July 9, 1955
ject w h i c h he studies. He is e m p h a t i c
t h a t s t a t i s t i c a l association between
income levels a n d o t h e r c h a r a c t e r i s -
tics is no basis f o r a s s u m i n g t h a t
these c h a r a c t e r i s t i c s are causative
factors. He argues, therefore, t h a t
"the r e a l i z a t i o n of the extent to w h i c h
per capita income level is o n l y a s y m -
b o l of a w h o l e .socio-economic com-
plex of c o n d i t i o n s is i m m p o r t a n t as
w e l l as for a n a l y s i s of causes." P r o f
K u z n e t s m a k e s a careful e x a m i n a -
t i o n of the physical factors a n d the
f a c t o r of size a n d rinds t h a t t h o u g h
these m a y assist or create difficulties
in v a r i o u s w a y s , they c a n n o t be con-
sidered to be of p r i m a r y i m p o r t a n c e
as causative factors. It is w h e n he
Goa's Changed Economy
Y E A R ago Goa's economy was
f i r m a n d c o n f i d e n t l y based o n
a steady, i n c r e a s i n g e x p o r t of i r o n
a n d manganese ore a n d o t h e r local
produce, a s u b s t a n t i a l t o u r i s t traffic
a n d , n o t the least in i m p o r t a n c e , a
considerable trade in the i l l e g a l ex-
p o r t o f g o l d a n d l u x u r y goods t o
India. The p i c t u r e of Goa's eco-
n o m y is, today, r a d i c a l l y different.
T h e s i t u a t i o n has c h a n g e d to one of
u n c e r t a i n t y , a l a c k of e x p o r t de-
m a n d a n d m a r k e t s , serious h a n d i -
caps i n the i m p o r t o f essential items,
i n c r e a s i n g costs a n d a d r a s t i c Call
in contraband trade w i t h India.
Goa's balance of t r a d e has s h o w n
a h e a v y deficit in the past years;
its i m p o r t s b e i n g a l m o s t three t i m e s
the value o f its e x p o r t s . B u t the
difference represented the d e m a n d
o f the t o u r i s t a n d c o n t r a b a n d trades.
The balance o f t r a d e s t i l l continues
to show a h e a v y deficit b u t w i t h o u t
the resources to m a k e up the deficit.
Pattern of Trade Disrupted
Goa w a s m a i n l y dependent o n
I n d i a ; t h o u g h a customs b a r r i e r ex-
isted, Goa was p a r t of I n d i a ' s eco-
nomy. I t s surplus f o u n d a ready
m a r k e t i n I n d i a . T h e n o r m a l ex-
port channel f r o m Goa f o r such
c o m m o d i t i e s as salt, fish, betel nut,
coconut a n d mangoes l a y across the
g h a t s or by sea to I n d i a . Goa's
p r i n c i p a l i m p o r t r e q u i r e m e n t s , such
as, textiles, paper products, tea,
coffee, vegetable oils, f r e s h f r u i t ,
vegetables etc. were also m e t f r o m
India. T h e p o l i t i c a l s t r i f e i n Goa
has b r o u g h t i n its w a k e economic
measures l e a d i n g to a complete des-
takes a n h i s t o r i c a l v i e w o f develop-
m e n t s t h a t he is able to come nearer
t o a n u n d e r s t a n d i n g o f the p r o b -
lem. H i s conclusion t h a t p r i v a t e
enterprise on the one h a n d a n d a
d e m o c r a t i c p o l i t i c a l s y s t e m o n the
other are the f a c t o r s i n association
w i t h the i n d u s t r i a l system w h i c h
must be given p r i m a r y importance
i s significant, t h o u g h i t m a y n o t f i n d
acceptance f r o m a l l . H e insists t h a t
it is "dangerous to assume t h a t the
association o f r a p i d g r o w t h i n i n -
come levels w i t h free enterprise a n d
political democracy was an histori-
cal accident". P r o f K u z n e t s stresses
the sociological i m p l i c a t i o n s o f i n -
d u s t r i a l i z a t i o n a n d urges t h e econo-
m i s t and the s t a t i s t i c i a n t o w i d e n
(contributed)
truction of this pattern of trade.
W i t h a v i r t u a l ban o n i m p o r t i n t o
I n d i a f r o m Goa, there has been a
f e v e r i s h search f o r o t h e r e x p o r t
m a r k e t s M i d d l e East, P a k i s t a n a n d
C e y l o n have been e x p l o r e d but w i t h
l i t t l e success or if some d e m a n d has
been discovered, it is at prices b e l o w
economic levels. T o t a k e a n e x a m -
ple: Some e x p o r t of coconut has
t a k e n place to t h e M i d d l e E a s t areas
at prices r a n g i n g f r o m Rs. 60 to
Rs. 70 per t h o u s a n d a g a i n s t prices
in Goa, a year ago, of Rs. 140 a
t h o u s a n d . A g r i c u l t u r a l prices have
s l u m p e d d r a s t i c a l l y a n d the purchas-
i n g power o f the l a b o u r a n d l o w e r
a g r i c u l t u r a l classes severely reduced.
