Alex Tabarrok

Pragati: India has tremendous advantages as a producer of tourism, but its tourism sector is far too small. India is underperforming and in the process giving up tens of billions of dollars in foreign exchange revenue that could lift millions out of poverty.

IndiaTourists

Nearly nine million tourists visited India in 2016 generating foreign exchange revenues of about $23 billion USD annually. At first glance, the figures are impressive. Tourism is one of India’s largest export sectors, beating out such leading sectors as apparel ($17.4 billion, 2014) and medicinals and pharmaceuticals ($13.9 billion, 2014). A more careful examination, however, reveals that India’s tourism sector is small compared to its potential.

The table below shows the top ten countries by international visitors. France leads the list with 84.5 million visitors a year, about ten times the number of visitors to India. The European countries, France, Spain, Italy, Germany and the UK benefit by being close to one another which generates significant mutual tourism. Mexico, Russia and Turkey, however, all have approximately three to five times as many tourists as does India. China has more than six times as many tourists as does India.

Although India underperforms on the number of visitors it does very well on earnings per visitor…Remarkably, India earns more per visitor than does China and almost as much as does the United States, a whopping $2,610. In fact, despite the small number of tourists, India’s revenues per tourist make it 9th in the world for total tourism revenues, just above Mexico. Visitors to India spend a lot of money which makes it all the more remarkable that India has so few visitors.

That’s me writing in Pragati, an Indian journal of ideas. India could increase its earnings from tourism by tens of billions of dollars with just a few simple reforms–see how at the link and some additional ideas for increasing tourism are in a podcast that I did with Amit Varma.

And, of course, even without reforms on the supply side there should still be more tourists in India as there are a great number of things to see!

Temple at Chittorgarh Fort.

Chittorgarh Temple
Udaipur (Sahelion Ki Bari) with early 18th century fountains that work entirely by gravity.
Udaipur Alex
Ajanta caves.
Ajanta1

It’s a paradox of kinds that in the United States we use markets more than in other countries but as a people we are less likely to participate in a market. Of course, when we buy things at the supermarket we Lasalgoan1are participating in a market but in posted-price markets it’s hard to see price formation and supply and demand in action. So when I travel abroad, I like to visit markets. (Tyler calls it GDP tourism).

The Lasalgaon onion market is Asia’s largest. It’s about four hours from Mumbai in Nashik district which is also well known for grape production. Twice a day during the season(s) onion farmers bring their small trucks and trailers filled with onions to auction. Farms in India are small, approximately 67% are one hectare (2.4 acres) or less and 99% are below 10 hectares. Thus, hundreds of trucks park in long lines that stretch into the distance. The farmers dump some of their onions onto the ground so the buyers can inspect for the type, size, moisture content and quality. An auctioneer then walks down the line and quickly auctions off the content of each truck. As we watched, one truck’s onion supply was bought for a buyer in Dubai, the next went to Malaysia, the next and highest quality went to France. The process is fast, fast, fast!

Lasalgoan2We were guided in our adventure by Nanasaheb Patil, a highly respected businessperson and the chairman of the Agricultural Produce Market Committee, a group that runs the market and ensures the honesty of the auction process.

Current onion prices are very low, below production cost, but high onion prices have brought down more than one national government so the farmers don’t get much of a hearing. When prices are high the government bans exports and blames farmers for hoarding (when prices are low as is true today, exports are allowed).

The onion crop from certain times of the year rots quickly. Lasalgoan3The government did build a very expensive irradiation facility to improve shelf life but the facility, which can process 10 tonnes of onions an hour, was only used for 3 hours of onion processing in a recent year! Although using the facility isn’t expensive it requires unloading, sacking and reloading tonnes of onions which renders it uneconomic (the facility is used for mango irradiation because mangoes exported to the US must be irradiated.)

One thing I hadn’t expected was that our presence at the auction market was something of an event and led to a story and photo (you can probably spot my wife and son) in the local newspaper.

We also visited some of the local grape farms. You can get an idea about wages by noting that on this farm, which was exporting grapes, every single bunch was wrapped in newspaper to prevent sunburn.

