A Self Reliant Economy in the Maritimes - What does it Mean?

by John Odenthal

When Maritimers talk publicly about their livelihood, their businesses, their jobs and what we must do to survive and prosper in a confusing global economy, there are a few recurring themes. They go like this -- self-reliance and less dependency on central government: we cannot depend on anyone else to get us there; create our own destiny; invest in our own resources; we can do it ourselves. These are not new ideas in the Maritimes, and who would disagree with them?

Now we need to get beyond the platitudes. We need to turn up the level of discussion, because ready or not, "self reliance" will soon be a fact in the Maritimes.

Why? Because the Feds are rapidly pulling up more and more stakes -- due to deficits and the rest of it.

But what does it actually mean in a world where some governments play a successful albeit subtle role in how the local economy develops? Or putting it another way, where does "self-reliance" simply become isolation? And more simply, how do we see beyond our jargon about all this stuff?.

In this and future columns, I hope to go beyond conventional wisdom about our future options in the Maritimes. In this issue, I will only offer some underlying questions, questions for which no one really has an answer. Maybe it will help clarify a little of the confusing, circular logic that we often hear about economic growth. Armchair economists like each of us might assume that certain economic ideas, such as how markets work, are laws of the universe. The experience of other regions and nations inrecent years shows that money and markets don't follow the "normal" rules of the game in smaller regions of developed countries, no matter how long we wait. Theories on how small regions and nations develop wealth are plentiful, and sometimes pretty shallow, but like religion they are often defended to the death.

Just what does "economic self-reliance" actually mean for a small, thinly populated region like the Maritime?

Its common sense that we can't produce everything we need in the Maritimes. Weshouldn't try to grow our own grapefruits here for example, or even manufacture the television sets we need for our own market. But what about publicly investing in our own entertainment, culture, or tourism industries? And there are more thorny issues,issues that make both public leaders and private managers uneasy! For example, it maybe that mutual dependency among certain partners, say between some key industries and governments, may be intelligent in some instances, but not in others. Lets call these relationships what they could be - strategic alliances. There are numerous old and new examples around the world of where this has been very beneficial. But in whatform?

"Government" is currently a dirty word in North America. Ross Perot and Preston Manning provide simple answers to the "problem" of government. But economists (in English speaking countries) have to take some of the blame. There are certain economic "commandments" that we must think twice about. For instance, the current Anglo-American approach to economic growth is open to question. This approach tends to fixate on prices; keeping prices and costs the lowest, and consumption the highest is more important than producing things. So all you need for economic development is free trade, deregulation, and privatization of public services to keep prices down.

But there are some very successful economies such as Japan, Germany, Iceland, Taiwan, and Thailand that have tried something quite different. The focus in these recently successful economies has been more on producing and developing certain key industries (such as microchips in Japan). To accomplish this they are willing to accept higher prices for these key products at home in the short run, by limiting foreign competition while investing heavily. This approach is highly controversial of course, especially among Anglo-American industrial and government leaders.

The pros and cons of this approach to economic development are many, but the point isthat "self reliance" in the Maritimes may not mean that less involvement with a national government the better. Instead, the nature of the dependency, or our reliance on Ottawa, must change dramatically. There are mutual benefits to be gained from a more realistic alliance. This is true whether it is with current Federal-provincial structure, or in a looser union such as we see between nations of the European union.

So self-reliance in the Maritimes is something we need to embrace more -- we can domore for ourselves. But we could be foolhardy and assume we don't need allies, norintelligent relationships with our economic and political partners, including the Feder algovernment. In the latter part of this century, the successful small regions or nations have gone beyond ideology and bluster about their independence. They understand that their internal economic strength is the key to development no matter how small they are. But they also know they need intelligent relations and mutual support with central governments, neighbours, and other allies. This is because the boundary between nations, and between private and public sectors is becoming more blurry. More difficult to accept is the fact that the textbook rules of economic growth that are prevalent in English speaking countries are wearing a little thin.