider the potential losses that will result in the technology sector. The technological revolution in Tanzania will be jeopardised. The growth of mobile phones across Tanzania indicates the emergence of a ‘network society [1] ’ but if the population stops buying mobile phones this will end. Taxing SIM cards may deter individuals from buying mobile devices, due to the additional cost. Further, alternatively if the manufacturers and providers attempt to take the burden of the tax to keep the price of a mobile down then supply will be affected. Currently individuals use multiple service providers to get cheaper phone call rates; however, this would no longer be a sensible option. Taxing SIM cards will introduce costs to the entrepreneurship and service provision operating through mobiles. Technology holds great benefits within the twenty-first century; imposing taxation acts to exclude access and limit potential job opportunities. Mobiles have taken services to the people [2] - a vital resource for health services and information, aid distribution, banking, and commerce. [1] See further readings: Castells, 2011. [2] See Ondiege, 2010 on mobile banking. In Tanzania, where for every 100,000 people there is one bank, mobiles have enabled banking to penetrate across society. |
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validation-economy-tiacphbtt-con02b | The SIM card tax will provide positive knock-on effects for network expansion and improvement. By enforcing tax payment to individual users, mobile phone customers are able to demand better service quality and distribution. The public-sector have the obligation and responsibility to ensure tax can be justified so will encourage the development of the network – and if necessary use some of the taxes raised to pay for it. |
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validation-international-ehwlavpiems-pro02b | Even though this point correctly presents a theoretical possibility, the reality is different. Europe has since come up with an alternative solution that means the need for unanimity does not always mean decision-making can be slowed by a spoiler; the opt-out. Countries can negotiate to opt out of further integration on areas where they believe their national interests are threatened. This then allows all the other states to carry on with integration without risking a veto from the states that do not wish to follow that path. What further corroborates this point is that since Luxembourg accord, nothing similar has ever occurred, and even the compromise allowing for invoking national interests to halt QMV is no longer used. Thus it is irrational to fear “empty chairs” now, when all the states are aware of the possibility of a stalemate, and would, perhaps, never wanted to be held accountable for such situation. |
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validation-international-ehwlavpiems-pro02a | Unanimity requirement gives an enormous bargaining leverage to the hands of individual states Unanimous voting provides states seeking additional gains with a tool to actually achieve their egoistic goals. In order for the whole Union to pass legislation that would be beneficial to all, a single state has power to negotiate further benefits for itself, thus holding up a deal and sometimes making it less beneficial for others. Similar concerns were expressed in the EU Commission White Paper on European Governance as consensus requirement “often holds policy-making hostage to national interest”. [1] What is more, such behavior sets dangerous precedents that nations can put national interests in front of communal, effectively deteriorating the cooperative spirit of the EU and eventually destroying it altogether. As Sieberson claims [2] , such was the case of French objections to the Treaty of Rome regarding the wider use of qualified majority voting in the fields of agriculture and the internal market. In the ‘empty chair crisis’ France boycotted Council meetings for seven months, until the deal called Luxembourg accord [3] was struck. “The Luxembourg accord is widely believed to have created a period of stagnation in the Community… Paul Craig describes this period as “the prime example of negative intergovernmentalism.” [4] It prevented consolidation of Europe and ensured the EC remained intergovernmental by effectively curtailing qualified majority voting as any state could veto by invoking national interests. [1] European Governance, A White Paper 2001, Commission of the European Communities, pp. 29, viewed 29 September 2013, < . [2] Sieberson, SC 2010, ‘Inching Toward EU Supranationalism? Qualified Majority Voting and Unanimity Under the Treaty of Lisbon’, Virginia Journal of International Law, vol. 50, no. 4, pp. 934, viewed 29 September 2013, < . [3] Eurofond 2007, Luxembourg Compromise, viewed 29 September 2013, < . [4] Sieberson, SC 2010, ‘Inching Toward EU Supranationalism? Qualified Majority Voting and Unanimity Under the Treaty of Lisbon’, Virginia Journal of International Law, vol. 50, no. 4, pp. 934, viewed 29 September 2013, < . |