A special hat tip to Milind Murugkar, engineer, writer, and long-time reader of MR who invited me to Nashik and arranged for us to meet our wonderful host Nanasaheb Patil.

grapes1

We fight over health care policy because we focus on demand and redistribution. We could reach greater agreement if we focused on supply and innovation. What are the key areas where agreement is likely?

1) Cancer kills both Republicans and Democrats so more spending on medical research is likely to reach broad agreement.  As I said in Launching:

Looking at the future, if medical research could reduce cancer mortality by just 10 percent, that would be worth $5 trillion to U.S. citizens (and even more taking into account the rest of the world). The net gain would be especially large if we could reduce cancer mortality with new drugs, which are typically cheap to make once discovered. A reduction in cancer mortality of this size does not seem beyond reach, and the value of such a reduction in mortality far exceeds that of spending more on medical care today. Yet because the innovation vision is not central to our thinking, we overlook potentially huge improvements in human welfare.

By greater spending on medical research, I mean not only greater spending through the NIH but also a commitment to innovation policy more broadly. We know, for example, that price controls kill medical research so no price controls. We can also improve the FDA. I would favor less regulation but there are other methods to speed up the approval process which could command bipartisan support such as greater funding of the FDA. The FDA is also not monolithic, some departments are better than others, so we can reform the FDA by making it more like the better parts of itself.

In thinking about pharmaceutical regulation we also need to remember that 80-90% of prescriptions are for generic drugs and due to intense competition, generic drug prices are low and falling–so lets build on the parts of the US health care system that work well by keeping the entry barriers to entry in the generics market low.

2) Increase the supply of physicians. Despite an aging population and greater demand, the number of MDs per person has been trending downwards! Increasing physician supply could involve a combination of increased immigration of foreign physicians (skilled immigration is really a non-brainer that receives widespread support), increased slots at medical schools and in residency programs (via Medicaid), increased support for allowing nurse practitioners, dental hygienists and so forth and making occupational licenses portable across states. (In addition to making it easier for foreign physicians to come to US patients we should also make it easier for US patients to travel to foreign physicians–patients without borders). None of these things are easy to do, of course, but neither are they riven by ideological differences.

3) Demand price transparency from hospitals and other health care providers. In real markets, a price is a signal wrapped up in an incentive. With few exceptions, we don’t have real markets in health care and so “prices” neither signal nor incentivize. Thus, I don’t expect miracles from “price” transparency and this is a policy that could go wrong but transparency would still allow for some standardization, comparison, and computation of tradeoffs. Price transparency would also limit some of the worst forms of bill abuse. Even the Soviets found prices to be useful for these purposes.

Other supply side reforms that could find bipartisan support?

Walter Olson at Overlawyered reports:

Those free online course materials may be gone from the University of California, Berkeley, courtesy of a U.S. Deparment of Justice interpretation of the Americans with Disabilities Act and related statutes, but they’re not gone from the Internet: “20,000 Worldclass University Lectures Made Illegal, So We Irrevocably Mirrored Them” [LBRY] Won’t that infringe on a lot of copyrights? The site claims not: “The vast majority of the lectures are licensed under a Creative Commons license that allows attributed, non-commercial redistribution.” Earlier coverage here, here, here, and here.

As someone put it, it looks as if the internet recognizes ADA litigation as damage and routes around it.

Jeremy Kauffman at LBRY gives some more detail:

The LBRY protocol provides a completely decentralized network for discovering, distributing, and publishing all types of content and information, from books to movies.

When publishing the lectures to LBRY, the content metadata is written to a public blockchain, making it permanently public and robust to interference. Then, the content data itself is hosted via a peer-to-peer data network that offers economic incentives to ensure the data remains viable. This is superior to centralized or manual hosting, which is vulnerable to technical failure or other forms of attrition.

I wrote about online education and the ADA in Egalitarianism versus Online Education and I’m an adviser to LBRY so I’d like to say that this was my idea but I was not involved!

The structure of Bombay is intimately tied to the history of the United States in ways that illustrate the long arc of globalization. At the heart of Bombay, around the Oval Maidan, on which cricket games are often played, one can see many of Bombay’s iconic Victorian buildings including the University of mumbai-high-court-and-rajabai-clock-tower-mumbai-indiaBombay, the Bombay High Court and the Rajabai clock tower. These buildings and many others were begun in the late 1850s and 1860s during the Bombay boom; a boom brought about by America’s Civil War.

