Integrated policies for industries
Tuesday, 31 March 2009
M. Karim
THE government is reportedly preparing a new industrial policy for the country. It is a welcome move. It is relevant to say that almost every elected government on coming to power, decides to unfurl a new policy of its own to guide industrial developments. But what have been the impacts of such planning on industrialisation, so far ? The effects of the policies have been far short of expectations.
For example, zoning was the declared part of every industrial policy since 1971. But this regulation was hardly observed in reality. Garments industries continue to sprout in residential areas. While plots in areas reserved for industrialisation remain empty, industries are seen getting established indiscriminately everywhere. Such unregulated industrial premises are gobbling up more and more of valuable lands meant for agriculture, residential and other purposes in this land-short country.
In this backdrop, the preparing on paper another industrial policy is not the challenge. The challenge is one of proper enforcement of such policies. Industrial policies so far introduced by different governments in the past read fine on paper. They were full of rosy projections and apparent concessions to potential industrialists.
But theories and concessions on paper do not facilitate so much such a vital objective as industrialisation. The attainment of it calls for recognising the hard realities or problems for what they are and effectively addressing them. What is important is an integrated response to grievances from industrial operators--existing or potential ones -- from the government involving not only the Ministry of Industries but other ministries as well. The goal should be, to draw up a plan, first of all, and then the ministries should coordinate and focus actions to try and achieve an improvement in the situation as a whole.
It is worthwhile to note here that sufficiency and reliability in the supply of power and gas are considered very important by industrial entrepreneurs. The Ministry of Energy will need to prioritise projects and coordinate plans and activities in tandem with other relevant ministries to go on increasing energy availability so that present needs are well met and capacities created to cater well to projected future demand.
The Home Ministry is presently engaged with the improvement of the law and order conditions. But it must do so with a vision, after consultations with representative bodies of the private sector, to get their views on how best to serve their needs. Special measures have to be taken by law enforcement bodies to guard businesses or industrial establishments round the clock and to respond immediately and effectively to any complaint about extortion attempt on any industrialist. These measures and associated activities can prove to be very helpful in positively motivating industrial entrepreneurs.
Supply of trained manpower to feed the changing nature of industries is also a problem. The creation of suitable manpower for industrial requirements is dependent again on the country's educational system. The Education Ministry, therefore, ought to push through projects that can put a pace to the creation of suitable manpower for increasingly meeting industrial needs.
Infrastructures are keys to promoting industrialisation . Government policies can create the inducements among private sector investors to invest in these infrastructures. Also the government should have a plan to build such infrastructures rapidly on its own. The capacities of existing infrastructures such as ports are very important for industries, specially the export-oriented industries. Government has a special role to play in this area.
Industries grow and thrive not only from conducive environment in respect of the above areas. Industrial growth is also critically linked to the government's fiscal and monetary policies. Industrial entrepreneurs are motivated better if the cost of funds or interest rates on borrowings remain reasonable or low. Taxes and charges need to be also of a kind that do not appear as harsh to industrial operators. Import duties that create anomalies by enabling the cheaper marketing of imported whole products in contrast with their locally made versions, can also create disincentives for their local producers. Thus, fiscal and monetary policies of the government need to help the creation of a level playing field for the local industrial producers.
THE government is reportedly preparing a new industrial policy for the country. It is a welcome move. It is relevant to say that almost every elected government on coming to power, decides to unfurl a new policy of its own to guide industrial developments. But what have been the impacts of such planning on industrialisation, so far ? The effects of the policies have been far short of expectations.
For example, zoning was the declared part of every industrial policy since 1971. But this regulation was hardly observed in reality. Garments industries continue to sprout in residential areas. While plots in areas reserved for industrialisation remain empty, industries are seen getting established indiscriminately everywhere. Such unregulated industrial premises are gobbling up more and more of valuable lands meant for agriculture, residential and other purposes in this land-short country.
In this backdrop, the preparing on paper another industrial policy is not the challenge. The challenge is one of proper enforcement of such policies. Industrial policies so far introduced by different governments in the past read fine on paper. They were full of rosy projections and apparent concessions to potential industrialists.
But theories and concessions on paper do not facilitate so much such a vital objective as industrialisation. The attainment of it calls for recognising the hard realities or problems for what they are and effectively addressing them. What is important is an integrated response to grievances from industrial operators--existing or potential ones -- from the government involving not only the Ministry of Industries but other ministries as well. The goal should be, to draw up a plan, first of all, and then the ministries should coordinate and focus actions to try and achieve an improvement in the situation as a whole.
It is worthwhile to note here that sufficiency and reliability in the supply of power and gas are considered very important by industrial entrepreneurs. The Ministry of Energy will need to prioritise projects and coordinate plans and activities in tandem with other relevant ministries to go on increasing energy availability so that present needs are well met and capacities created to cater well to projected future demand.
The Home Ministry is presently engaged with the improvement of the law and order conditions. But it must do so with a vision, after consultations with representative bodies of the private sector, to get their views on how best to serve their needs. Special measures have to be taken by law enforcement bodies to guard businesses or industrial establishments round the clock and to respond immediately and effectively to any complaint about extortion attempt on any industrialist. These measures and associated activities can prove to be very helpful in positively motivating industrial entrepreneurs.
Supply of trained manpower to feed the changing nature of industries is also a problem. The creation of suitable manpower for industrial requirements is dependent again on the country's educational system. The Education Ministry, therefore, ought to push through projects that can put a pace to the creation of suitable manpower for increasingly meeting industrial needs.
Infrastructures are keys to promoting industrialisation . Government policies can create the inducements among private sector investors to invest in these infrastructures. Also the government should have a plan to build such infrastructures rapidly on its own. The capacities of existing infrastructures such as ports are very important for industries, specially the export-oriented industries. Government has a special role to play in this area.
Industries grow and thrive not only from conducive environment in respect of the above areas. Industrial growth is also critically linked to the government's fiscal and monetary policies. Industrial entrepreneurs are motivated better if the cost of funds or interest rates on borrowings remain reasonable or low. Taxes and charges need to be also of a kind that do not appear as harsh to industrial operators. Import duties that create anomalies by enabling the cheaper marketing of imported whole products in contrast with their locally made versions, can also create disincentives for their local producers. Thus, fiscal and monetary policies of the government need to help the creation of a level playing field for the local industrial producers.