The price of exports

The reason why government export promotion is wrong in principle begins with a simple observation: Everything has a price. Whenever a minister jets off to Indonesia, or China or Saudi Arabia to secure a contract for a private firm, the question that should be asked but almost never is, is what price the minister is paying. It is in the minister's interest only to emphasize the benefit of his venture, usually in terms of jobs created or income earned. But buyers of exports are rarely fools, swayed merely by a minister's flattery. The extract a price. After all, there are plenty of other minister-salesmen clamoring for the buyer's attention.

Are not exports the modern holy grail, proof of a country's competitiveness? This is just a new form of the oldest mercantilist myth. There is nothing magic about exports; they are simply a necessary means to pay for imports.

-- The Economist, London