The U.S. South began the civil war by embargoing cotton exports and burning 2.5 million bales of cotton in order to create a shortage and bend the world to its will. The embargo didn’t lead to Britain’s support, however, and by the time the South realized it had shot itself in the foot the North imposed its own blockade. Cotton prices skyrocketed–between 1860 and 1863-1864 prices rose by a factor of four on average and at times by a factor of 10. As cotton exports from the United States fell, exports from Persia, Egypt and especially India boomed. As Sven Beckert put it:

The bombardment of Fort Sumter…announced that India’s hour had come.

In India farm land was switched over to cotton, railroads and telegraphs were built uniting cotton producing areas in Bihar with cotton’s chief trading center and port, Bombay. Production and exports boomed. Vast fortunes were made from the cotton trade and the speculation it engendered; fortunes that were plowed into universities, libraries and many of the great buildings that mark Mumbai today. In fact, the Back Bay Reclamation project began at this time so some of the very ground that Mumbai sits upon has its roots in the American Civil War.

Influences flowing in the reverse direction were at least as strong. The decline in cotton exports from the South created mass unemployment in Great Britain and it was not out of the question that Britain would side with the South. Beckert quotes the investment bank Baring Brothers:

In the spring of 1862, Baring Brothers Liverpool expressed their view that war between the United States and Great Britain was less likely “provided we get a large import from India.”

Fortunately, increased Indian cotton production alleviated the “Cotton famine” and reduced the South’s bargaining power. Thus, “Indian cultivators and merchants played a small role in contributing to Northern victory in the Civil War.”

General Robert Lee’s surrender at Appomattox ended the Bombay boom. As news of Lee’s surrender spread, market prices crashed and speculative fortunes were lost. The railways and the telegraphs, however, now linked India to the world. And at the heart of Bombay, the universities, the libraries and the civic institutions endured making Bombay, Urbs Prima in Indis.

The annual Public Choice Outreach Conference is June 16-18th, at the Hyatt Arlington in Rosslyn, VA! Submit an application and please do encourage your students to apply. Here’s some more information.

What is the Public Choice Outreach Conference?
The Public Choice Outreach Conference is a compact lecture series designed as a “crash course” in Public Choice for students planning careers in academia, journalism, law, or public policy. Graduate students and advanced undergraduates are eligible to apply. Many past participants of the Outreach seminar have gone on to notable careers in academia, law and business.

Who can apply?
Graduate students and advanced undergraduates are eligible to apply. Students majoring in economics, history, international studies, law, philosophy political science, psychology, public administration, religious studies, and sociology have attended past conferences. Advanced degree students with a demonstrated interest in political economy or demonstrated interest in political economy are invited to apply. Applicants unfamiliar with Public Choice and students from outside of George Mason University are especially encouraged. Download a 2017 application here.

What are the fees involved?
Outreach has no conference fee – it is free to attend. Room and meals are included for all participants. However, ALL travel costs are the responsibility of the participants.

If you have any questions please contact:
Lisa Hill-Corley, Outreach Conference Coordinator
(703) 993-2316
email: lhillcor <at> gmu <dot> edu

Policy makers and intellectuals in India are well informed about politics and intellectual developments in the United States and Europe. Among this group, for example, one can easily strike up a conversation about say Angus Deaton on RCTs versus structural econometric modelling. The similarity in the conversation extends far beyond the scientific, however, in ways that I sometimes find baffling.

When I gave a lecture at a local university, for example, I apparently shocked the students when I said matter-of-factly:

India would be a better country if it were richer and more unequal.

I think India’s extreme poverty makes this obviously true in a utilitarian sense, i.e. better for Indians, but it wasn’t so obvious to the students some-of-whom discussed inequality in terms that could easily have been duplicated at Berkeley. The inequality conversation has jumped the pond in ways that seem to me to be completely inappropriate.

Writing in the Times of India, Rupa Subramanya gives another example, a bill for paid maternity leave that has just passed the Indian parliament (waiting only on the president’s signature). As I pointed out earlier, by far the majority of Indians are self-employed and in the informal sector. The very idea of paid maternity leave, therefore, is bizarre. Is the right hand to pay the left?

