How Can We Become a Global Economy with Closed Borders?

Have you ever read what’s on your passport? If, like me, your passport is Indian, you will see it bears the legend, “These are to request and require in the Name of the President of the Republic of India all those whom it may concern to allow the bearer to pass freely without let or hindrance, and to afford him or her every assistance and protection of which he or she may stand in need.”

Hypocrisy is not the prerogative of our government alone. Governments all over the world put similar wordings on passports and then keep increasing restrictions on travel. There may be some notable exceptions like the right of free travel for citizens of countries within EEC, but they only go to prove the rule.

This is yet another example of the government trying to turn the clock back. It is a tragic irony that the new vista of air travel launched at the beginning of this century is under concerted attack by governments the world over.

Who is the Government Trying to Keep Out?

We cannot do much about how the rest of the world treats our citizens, but surely something can be done about travel to and from India. If you want to travel abroad, you have to overcome the obstacles of immigration, customs and emigration procedures, not to mention the ubiquitous overhand of the Foreign Exchange Regulations Act (FERA).

Our stringent customs regulations make it seem as though the Indian government presumes that I would sell whatever I took out and then spend all the foreign currency. As for taking some Indian currency to pay for your taxi fare on return, forget it. You’ll be committing a crime.

Why should you have to clear customs when you leave India? Isn’t it just another example of government gone berserk? After a little reflection, I realized that if once you accept the necessity of controlling foreign exchange, many other controls follow naturally. Exports are controlled by inspectors, documents and exchange control specialists as people can keep their export earnings abroad. Talk about control breeding controls. The answer lies not in trying to control and control still more but in decontrol. Eliminate foreign exchange restrictions and many other controls impinging on our liberty become superfluous as well.

Today, it may be difficult to imagine travel without formalities and permissions, but it was not so long ago that people could travel to most parts of the world virtually unhindered. Now, most of us have resigned ourselves to queuing at airports, immigration counters, embassies for visas and being subjected to intrusive invidious customs checks by ill-mannered minions of authority.

Business India carried a story, way back in 1991, about the success of Indians making a career in computers in the “Silicon Valley” in the USA. Some of them tried to interest their US employers to invest in India, but the hurdles of petty officialdom sabotaged most projects.

An Indian entrepreneur from the valley wanted to bring in a computer workstation (paid for with his own dollars) to set up a software company in Bangalore. He was asked by a senior DoE (Department of Electronics) official in Delhi to produce a certificate from a lawyer that his computer was fit for software development. The president of the Silicon Valley Indian Professionals Association, Prakash Chandra, commented, “These officials should be willing to help rather than create problems for the businessman before a foreign investor – NRI or non-NRI – can feel confident about investing in India.”

Tavleen Singh wrote in The Indian Express in 1994:
“If Nehruvians need a lesson in just how vicious the babucracy can be, they need to spend a morning at any of our international airports. There they would get a chance to see just how badly Indian workers returning from foreign lands get treated when they return to the motherland. These workers went abroad without any help from the Government. Many sold off all their meager assets to go and sweat their guts out, along and friendless, in some of the most unattractive countries in the world, so that they could send valuable foreign exchange home to India. And when they return, carrying their cheap tape-recorders and their clutch of nylon saris they are treated like thieves by our babus… Does it make sense?”

If it is annoying for us to enter our own country, imagine what it must be for foreigners coming here on holiday or to invest. Instead of its grandiose schemes – backed by vast budgets – to develop the tourism industry the government could create a multi-billion-dollar tourism industry overnight without spending a rupee. How? By abolishing all these irksome and pointless visa, airport, border, exchange and customs controls.

But What About Security?

Are controls not necessary for keeping criminals and spies out? If you say yes, then it would justify every state, city, town, village, locality and perhaps neighborhood invoking the same argument to implement similar controls. This did happen in communist countries. The former USSR and the former East Germany were jails. The present-day North Korea and Myanmar are jails.