T h e last crop o f b e t e l n u t i s r o t t i n g
in godowns in Goa f o r w a n t of an
e x p o r t m a r k e t . T w o years' produc-
t i o n of salt continues to be held by
producers w h o because of orders by
the Portuguese G o v e r n m e n t of Goa
were unable t o c u r t a i l p r o d u c t i o n .
T h e m a n g o crop t h i s season has been
sold w i t h i n Goa a t o n e - t h i r d its n o r -
m a l e x p o r t price.
Starved of Essential Imports
T h e p a t t e r n o f i m p o r t t r a d e has
also changed. T h o u g h I n d i a has
stopped t r a d i n g w i t h Goa, she has
not applied sanctions y e t as in t h e
case of S o u t h A f r i c a . So Goa can
s t i l l g e t I n d i a n goods, a n d i t gets
them, but only by re-export f r o m
Ceylon, P a k i s t a n a n d such p o r t s as
A d e n a n d Singapore. T h i s , however,
is a c o s t l y process. Prices have, as
a r e s u l t of t r a n s h i p m e n t costs a n d
m i d d l e m e n ' s charges, increased b y
a f u r t h e r 20 per cent. Compared
822
THE ECONOMIC WEEKLY
his horizon, If he is to m a k e a v a l i d
c o n t r i b u t i o n i n t h i s field o f s t u d y .
T h e o t h e r essays i n the v o l u m e
discuss " R e t a r d a t i o n o f I n d u s t r i a l
Growth", "Economic Tendencies,
Past and Present" and "Foreign
E c o n o m i c R e l a t i o n s o f the U n i t e d
States a n d t h e i r I m p a c t upon the
D o m e s t i c E c o n o m y " . T h e y a l l bear
the i m p r i n t o f the s e a r c h i n g ana-
lysis a n d deep t h o u g h t w h i c h are so
obviously characteristic of Prof
Kuznets. T h a t i s w h a t m a k e s this
book e m i n e n t l y readable a n d m a k e s
one hope t h a t P r o f K u s n e t s w i l l
b r i n g together in book f o r m other
essays o f t h i s type h e m a y have
w r i t t e n t o enable the g e n e r a l reader
t o benefit f r o m his w o r k .
w i t h I n d i a n prices, prices i n Goa are
150 to 160 per cent h i g h e r . But
there is a n o t h e r p o i n t to n o t e : Sup-
plies f r o m a l t e r n a t i v e sources are
uncertain and only available when
those c o u n t r i e s have surpluses in re-
lation to their own demand. T r a n -
s h i p m e n t is dependent on a c a r g o
steamship, the M . V . L u a b o , a P o r t u -
guese c o m m e r c i a l l i n e r of 1400 tons.
w h i c h r u n s every f o r t n i g h t between
Goa a n d K a r a c h i , or, o n a n occa-
sional t r a m p f r o m Aden or Colombo.
Luxury Goods: No Buyers
P a r a d o x i c a l l y , as it m a y seem,
Goa's m a r k e t s c o n t i n u e to be stocked
w i t h a m p l e supplies o f l u x u r y goods,
s i l k a n d a r t - s i l k f a b r i c s , watches,
confectionery, wines a n d liqueurs,
perfumes a n d a v a r i e t y of other
goods w h i c h w e r e i n h e a v y d e m a n d
from tourists and visitors f r o m
India. M e r c h a n t s , a l t e r n a t i n g be-
t w e e n hopes of a r e t u r n to the f o r -
mer f r e e d o m o f t r a d e between I n d i a
a n d Goa w i t h a solution of the p o l i -
t i c a l c o n f l i c t a n d fears o f r e d u c i n g
t h e i r I m p o r t s lest the l o c a l G o v e r n -
m e n t consider it a sign of p o l i t i c a l
non-co-operation, have c o n t i n u e d to
place demands f o r i m p o r t s f r o m ab-
r o a d despite h i g h e r i n t e r e s t rates on
loans. Prices o f such l u x u r y goods
h a v e s l u m p e d by 10 to 15 per cent,
a n d stocks continue t o depreciate.
The earlier expectation t h a t a large
n u m b e r o f troops (there are a l m o s t
12,000 troops i n the t i n y c o l o n y )
w o u l d A l l i n t h e v o i d caused b y
absent t o u r i s t s has h a r d l y m a t e r i a l -
ised. T h e Portuguese troops, w h o
w a l k t h r o u g h t h e s h o p p i n g centres i n

p a n j i m a n d M a r g a o gazing a t the
windows, are n o t accustomed to lux-
u r y nor have they the money to buy
these l u x u r y goods.