As Subramanya writes, even fewer women than men work in the formal sector:

[W]omen’s labour force participation in India is 25% or less, as variously estimated by the International Labour Organisation (ILO) and from India’s National Sample Survey Organisation (NSSO) data. What is more, estimates by MLE and ILO suggest that less than 5% of female workers aged 15-49 are in the formal or organized sector. What this implies is that effectively those covered by paid maternity leave whether the old or the new provision are at best a small number of relatively privileged women working in formal sector jobs. The vast number of women working in the informal sector effectively have no social protections at all, forget about paid maternity leave benefits.

Add to this the well-known reality of poor implementation and even poorer monitoring and the truth is relatively few women benefit from paid maternity leave now, and by definition, therefore, very few stand to gain from the benefits being increased.

…Legislating generous benefits in a still poor country is putting the cart before the horse and is sure to fail. All that will happen are more frustrated women unable to find work, employers unwilling to hire women, and more non-compliance and non-enforcement of existing laws for a state that is already stretched thin trying to do far too many things with too few resources.

So why pass a bill which is so at odds with the real issues facing women on the ground? I think Subramanya is correct:

It’s hard to escape the impression that the main purpose of the increased maternity leave benefits is public relations, either aimed at educated urban women or targeted for international consumption where India is approvingly clubbed with rich countries like Norway and Canada as having the highest paid maternity leave in the world.

Fatigued drivers cause accidents. In response to this obvious fact, we limit bus and taxi drivers to a maximum of 10 hours of driving after 8 consecutive hours off duty. Yet when it comes to physicians, the current standard is significant more lax; first-year residents are restricted to 16-hour shifts! That already is nuts. I often teach a night class, 7:20-10 pm and I always try to teach the more difficult material early because by 9pm I am not at the top of my game. Needless to say, medical residents are far more stressed and fatigued than teachers. Moreover, while first year residents can work up to 16 hours, second year residents can work up to 24 hours straight and even up to 30! Isn’t it amazing how one year of residency can teach physicians how to function without sleep?

The current standards, which strike me as absurdly low, are actually due to restrictions put in place in 2003 and 2011–restrictions which are now being lifted. The new plan is to allow longer hours for first year residents:

Rookie doctors can work up to 24 hours straight under new work limits taking effect this summer — a move supporters say will enhance training and foes maintain will do just the opposite.

A Chicago-based group that establishes work standards for U.S. medical school graduates has voted to eliminate a 16-hour cap for first-year residents. The Accreditation Council for Graduate Medical Education announced the move Friday as part of revisions that include reinstating the longer limit for rookies — the same maximum allowed for advanced residents.

An 80-hour per week limit for residents at all levels remains in place under the new rules.

Studies have found that physicians who work longer hours are much more likely to get into auto accidents on the way home. Physicians and nurses who work longer hours also make more medical mistakes.

The main argument in favor of long hours is that the 2003 and 2011 restrictions do not seem to have greatly improved patient safety. That is surprising but the micro and experiential evidence that fatigue makes for mistakes is so strong that the lesson to be drawn isn’t that longer hours don’t lead to mistakes–the lesson is either that the restrictions were routinely ignored (as the National Academy of Science study found), that the studies done to date are misleading for a statistical or design reason or that there is another constraint in the system that needs to be examined. One possibility for another constraint is that handoffs of patients between physicians aren’t handled well. But that means that poor handoffs are killing as many people as fatigue!

In no other field do we tolerate error as much as we do in medical care. Why does the government regulate driving hours more than medical hours? It’s not just the government. It’s amazing that in a society where McDonald’s can be sued for making people fat that the tort system hasn’t shut down absurdly long residency hours (there have been a few cases). Medical care is a peculiar field (cue Robin Hanson).

Aside from Hanson-type factors, a key factor that explains what is going on is that residents are a huge profit source for the hospitals. Much like student athletes, residents are underpaid. As a result, hospitals want to use residents as much as possible so they lobby for longer hours even at the expense of patient safety.