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validation-international-ehwlavpiems-pro03b | This argument is based on the premise that federalization is a great idea. But, is it? It is hard to assess the extent to which federalization of the EU help make it a better union. What is clear, however, is that there are a whole load of questions to be answered before a federal union is attempted. As Cocodia [1] concludes “…if it must be, [it] ought to be a very slow and cautious project which should not be embarked upon unless issues such as group relations, societal culture/language and trust have been properly addressed.” These group relations and trust require that individual members concerns not be ignored. A sustainable federal union would be able to coexist with a veto because it would mean interests are close enough together that it would almost never be used. [1] Cocodia, J 2010, ‘Problems of Integration in a Federal Europe’, Crossroads, vol. 9, no. 1, pp. 57-81, viewed 1 October 2013, < . |
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validation-international-ehwlavpiems-pro01a | The requirement for unanimity is undemocratic European Union has been based on principles of solidarity and mutual help. This means that sometimes, in order to ensure the ‘greater good’, one has to forgo a bit of his own self-interest. Because European Union holds together 28 culturally and economically different countries, qualified majority voting is sufficient to ensure that no state will be harmed by the decisions made on the international level. The fact that some states would like to retain their right of veto undermines the basic principles of the EU because no such process, where a single state is able to prevent majority from adopting a measure can be called democratic. It this system the minority, or individual state, can ignore the will of the majority indefinitely. Moreover, Zamora (in Sieberson, 2010) [1] states that “international agreement is impossible to obtain when any single participant can block a decision; to achieve unanimous consent… a decision must be diluted so as to please everyone,” concluding that such result is unsatisfactory and prohibits effective functioning of an international organization, mainly in regards to urgent, practical problems. [1] Sieberson, SC 2010, ‘Inching Toward EU Supranationalism? Qualified Majority Voting and Unanimity Under the Treaty of Lisbon’, Virginia Journal of International Law, vol. 50, no. 4, pp. 932, viewed 29 September 2013, < . |
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validation-international-ehwlavpiems-pro01b | This is not completely true. The EU’s very economically successful pre-crisis state suggests that many of the decisions adopted by the EU are not “diluted to the point of being ineffective” and that in fact, EU works quite well. Although there are stark differences between individual member states they are able to overcome them and work meaningfully as a collective when progress is necessary. States are willing to sacrifice their interests in some areas if they get something in return elsewhere, or believe they will in the future. Therefore even if we accept the assertion that unanimous requirement is undemocratic, in a society with knowledgeable individuals, the veto is only used as a last resort. Thus what happens is that the allegedly "undemocratic" process functions as well as democratic process, but on top has an additional check or balance to prevent anything that is found particularly egregious to pass. |
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validation-international-ehwlavpiems-pro03a | Disposing of unanimity requirement would make it easier advance the long-needed federalization of the European Union With Greece as a trigger, the Eurozone and the whole EU have significantly suffered in the last five years as a result of massive and still on-going economic crisis. The Euro currency is, damaged by the vast differences between individual Eurozone members, with respect to their fiscal and monetary policies. While some states (commonly referred to as PIIGS) do have bigger problems with their finances, it is unthinkable for the others to be held responsible when serious issues, such as an inability to pay the debts, arise. Nevertheless, this was the case with Greece, when tens of billions of taxpayers’ money were used to service debts of one irresponsible state. Despite more than 50% of private sector debt being cut down by creditors, the threat of Greece’s default still lingers in the air. Getting rid of the unanimity requirement would make Europe much more able to respond quickly to crises. In the long run it would make negotiations for a federal union much easier, eventually turning it into reality. Achieving political integration and the abandonment of the veto that would come with it would then enable solutions to economic problems benefiting the whole even it unpalatable to some. Such position is also taken by Jacques Attali, a French economist who argues that “the institutional reform towards a federal Europe is necessary to implement a common fiscal and budgetary system.” [1] [1] Attali, J 2012, ‘Attali: A federal Europe is the only crisis exit strategy’, EurActiv, 18 April, viewed 29 September 2013, < . |
