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Samina Sabir:Fdi imports technologies are causing environmental degradation

Samina Sabir, Associate Professor at the University of Azad Jammu &Kashmir, Pakistan

Dr Samina Sabir is the University of Azad Jammu &Kashmir, Pakistan UAJK is a tenured Associate Professor at Kashmir Institute of Economics. Her research interests focus on economics, employment, government policy and economic growth. She recently and the main research results include: the environmental quality and output volatility: south Asian economies, for example, and the foreign direct investment and environmental degradation: the role of political institutions, south Asian countries, the fiscal policy, system and inclusive growth: evidence from Asian developing countries, the globalization's influence on the ecological footprint (ecological area) : Empirical evidence from South Asian countries.

Fdi imports technologies that are inherently dirty and backward and are causing environmental degradation

Many South Asian countries are developing countries, with economic development as their core task. How do you think South Asian countries should balance the needs of economic development and emission reduction?

Since 2001, all countries have been expanding to accrue the benefits of globalization and free trade. Consequently some countries are getting better off through economic development and growth and some are worse off due to the drainage of resources from developing to developed countries. High-income countries are rapidly involved in the industrialization and dominated the world economies in the aftermath of globalization. Over time, developed countries have achieved the threshold level of income and now they are using the sophisticated method of production that are environmental friendly. However developing countries, for instance, South Asian countries have been trapped in low income and poverty and their major labor force indulge in agriculture sector based on traditional methods of production. Therefore fertilizers used in agriculture production consist of toxins and the burning of agricultural waste in the open field puts a lot of pressure on the environment and degrade it. Thus it is dangerous for human health and aqueous lives.

In South Asian countries, people have migrated from rural to unplanned urban areas. People in cities are working in informal economic activities to meet their basic needs. These countries have insufficient and inadequate infrastructure and therefore has less connectivity within the countries and across the countries to access markets for the sale of goods and services. Furthermore, South Asian economies could not tap the benefits of globalization because of the exports of primary commodities. However rapid urbanization has transformed the South Asian economies owing to the transition from agrarian to industrial sector coupled with poor physical and social infrastructure. It is pertinent to mention that the informal sector or shadow economy is absorbing 40 to 50 percent of the unemployed labor force in South Asian countries. However shadow economy is not covered by government regulations and their economic activities are a big threat to the environment and sustainable development. For instance, street vending is the source of self-employment for the marginalized household but it is using wood fire, and other types of fueling that are causing CO2 emission in the environment. Similarly, brick kilns are the source of employment for many of the unemployed labor force but they use motor tires, used automobile oils, plastic wrappers, etc. to set fire and these types of energy consumption have contagious impacts on the environment. Moreover, the increase in urbanization has increased the demand for energy, which is produced using fossil fuel, coal combustion, hydropower sources, and wind. In these countries, a major source of energy production is fossil fuel and coal that are deteriorating environmental quality that has threatened sustainability through increasing global warming.

Globalization has indulged South Asian countries to move towards industrialization. Expansion of industrial activities has increased the demand for energy being produced from the aforementioned sources and jeopardize the environmental quality through greenhouse gas emissions and global warming. Therefore, global warming causes climatic changes that lead to the depletion of the ozone layer, deforestation, increasing sea level, cloud burst, floods, cyclones, and droughts. There is a need for policy intervention to deal with environmental concerns of industrialization, for instance, environmentally friendly techniques should be used in economic activities to stop environmental degradation.

South Asian economies are developing economies and there exists a saving-investment gap. Therefore, they have to rely on external financial assistances from IMF and the World Bank and foreign direct investment from developed countries. FDI is also considered as catalyst for economic growth and development. But South Asian countries are the huge recipient of foreign capital inflows. But technology imported in the shadow of FDI is dirty in nature and outdated and it is causing environmental degradation.

Moreover, South Asian countries have been engaged in conflicts for a long time and they spend massively on military weapons for instance missiles, tanks, aircraft, and submarines, etc. and these weapons consume fossil fuel that is contaminating the environment. In this region, India and Pakistan have fought three major wars and there is ongoing tension on the borders owing to Kashmir conflicts. Any type of war does not only damage physical and human capital but it has bitter consequences for the preservation of the environment.

In the light of aforementioned discussion, there is need to switch to the green method of production to preserve the environment. South Asian economies should change the techniques of energy production that are environment friendly. Non-renewable energy should be changes with renewable energy to circumvent natural disasters. Stringent environment regulation should be framed and imposed to check the standard of the technology.

Interviewer: Deng Baoyi

Interview date: October 19, 2021

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