India is a much more entrepreneurial society than the United States. That may seem surprising since India is poor and we typically associate entrepreneurship with being rich but it’s clearly true. Everyone here is on the make and open to an opportunity. You need to hire someone to fix your wifi or repair a bicycle or make a movie? You can find someone within hours. “Yes, we can do that” is the default answer to any question. Of course, it may have to be done illegally but, subject to that, it can be done. The can do attitude is especially prevalent in Mumbai but it’s true elsewhere in India as well.

Indians are entrepreneurial because they work for themselves. Overall, 95% 80-90% of Indians are self employed compared to just 10% of workers in the United States.* That is perhaps one reason why the National Academy of Science report on immigration found that “Indian immigrants are the most entrepreneurial of any group including natives.”

However, when we reverse the employment statistic–only ~15% of Indians work for a firm compared to approximately 90% of US workers we see the problem. Entrepreneurship in India isn’t a choice, it’s a requirement. Indian entrepreneurship is a consequence of India’s failed economy. As a I wrote in my Cato paper with Goldschlag, less developed countries in general, not just India, have more entrepreneurs,

If we define entrepreneurship as self-employment then there is much more entrepreneurship in poorer countries. People in poorer countries have to be entrepreneurs because there are relatively few jobs, that is to say few employers of large numbers of workers. Moreover, although not all self-employed workers have the skills or temperament for entrepreneurship, the identification of entrepreneurship with self-employment is not a definitional sleight-of-hand. Travelers to less developed economies often are surprised at how much more market oriented, dynamic and entrepreneurial these economies appear to the naked eye. Indeed, tourists are more likely to visit an actual market in a developing economy than they are at home. The visceral hustle and bustle of the town market is a display of real entrepreneurship. The greater familiarity that people in developing countries have with entrepreneurship is likely one reason why immigrants to the US are more than twice as likely to start new firms as are natives (Fairlie 2013).

The problem with developing countries is not that they lack entrepreneurs but that entrepreneurs cannot grow their firms large enough to become major employers.

The modal size of an Indian firm is 1 employee and the mean is just over 2. The mean number of employees in a US firm is closer to 20 but even though that is ten times the Indian number it obscures the real difference. The US has many small firms but what makes it different is that it also has large firms that employ lots of people. In fact, over half of all US workers are employed by the tiny minority (0.3%) of firms with over 500 employees.

Most workers in the United States work for large firms. In India, however, large firms are negligible as far as employment is concerned and that is a huge problem because large firms are more productive. India’s pre and post-colonial history all put barriers in the way of large firms that only recently have begun to fall. In Can Indian Grow?, Anantha Nageswaran and Gulzar Natarajan’s admirably clear and useful summary of the Indian economy, they summarizes some of the key issues:

Before independence, India’s colonial rulers snuffed out enterprise by exporting India’s raw materials to nurture businesses in their own countries. The capacity to create and nurture big businesses in the private sector in sufficient numbers has never been achieved since the state occupied the commanding heights of the Indian economy in the first three decades after independence. Moreover, the post-independence legal and regulatory framework favored small businesses: the production of certain items was reserved for small-scale industries, and labor protection was emphasized rather than efficiency and scale. Because of India’s experience of being ruled by a foreign trading company, a suspicion of big businesses still lingers.

As a result, small firms in India don’t grow:

Most Indian firms start in the informal sector and never grow or, worse, diminish in size over time: according to a 2013 International Finance Corporation study comparing the size of thirty-five year-old firms in India, Mexico, and the United States with their size at start-up, in India the size had declined by a fourth, in Mexico the size had doubled, and in the United States the firms were ten times as large. That is deeply troubling. As firms age, they are expected to get larger and to employ more people. Since India’s experience is orthogonal to this expectation, something in the Indian business ecosystem is badly broken.

Entrepreneurship, like other factors of production, can be misallocated. India has great entrepreneurs but their hard work, creativity, and risk taking is being wasted building tiny, stunted firms.

* The figure for 95% self-employed seemed high. I checked with the authors and after tracking down the figure they found a slight error. The 95% refers to workers in the informal sector. Most firms in the informal and formal sector are small, however, so the corrected figure is that about 80-90% of Indians are self-employed.

How would the Trump-Clinton debates have been perceived if the genders had been reversed? Two professors worked with trained actors to duplicate not just the words but also the mannerisms of Trump and Clinton–only with a female actor playing Trump, now called Brenda King, and a male actor playing Clinton, now called Jonathan Gordon.