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validation-international-ehwlavpiems-con03b | Similarly to the first counter-point, it is arguable to what extent it is true marginalization of smaller states when these states comply with terms of agreements. Why do they not seek further steps to avoid being included in such “disadvantageous” changes, e.g. opt-outs? Also, if the marginalization was truly that apparent it is to be believed that these states would try to, for instance, change the QMV weighting. This has however not happened. Once again, does it not only prove that what is attempted to be satisfied is only selfishness and not common goals aimed towards improving life of the whole EU? |
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validation-international-ehwlavpiems-con01b | Federalization is a continual and on-going process. It does not happen overnight, and most importantly, it has been happening ever since the ECSC (European Coal and Steel Community) was founded. Therefore it is incorrect to think that there is anything like ‘hidden federalization,’ when its driving force are revisions of the common treaties which are agreed upon by all the member states. It is essential to point out that the EU is a democratic union, and member states joined the EU of their own accord. Becoming more federal would not affect this, there are many federal states that are democratic and not artificial such as Germany and the United States. Disposing of the unanimity requirement is not in any way harming the democratic principle of the EU as the changes will still have to be passed by Qualified Majority Vote. Strikingly, for many this is not enough, and other members have to understand that maybe without those who are not willing to move forward, the EU would be better off, what also means making tough decision of partially excluding those ‘backward’ states from further progress of the European Union. Concluding it in a single sentence, keeping the unanimity requirement intact servers only the egoistical needs of some specific nations. |
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validation-international-ehwlavpiems-con02a | The EU was based on the grounds of solidarity and the unanimity requirements ensures that no state will be repressed for the “greater good” While understanding the need to compromise, members of the EU are very different meaning that hardly any important decision made will fit all universally. The unanimity requirement is needed only in few exceptional cases, such as for common foreign and security policy, which is completely understandable, since it is hardly imaginable that a successful union can act internationally as a whole without the consent of all members. Members clearly need to decide between them, as they do now, which areas need unanimity. It will then only be applied to issues where there should be no shortcuts when discussing and making decisions. The unanimity requirement provides states with a guarantee that they will not be left out of the debate and that their voice matters equally, whatever the size and international position of the state. Without this guarantee, it is beyond doubt that trust among the members would be eroded, damaging the union’s unity of purpose. |
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validation-international-ehwlavpiems-con03a | Qualified majority voting (QMV – an alternative to the unanimity requirement) favors big states and marginalizes the others QMV in the Council before the accession of Croatia required 74.8% of the votes (258 out of 345). These votes are determined by an equation that takes into account size of population, e.g. Germany has 29 votes while Malta has only 3 votes. Also, a Member State may ask that the qualified majority represents at least 62% of the total population of EU. This system, as Novak puts it, may be potentially oblivious to the needs of smaller states as “the presidency and the Commission seek the support of big countries as a priority because they thereby achieve a qualified majority more quickly.” Furthermore, Novak continues that sometimes, small countries lack resources and large civil services “which seems to lead them pretty mechanically to rely on the Commission’s expertise, or, less often, on that of representatives of big countries.” [1] There we see that substituting unanimity requirement with QMV poses a real danger of marginalizing smaller states through a seemingly ‘democratic voting procedure’. While it is bad enough to foster such behavior regarding the common EU policies, it is unthinkable that this could happen during negotiations on important treaties (like common EU treaties). [1] Novak, S 2011, Qualified majority voting from the Single European Act to present day: an unexpected permanence, Notre Europe, viewed 29 September 2013, < . |
