In a reply to Remo > Mario speaks out ....................If push comes to shove their money is then trapped in an asset they cannot easily carry away ... > Date: Sat, 10 May 2008 11:35:19 +0530 From: marie <[EMAIL PROTECTED]> > Have you considered that, while it is true they (the foreigners) cannot carry away "land" assets, they then sell off the land at a huge profit and carry away all of it to their home lands --total loss for India. > If an Indian buys land the money is just circulated within India -- with probable loss to Goa. > Mario responds: > Marie, I wonder if you have noticed that the most economically developed countries in the world allow and encourage foreign investments - the least developed countries discourage or do not allow them. Prior to India and China's "liberalization" development took place at a snail's pace, now both are booming from the influx of foreign investment. They have quickly reached a point where they are now investing in other countries. > Here are some thoughts without going too deep into how free markets and free trade benefit everyone. > Yes, foreign investors can sell their fixed assets and carry away their huge profits to their home lands or any other place where they think their money would be a better investment. However, once they take the trouble and risk to invest in fixed and long term assets investors must have a good reason to pull out - they don't do so on a whim. This is a good incentive for the host country to conduct its economic affairs in a positive manner, with pro-growth and reasonable-tax rate policies, so that foreign investors will have little incentive to pull out, more will have an incentive to come in, and both sides will benefit. This has been the US experience. The result is a 95% employment rate, a low inflation rate and steady long term growth. > In your example, there was apparently no Indian around to buy the asset "at the right price" when the seller was ready to sell, or they would have bought it in the first place. Avoiding a foreign investor and waiting for an Indian investor to show up is what leads to slow growth and stagnation. > If there is a wholesale flight of foreign investors from a country, it will lead to economic problems, but not if only a few withdraw and are replaced by others as will happen if the host country conducts itself in a positive manner with pro-growth and reasonable-tax-rate policies. > In the meantime, the foreign owner's money either came from being earned somewhere else or was earned from doing some business in India. If it came from outside, it added a foreign investment to India's economy. If it was earned in India it stayed in India. > The original Indian who sold the asset benefited, those who used it in the interim benefited from its use, and those who bought it, whether Indian or foreign obviously think the price is right, or they would not have bought it. So what if the foreign investor made a profit? Denying private investors a profit is what caused Marxism to collapse wherever it was tried. > Under free market principles, no one loses when buyers and sellers make their own enlightened decisions and negotiate a price acceptable to both sides, without coercion from a more powerful entity, like the government or other influential agency. > If you observed Goa before and since the influx of non-Goan money, it went from a sleepy backwater, with hundreds of thousands of Goans fleeing to other places to make a living for their families, to a booming economy where enterprising Goans can now stay home and make a living if they choose to. Of course, they now have to compete with non-Goan Indians. Those Goans that are doing so are doing very well -locals always have a built-in advantage from knowing the language and culture, which the outsiders have to learn. > The problem in Goa has been that there were no systems in place to control development, and corruption was rampant as it is throughout India. For example, until recently, a builder could not build higher than four stories across from Miramar Beach. Now, thanks partly to Babush, they can go as high as eight stories. That was not a positive development from an aesthetic and architectural and environmental point of view but the developers got rich because they could build more apartments on the same valuable plot of land. > Now, out of frustration, as we increasingly see on Goanet and from emotional personalities like Remo, Goans are demanding authoritarian separatist Marxist style solutions which a) they are unlikely to get in a democratic Indian state like Goa, and b) authoritarian style administrations fail in the long run because these depend on who seizes the authority - you may not like the ideas of those who get the power. > The only rational solutions will come from, a) studying how the developed democratic countries control development without discouraging or stopping it, and b) using those techniques and processes to help India get better organized. >