Small May be Efficient: A Lesson for Canada
(from my archive: October 24, 1995, still applicable)
October 30th is the day of referendum in Quebec. Its residents will have an opportunity to support the notion of Quebec as a separate country by voting ‘yes’ or to renew their alliance with the rest of Canada by voting ‘no’. In the event of a ‘yes’ vote, the majority of Canadians would have a hard time to conceive of a Canada without Quebec. But it is time to accept this harsh reality.
First, now a days countries are not independent in their pursuit of economic policies. Most of the global monetary and fiscal policies are regulated by a few countries and international institutions, and economic decisions are dictated by the multinational companies. It appears that the creation of a future state would depend more on the distinct cultural values than on the economic and geographical reasons. If majority of Quebecers believe that the benefits they would derive by maintaining their distinct culture and social values in a separate country would outweight the cost and pain of separation, Quebec should form its own independent country. That applies to other provinces as well.
Second, Canada is a country of loose federation of ten provinces and two territories. Each province has enormous power to levy its own taxes and manage its socio-economic programs. The federal government often appears just a nominal head in key economic and political issues, such as (unsuccessful) meetings on interprovincial trade barriers and Meech Lake constitutional reform. The federal government may also be in an awkward situation of undertaking policies which would be conflicting to the interest of two provinces. As an example, unemployment may be the major problem in Quebec, but at the same time, higher interest rate may be needed to dampen the over-heating economy of British Columbia. The federal government would be unable to meet the conflicting needs of the two provinces. Quebec and for that matter, British Columbia would need their home ingrained economic policies to remedy their problems, that would come only through each province being an independent country.
Third, Canadians would be short sighted to overlook large cost that they have historically been enduring for keeping Quebec in Canada. These costs are in terms of forced participation of Canadians in constitutional debates, referendums, economic uncertainty, loss of potential investment and employment, higher interest, unfair federal transfers etc., and as a result, deteriorating living standards. Against this, they have to face a very painful and costly, but one time realization that Quebec is no longer in Canada.
The most important cost is the official policy of bilingualism. French is spoken by not more than 20% of Canada’s total population, but most federal jobs (and even many jobs in Ontario government) require fluency in French by 80% English speaking Canadians (that include immigrants). As a result, by default key positions in government bureucracy and key Ministeries go to Quebec largely due to their command in French language. So basically, system by-pass the most qualified and talented people (which account for 80% English speaking Canadian) from holding these positions due to their lack of fluency in French. As a result, Canada’s critical policy framework, competitiveness and growth continue to suffer due to this narrow and costly billingualism policy.
Canadians should not consider themselves unique in the world. When the inefficient Soviet empire can be disintegrated into small independent countries for future good of the citizens of that region, though for very different reasons, why should it not take place in Canada.
Independence, however, of a province or a region is a very costly proposition. A province should have resources to meet the requirements of running day to day administrations. It should have sufficient means to meet the given living standard of its citizens. It should have adequate economic and political weight to receive recognition in the international community.
Nevertheless, a province as an independent country would not necessarily lose its leverage in the world scene. The fact is that smaller the size of a country, greater would be the homogeneity in thoughts and values and better would be the achievements in economic domain. Many tiny Pacific Rim countries serve as examples. Various factors are responsible for their miracle economic growth, but the homogeneity of social values of their population — that come from their small sizes — is always considered as a crucial determinant. Like technology, efficiency or improvement comes through reduction in size: less input is needed to produce the same output or same input yields more output. Countries are no exceptions.
Most of the existing countries in the world are functioning on the notion of pre-industrial era of granularity, where vastness of natural resources is supposed to determine the importance of a nation in the globe. In fact, it is the level of GDP per capita together with the volume of export and import of a country with the rest of the world that determine the economic ranking of a country. In todays world, a region of common market union of small but efficient independent countries would carry more weight than a huge country with conglomeration of many inefficient provinces or regions. Therefore, the rest of Canada in the long-run would be better off with Quebec as a separate country. It would be able to direct its energy and resources more constructively towards higher economic goals. If Quebecers believe strongly in their cherished distinct culture and traditions, they would willingly accept the short-term discomfort of separation. The political peace and harmony would bring more economic prosperity in the future.
© Mahmood Iqbal and ipotpourri.wordpress.com: 2012