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validation-international-ehwlavpiems-con01a | Disposing of the unanimity requirements is essentially only hidden federalization of the European Union With the recent developments in the EU, the potential that some states may leave is a growing concern. People’s opinion towards the EU is becoming increasingly negative (trust towards EU has in 2012, compared to 2007, declined in all the nations except for Belgium). [1] This stems mainly from the fact that the EU is forcefully trying to invade the decision-making process of the sovereign members. Directives and regulations influencing lives within the nations agreed on at the supranational level, often it is felt without a democratic mandate, are not kindly welcomed. Therefore it is to no amazement that taking away the unanimity requirement, which is now used in the most important and controversial changes, would create huge pressure on the national parliaments to oppose such dictatorship. Fisher argues the idea of federal states “shows itself to be an artificial construct which ignores the established realities in Europe.” [2] Leaving would then be considered a feasible option, thus making the federalization completely counter-productive. [1] Torreblanca, JI, Leonard, M 2013, The Continent-wide Rise of Euroscepticism, European Council on Foreign Relations, viewed 6 October 2013, < . [2] Sieberson, SC 2010, ‘Inching Toward EU Supranationalism? Qualified Majority Voting and Unanimity Under the Treaty of Lisbon’, Virginia Journal of International Law, vol. 50, no. 4, pp. 929, viewed 29 September 2013, < . |
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validation-international-ehwlavpiems-con02b | Unlike the former Soviet Union, the European Union is no ‘jail’ and members can, even though such move would be unprecedented, leave the union at any time. It is therefore hard to define ‘oppressing for greater good’ when we realize that the state tacitly agrees to it by staying in the union, possibly because the membership is still beneficial, even if we consider the ‘oppression’ in question. In this case then are these ‘oppressed’ state not just lusting for something more rather than a reasonable concern regarding the national interests? Continuing in this line of thought, is this not the exact opposite of what the members should attempt to do? In cases where a state loses they should recognise that in some cases they will gain and others loose. |
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validation-international-ahbiataucs-pro02b | While African governments may be good at professing to want cooperation and integration the reality on the ground lags behind this considerably. No regional trade block has yet been really successful in creating a free trade area let alone a customs union and protectionism, restrictive trade practices and import bans often remain. [1] The effectiveness and chances of integration through free trade are also greatly reduced by almost all the potential member states having very similar economies that rely on the export of primary goods. This makes specialisation and a concentration on trade within the block difficult without a complete restructuring of countries economies. Moreover free trade requires effective infrastructure, something Africa is lacking. [2] Integration is therefore unlikely to go anywhere and even if it does it may have little effect. [1] Gumede, William, ‘Saving Africa’s free trade area from failure’, Pambazika News, Issue 553, 20 October 2011. [2] Goodridge, R.B., ‘Chapter 3: Factors Against Regional Economic Integration’, 2006, p.30. |
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validation-international-ahbiataucs-pro02a | There is already some African integration that can be built on. While African integration has been slow there has been real progress in constructing the building blocks to allow further integration. African countries are already somewhat integrated: for example 14 countries in West and Central Africa use the CFA franc as currency [1] and there are regional blocks in West Africa and East Africa. The existence of these regional free trade areas the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the East African Community (EAC), Common Market for Eastern and Southern African Countries (COMESA), and the Southern African Development Community (SADC) will eventually provide the springboard for further integration throughout the whole of Africa. [2] The