No More Tourists or Contraband
The lack of tourists and visitors
resulting f r o m t r a v e l restrictions on
b o t h sides o f t h e f r o n t i e r a n d t h e
c o m p l e x i t i e s of a passport s y s t e m
h a v e been f e l t i n o t h e r direc-
t i o n s also. House-rente on the
sea-side are a f o u r t h of w h a t
t h e y used to be In past sea-
sons. Calangute, Goa's most
p o p u l a r sea-side report, w a s p a r t i -
c u l a r l y affected b y t h e absence o f
v i s i t o r s f r o m I n d i a a n d its beaches,
u s u a l l y c r o w d e d , were deserted a n d
its r e s t a u r a n t s h a d n o customers.
T a x i s were n o t i n d e m a n d a n d har-
b o u r a n d r a i l w a y coolies r e m a i n e d
idle. A m o r e s t r i n g e n t customs con-
t r o l o n the I n d i a n side t h a n h i t h e r t o
has g r e a t l y reduced s m u g g l i n g a n d
t h o u g h some goods s t i l l f i n d t h e i r
w a y t o I n d i a b y sea, the d e m a n d
f r o m organised traffickers is pro-
b a b l y reduced to a t e n t h of the f o r -
m e r level. G o l d , one o f the p r i n c i p a l
i t e m s i n the c o n t r a b a n d t r a d e , re-
m a i n s at a h e a v y discount, i n d i c a t -
i n g a l a c k of d e m a n d .
A sense of u n c e r t a i n t y a n d a fear
o f f u r t h e r d e t e r i o r a t i o n i n the eco-
n o m i c s i t u a t i o n i n Goa h a u n t the
business a n d m e r c h a n t c o m m u n i t y .
T h e o n l y steady f e a t u r e i n the eco-
n o m i c l i f e o f t h i s t i n y f o r e i g n pos-
session has been t h e c o n t i n u e d ex-
p o r t o f i r o n ore a t m o r e o r less t h e
same level as before. Manganese
ore exports have f a l l e n s u b s t a n t i a l l y
o w i n g to a lack of w o r l d demand.
H o w e v e r , m i n i n g costs have gorie
up due to heavier t r a n s p o r t charges
a n d G o v e r n m e n t taxes. U n e c o n o m i c
m i n e s h a v e g r a d u a l l y closed d o w n
a n d the entire e x p o r t t r a d e lies i n
the hands of half-a-dozen owners
w h o have the necessary c a p i t a l equip-
m e n t a n d f i n a n c e . The shortage o f
l a b o u r has led to h i g h e r wages, f u r -
ther affecting profits f r o m exploita-
t i o n . I n v e s t m e n t i n the m i n i n g i n -
dustry is h a r d l y as attractive today
as it was a couple of years ago
when veritable boom conditions
existed.
Quixotic Reaction
T h e Portuguese a d m i n i s t r a t i o n i n
Goa has reacted to the s i t u a t i o n
w i t h Quixotic valour. Two high-
powered technical missions have
come o u t f r o m L i s b o n , w i t h i n the
p a s t six m o n t h s , t o survey the a g r i -
c u l t u r a l s i t u a t i o n a n d the m i n i n g
i n d u s t r y i n Goa, D a m a n a n d D i u ;
b u t a p a r t f r o m expensive sugges-
t i o n s , t h e y have produced no concrete
i m p r o v e m e n t . T h e Goa G o v e r n m e n t
created, w i t h m u c h p u b l i c i t y , a n
July 9, 1955
" A g r i c u l t u r a l F r o n t " a n d appointed
a special c o m m i t t e e headed by a
European Director of Agriculture.
T h i s committee, too, a p a r t f r o m pro-
p a g a n d a a n d g r a n d i o s e speeches on
t h e d e s i r a b i l i t y o f a t t a i n i n g self-suffi-
ciency, has achieved l i t t l e o f p r a c t i -
cal value. There was some l o c a l
p r o d u c t i o n of vegetables at a price,
b u t i t served o n l y t o meet the re-
q u i r e m e n t s o f the troops. T h e Por-
tuguese G o v e r n m e n t also e m b a r k e d
o n t h e c r e a t i o n o f c o l d storage—
one at V a s c o - d a G a m a has a l r e a d y
come i n t o use—but a g a i n it meets
o n l y the r e q u i r e m e n t s o f the a r m y
s t a t i o n e d there.
E c o n o m i c c o n d i t i o n s in Goa, dis-
m a l a n d g l o o m y as they appear,
serve o n l y t o accentuate t h e p o l i t i -
cal s i t u a t i o n a n d t h e i n a b i l i t y o f
the Portuguese a d m i n i s t r a t i o n to see
t h i n g s f r o m the p o i n t o f v i e w o f
the genuine i n t e r e s t o f the c o u n t r y .
T h i s i s r e a l l y its p r i n c i p a l f a u l t —
namely, the s u b o r d i n a t i o n o f t h e
w e l f a r e o f the Goans t o i t s o w n
interests, a r i s i n g solely f r o m false
considerations of prestige. T h e fear
g r o w s t h a t there can be no real
change i n the s i t u a t i o n except f o r
the worse unless t h e p o l i t i c a l p r o -
b l e m finds a s o l u t i o n a n d t h a t is,
indeed, w h a t i s a g i t a t i n g m a n y
minds.