[The professors] began the project assuming that the gender inversion would confirm what they’d each suspected watching the real-life debates: that Trump’s aggression—his tendency to interrupt and attack—would never be tolerated in a woman, and that Clinton’s competence and preparedness would seem even more convincing coming from a man.

What happened, however, was quite different. Audiences in two sold out performances were shocked. They liked Brenda King and distrusted Jonathan Gordon!

We heard a lot of “now I understand how this happened”—meaning how Trump won the election. People got upset. There was a guy two rows in front of me who was literally holding his head in his hands, and the person with him was rubbing his back. The simplicity of Trump’s message became easier for people to hear when it was coming from a woman—that was a theme. One person said, “I’m just so struck by how precise Trump’s technique is.” Another—a musical theater composer, actually—said that Trump created “hummable lyrics,” while Clinton talked a lot, and everything she was was true and factual, but there was no “hook” to it….Someone said that Jonathan Gordon [the male Hillary Clinton] was “really punchable” because of all the smiling. And a lot of people were just very surprised by the way it upended their expectations about what they thought they would feel or experience.

Here’s a clip:

Immigrant Doctors

by on March 7, 2017 at 9:01 am in Uncategorized | Permalink

One percent of all the physicians in the United States come from the six countries targeted in Donald Trump’s new Executive Order. I found that a surprisingly high number. According to the Immigrant Doctors Project, those 7000 physicians provide 14 million doctors’ appointments each year and many of them are located in the poorer, whiter, and rural parts of the country.

I don’t see this as a knockdown argument against the policy but it does illustrate a surprising cost and also how much the United States benefits from the immigration of the highly-skilled and educated.

Theft! A History of Music

by on March 6, 2017 at 7:13 am in Books, Economics, Law | Permalink

Theft! A History of Music is a graphic novel by James Boyle, Jennifer Jenkins and the late Keith Aoki. It’s about musical borrowing and the laws that have attempted to regulate musical borrowing and inter-mixing over the past 2000 years.

The history in this book runs from Plato to Blurred Lines and beyond. You will read about the Holy Roman Empire’s attempts to standardize religious music with the first great musical technology (notation) and the inevitable backfire of that attempt. You will read about troubadours and church composers, swapping tunes (and remarkably profane lyrics), changing both religion and music in the process. You will see diatribes against jazz for corrupting musical culture, against rock and roll for breaching the color-line. You will learn about the lawsuits that, surprisingly, shaped rap. You will read the story of some of music’s iconoclasts—from Handel and Beethoven to Robert Johnson, Chuck Berry, Little Richard, Ray Charles, the British Invasion and Public Enemy.

Theft! is informative and quite fun. I enjoyed it a lot. You can buy a paperback or get a free download. Here’s one page:
Theft_173

illegal constructionA story in The Times of India unwittingly illustrates the problems of construction in Mumbai. It is headlined, 11-storey illegal building near tracks finally razed. Many newspapers carried the story and all of the ones that I read took a righteous tone. ‘Finally this illegal monstrosity has been demolished’, they said. The authors appeared to regret only that the city had taken so long to act.

The building was not illegally constructed on public property or park land nor on a historical landmark. There were no safety claims, as far as I could find, although people worried about the safety of the demolition job given the nearness to the railroad. The photo at right shows a before and after picture. The after does not look better to me than the before.

Not everyone was pleased. The locals, presumably mostly residents (or perhaps hired thugs), tried to stop the demolition:

The BMC began demolition of the structure in June 2016, but owing to severe resistance from locals and no adequate police protection, the work had to be stopped abruptly.

The demolition resumed in August 2016 with the help of around 80 labourers. Though locals again threatened the labourers, the BMC continued the work amid police protection.

Eventually, however, the building was razed to the ground. But here is where it gets interesting. Amazingly, this is not the first time a building on this site has been demolished. According to another report this is in fact the third demolition. Now either the developer is an idiot or it must be so costly to construct a building legally that it’s worth the very real risk of demolition to construct it illegally.

I understand the frustration that people feel when the law is flouted but the real question stories like this raise is, What kind of law makes it so expensive to construct new apartment buildings in a city that by some measures is the most unaffordable in the entire world?