latter three of these communities have signed a memorandum of understanding to cooperate on integration and harmonise areas such as trade. [3] More importantly, despite problems with the creation of a single currency, the EU remains a good model for the AU: no one would suggest that the EU is in danger of being disbanded. Though its members might have differences as to its exact structure, that debate is no different than in any other confederation. [1] Musa, Tansa, ‘Cameroon, BEAC see no CFA franc devaluation’, Reuters Africa, 28 November 2011. [2] ‘Developments in Regional Integration in Africa’, African Economic Outlook, 28 April 2012. [3] ‘Memorandum of Understanding on Inter Regional Cooperation and Integration Amongst Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC)’, 19 January 2011. |
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validation-international-ahbiataucs-pro03b | Many of Africa’s wars are ethnic conflicts (i.e. Rwanda, Burundi, Sudan, the Congo). These conflicts will not be dissipated by simply redrawing – or attempting to dissolve - national borders. Instead of integration if borders are the problem then Africa needs to be redrawn into smaller states based on ethnicity as in Europe. Secessionist would then movements would disappear, each state could have its own language so facilitating democracy, there would be no more identity politics and each state, though smaller would be stronger. [1] Only when this is done can these states begin continental integration. [1] Zachary, G. Pascal, ‘Africa Needs a New Map’, Foreign Policy, 28 April 2010. |
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validation-international-ahbiataucs-pro01a | The AU can bring peace to the continent Integration can bring peace; just like the European Union has in Europe. Since the fall of the Berlin Wall, the UN has slowly changed its relationship with regional organizations. It is more willing and through its agenda for peace has been demanding that regional organizations be responsible for peacekeeping, state-building and humanitarian assistance. [1] Part of the reasoning is that these states are more sensitive to local customs, concerns and diplomacy. Already, the African Union has taken on several peacekeeping initiatives; first in Burundi in 2003m and more recently on-going missions in in Darfur, Sudan, since 2004 and in Somalia since 2007. [2] The AU also allows regional economic communities to take a lead in responding threats to peace so allowing action to be taken at the appropriate level. [3] [1] Department of Peacekeeping Operations, ‘Cooperation between the United Nations and Regional Organisations/arrangements in a peacekeeping environment’, United Nations ,March 1999, p.6. [2] Murithi, Tim, ‘The African Union’s Foray into Peacekeeping: Lessons from the Hybrid Mission in Darfur’, Journal of Peace, Conflict and Development, Issue 14, July 2009. [3] Adebajo, Adekeye, ‘Strengthening Africa’s security architecture’, Utenriksdepartementet. |
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validation-international-ahbiataucs-pro01b | There is too much distrust amongst the AU’s membership already: Liberia, Guinea and Sierra Leone all accuse each other of backing rebel movements in their respective civil wars. The UN is asking regional organizations to shoulder some of its "peace and security" responsibilities out of desperation, as prompted by its failure in Rwanda, not as part of some strategy. In Kosovo, NATO had to intervene because Russia blocked any UN action at the Security Council. There are as yet no other successful examples of regional organizations (i.e. ASEAN, APEC, OAS) getting involved in a military conflict and successfully bringing peace. |
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validation-international-ahbiataucs-pro03a | Integration will fix the problem of borders For some commentators, Africa’s biggest problem is that its countries are remnants of colonial empires. In the post-colonial period, borders were drawn between states randomly, creating ethnic tension and geographic dissonance. Qaddafi argued that peace will break out when Africa’s borders disappear. As Saadi Touval argued “The borders are blamed for the disappearance of a unity which supposed existed in Africa in precolonial times… The borders are considered to be one of the humiliating legacies of colonialism, which, according to this view, independent Africa ought to abolish”. [1] Though unification is the end goal, the short-term objective is to create an African free trade area with some semblance of regional organization. Most importantly, the AU has abandoned the notion of absolute "state sovereignty": it can "peer review" the human rights and political situation in any of its members. [2] The EU was established after WWII to assist in the rebuilding of Europe; why can’t the AU do the same in Africa? [1] Zachary, G. Pascal, ‘Africa Needs a New Map’, Foreign Policy, 28 April 2010. [2] ‘About APRM’ African Peer Review Mechanism, 2011. |
