State protection of industries?
November 19, 2008
Because of various reasons, businesses and industries in Bangladesh are facing a decline over the last 2 years and so, are demanding protection of various sorts from the State. Most of these reasons for the decline are beyond the control of our State such as the sudden rise and fall of fossil fuels, the rise and fall of commodity prices, the rise and fall of metals and minerals, the sudden crisis in US and European financial markets and the consequent economic recession. If anything, all of this goes to prove that the world’s economy is inter-linked in such a way that a major crisis in a couple of major economies has a snow-balling effect in other economies in diverse parts of the globe. Bangladesh being, in these terms, almost a miniscule economy is likely to be affected in more than one ways and there is very little that our State and our governments can do about it.
Industries, private enterprises and businesses play a big but not pivotal role in our economy; that pivotal role is played by our agriculture which not only provides us with the basic, the “survival” need of food but also employs most of our people who live in rural-agricultural areas. Industries, private enterprises and businesses employ a considerable number of people, pay revenues and taxes to the State, trade in commodities and provide us with goods, commodities and products which are in many ways essential to our living. However, when such industries, private enterprises and businesses ask for “protection” from the State and the government they have to realize the fact that the economy of Bangladesh is neither self-sufficient nor self-sustaining but is entirely dependent on economies of other countries and on financial support of many international financial organizations and donors. Consider, for example, the fact that if our government raises import tariffs on goods which compete with goods produced by our industries locally, as the local steel, re-rolling and ship-breakers are demanding, the other country, in this case India will immediately retaliate by raising export tariffs on rice making the availability of rice extremely costly - we cannot quite obviously live with that. Therefore, protectionism is not the answer to the problems of our industries, private enterprises and businesses and they have to begin to realize that, if they intend to survive in a world where competition over price and quality of goods bought and sold is cut-throat, to say the least.
Quite obviously then, our industries, private enterprises and businesses have to become competitive through increased efficiency in production of goods and services because people will invariably buy goods which are better but cheaper and in doing so they will not be bothered about where it comes from - patriotism doesn’t extend to the economy. If our industries, private enterprises and businesses cannot compete with better but cheaper goods and services coming in from other countries, they will have to go under and be wiped out as is happening with industries, private enterprises and businesses every day, everywhere in the world - competition, for survival, is the key-word for a capitalist economic system and only the most competitive and the best survive in such an environment. Since, by common consent, we have all opted for a “capitalist economic system” over the last 25 years, we have now to live or die with it.
Source: The Bangladesh Today
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