Komodo Dragon Blood!

by on March 3, 2017 at 7:28 am in Uncategorized | Permalink

The Economist covers some important new research out of George Mason University on the search for new antibiotics:
Komodo

MYTHOLOGY is rich with tales of dragons and the magical properties their innards possess. One of the most valuable bits was their blood. Supposedly capable of curing respiratory and digestive disorders, it was widely sought. A new study has provided a factual twist on these fictional medicines. Barney Bishop and Monique van Hoek, at George Mason University in Virginia, report in The Journal of Proteome Research that the blood of the Komodo dragon, the largest living lizard on the planet, is loaded with compounds that could be used as antibiotics.

Komodo dragons, which are native to parts of Indonesia, ambush large animals like water buffalo and deer with a bite to the throat. If their prey does not fall immediately, the dragons rarely continue the fight. Instead, they back away and let the mix of mild venom and dozens of pathogenic bacteria found in their saliva finish the job. They track their prey until it succumbs, whereupon they can feast without a struggle. Intriguingly, though, Komodo dragons appear to be resistant to bites inflicted by other dragons.

Most animals—not just Komodo dragons—carry simple proteins known as antimicrobial peptides (AMPs) as general-purpose weapons against infection. But if the AMPs of Komodo dragons are potent enough to let them shrug off otherwise-fatal bites from their fellow animals, they are probably especially robust. And that could make them a promising source of chemicals upon which to base new antibiotics.

Ji Haan, Minister

by on March 2, 2017 at 7:22 am in Economics, Law | Permalink

One of the unfortunate legacies of British colonial rule in India is a permanent civil service that tends to subvert any change that it deems against its interests, even when such change is promoted by elected officials. This is one reason why change in India is often two steps forward, 1.9 steps back. A case in point is India’s newly passed Goods and Service Tax (GST).

The GST was supposed to solve a long-standing problem of Indian intra-national trade. Unlike say the US common market, Indian states erect tariff and non-tariff barriers against the products of other states. As a result, production is allocated inefficiently–Indian firms with high costs hide behind barriers and produce too much while Indian firms with low costs can’t expand sales to other states and so produce too little.

(Canada, by the way, also has this problem. It’s often cheaper for a Canadian firm to ship to the US than to another province in Canada. You can find similar problems in Southern Africa where it is cheaper for South Africa to import produce from South America than from Zambia, as this excellent video discusses.)

trucksIn addition to the inefficient allocation of production, barriers to internal trade have also raised India’s transportation and logistics costs.

At the Walayar checkpoint in southern India, lines of idle trucks stretch as far as the eye can see in both directions along the tree-lined interstate highway, waiting for clearance from tax inspectors that can take days to complete.

Delays are so bad that textile entrepreneur D. Bala Sundaram has stopped sending his trucks to the international container terminal at nearby Cochin, instead diverting them hundreds of kilometres to a smaller regional port and onwards via Sri Lanka…

Overall:

Two-thirds of India’s freight travels by road. But only 40% of the travel time is consumed by driving, according to the World Bank. The rest is spent on waiting at state border checkpoints, paying state government levies and dealing with regulatory bureaucracies that vary from state to state.

The sad irony is that India spends billions improving its roads only to force its trucks to stop at state border checkpoints, sometimes for days, undermining the gains from the investment in roads.

The GST was going to simplify all this with a single umbrella tax creating one-tax, one-nation. Alas, the dream is being subverted. The law created a GST council of federal and state ministers and through this council the GST is rapidly becoming more complex and convoluted. First, one-tax was changed into four and with numerous exemptions the final number may end up being more like seven or eight.

Second, as I witnessed traveling between Uttar Pradesh and Rajasthan recently, the trucks are still lining up and may continue to do so:

The revolution the proposed goods and services tax (GST) promised might not be all that rosy because it would be hobbled by the need for an e-permit to be flashed at inter-state borders as the states insisted the old analogue practises continue.

The states seem to have gotten their way and will continue with the old ‘permit raj’ system, undermining one the biggest gains of GST.

The E-permit, by the way, sounds modern but don’t be fooled. Like India’s e-visa there is really nothing e about it–it’s just modern labeling for an old system.

Eventually the GST will be beneficial to India but it’s two steps forward, 1.9 steps back.