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validation-international-ahbiataucs-con03b | Africa also has advantages that Europe did not have; there is no cold war dividing the continent into opposing armed camps, there are now many successful examples of developing world countries industrialising to draw on, and organisations like the EU that have forged on ahead have shown up some of the potential problems for Africa to avoid. Kofi Annan has also noted that Europe too started integration with a devastated continent "That, Excellencies, should be our aim - to rebuild, as Europe did, after a series of devastating wars, uniting across old divisions to build a continent characterized by peace, cooperation, economic progress and the rule of law." [1] Moreover some of Africa’s disadvantages could potentially be turned into advantages if integration is managed correctly. Africa’s lack of industrialisation for example means that member states can choose to specialise in complementary areas as they industrialise. [1] Annan, Kofi, ‘Call for Leadership in Africa’, Business Day, 10 July 2001. |
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validation-international-ahbiataucs-con01b | While it used to be correct that Africa prized sovereignty above everything else, including stability, [1] this is no longer the case. Just by signing up to the African Union states were showing that they were now willing to cede some sovereignty to the organisation as it involved ceding some power to the Pan African Parliament and the African Court of Justice and Human Rights. [2] Some sovereign power is also ceded to the Assembly of the AU, composed of heads of state and government, as while decisions are preferably by consensus it can also be by a two thirds majority, and the decision is still binding on the minority that disagrees. [3] Moreover the protocols establishing all of these bodies anticipate more powers slowly being transferred to them. In particular the Pan African parliament will slowly gain the power to legislate much as the European Parliament does. [1] Zachary, G. Pascal, ‘Africa Needs a New Map’, Foreign Policy, 28 April 2010. [2] Wachura, George Mukundi, ‘Sovereignty and the ‘United States of Africa’ Insights from the EU’, ISS Paper 144, June 2007, p.3. [3] Ibid p.4 |
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validation-international-ahbiataucs-con02a | African international organisations do not have a history of effectiveness In its thirty-nine year history, the predecessor of the AU, the OAU is almost universally judged as an abysmal failure. [1] It failed to challenge any major dictator on the continent and stood idle while civil war, ethnic conflict, poverty and disease ravaged ordinary Africans. Idi Amin, the former Ugandan despot, even served as the OAU chairman for a brief spell. Its only success was in preserving the notion of sovereign borders in Africa. The AU suffers many of the old problems of the OAU; particularly its capabilities falling well short of the ambitious rhetoric. The institution still does not have mechanisms to enforce or even encourage compliance so cannot resolve conflicts. When conflicts arise there has been difficulty getting action from the AU due to a preference for consensus and even if there is agreement the Union does not have the capability to intervene. [2] [1] Amoo, Samuel G., ‘The OAU and African Conflicts: Past Successes, Present Paralysis and Future Perspectives’, Institute of Conflict Analysis and Resolution George Mason University, May 1992, p.2. [2] Williams, Paul D., ‘The African Union’s Conflict Management Capabilities’, Council on Foreign Relations, October 2011, p.8, pp.20-22. |
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validation-international-ahbiataucs-con04a | The role of leaders will prevent success A pan-African organization must be willing to stand up to African dictators and military rulers, the real cause of bloodshed and poverty on the continent. So far the AU has failed in this mission: Zimbabwe’s Robert Mugabe is a charter member of the AU and the AU has done little to encourage him to relinquish control of his country. It continued this trend by being unwilling to recognise the Libyan rebels until after the capital, Tripoli, had fallen. [1] The conflict in Libya showed that are still happy to support autocrats and unwilling to champion democracy. [2] So long as this is the case the AU will be unable to pool sovereignty in the way the European Union has as these individuals are unwilling to give up power, whether that is in elections or to international organisations. [1] Adedoja, Tokunbo, and Oyedele, Damilola, ‘At Last, AU Recognisis Libyan Rebels’, This Day Live, 21 September 2011. [2] Tostevin, Matthew, ‘Has the African Union got Libya wrong?’, Reuters, 31 August 2011. |