Criminals and spies well know the checks they will face and are prepared with forged documents, multiple passports and the like. Have you ever thought about the efficiency and integrity of underpaid, undereducated immigration inspectors with blank and moronic looks? Can they spot any real offenders? I think not. In any case, whether they do catch anyone or not, they certainly end up harrying you, I and all the other travelers. The police should do its job unobtrusively and not by harassing everyone.

There may be a need to carry out spot check at airports, railway stations, ports or bus depots. This should be done by competent officers when their suspicions are aroused or on the basis of identifying photographs. These would be far more effective, while lulling a fugitive into a false sense of complacency. Random checks scientifically performed by trained eyes are far more effective than a routine monotone of continuous checks which everyone knows about. There may also be a reason to check everyone for a few days if there is, say, intelligence regarding a potential terrorist threat. But all these are exceptional circumstances. They certainly do not provide a carte blanch to the government to treat everyone as a potential felon until proven innocent by checking passport numbers.

India is not the only country that exercises unnecessary control over immigration. Lifestyle guru, Dr. WG Hill, in his treatise recounts a visit to the erstwhile Czechoslovakia in which getting his visa extended resulted in insults and several queues. He also observed that countries saddled with exchange control regulations will not accept their own money from foreigners for anything – only foreign exchange. Sounds familiar.

Developed countries restrict immigration so as not to be inundates with the destitute of the Third World. We are left to wonder whatever happened to America’s ideals which inspired the following inscription on the Statue of Liberty, “Give me your tired, your poor, your huddled masses yearning to breather free, the wretched refuse of your teeming shore, send these, the homeless, tempest tossed to me: I lift my lamp beside the golden door.”

The voluntary exchange ethic brooks no justification for immigration controls. Citizens of a country would deal with a foreigner only if they expect to gain and the same would apply to the foreigner. TO prevent this is again an example of the state’s coercive power abrogating our freedom of choice to deal with whom we want to.

Study after study in the USA has shown that immigrants do not take away jobs. They, in fact, intensify economic growth and lead, in a very short period, to more job opportunities. Each person who comes in creates a demand for goods and shares in infrastructure costs, be it roads, airports, hospitals, schools, defense or the police. Immigrants also pay far more in taxes and share benefits much less, as government entitlements are not available immediately. Even if one contends that immigrants obtain more in welfare benefits than they contribute in taxes, the right remedy is to abolish all welfare entitlements and doles, not to curb immigration.

Local people take a dim view of foreigners coming and occupying their jobs. It is forgotten that foreigners also create demand for cars, housing, food products, provide their savings for investment and thereby generate employment. Many immigrants bring in sorely needed capital, technical skills and entrepreneurial ability.

Freedom of Movement is the Answer

It is only when men can move freely that there can be a free movement of capital, goods and technology. Along with other measures, India needs to abolish visa restrictions, immigration and emigration procedures and customs duties.

Reginal Moulding, President of the Board of Trade in the British Cabinet, speaking before the Economic Club of New York City on “Trade Policies for a Free World,” stated:

“The free flow of goods and services, of travelers and work, people and capital, between one country and another is, in my judgement, the greatest guarantee of the kind of international understanding upon which alone our hopes of peace can securely rest. Moreover, it is only in a world where trade moves freely that the people now living in grinding poverty can hope to see themselves and their successors achieving decent standard of living.”

Innovations, creativity, discoveries and entrepreneurship, of course, help the innovator, creator, discoverer and entrepreneur in making money or even a fortune, but this fortune is made by fostering the well being of everyone dealing with these persons and more often than not by benefiting the entire world.

Ford made a fortune, but that could not be a fraction of the satisfaction he gave to all car owners. Bill Gates started a company that was at the leading edge of information and software revolution. Thanks to Microsoft, two thousand employees became millionaires and the world made a quantum leap in productivity thanks to his computer operating software.

Jerry Taylor asks us to remember, “Not a single material resource has ever been created by nature… Two hundred years ago petroleum was just a useless ooze that actually drove down property values. Human creative endeavor, knowledge and technology, however, turned the ooze into a valuable resource.”

The bottom line is that the greater the number of people who are able to transact freely with each other, the more will be the bonuses of creativity, of men living and dead, to be enjoyed by all of us and by the future generations.