Editorial
Expansion of baseline industries
Level playing field indispensable
EVIDENTLY the local industry, particularly the light engineering, electrical and light electronics, is facing heavy odds, particularly in terms of uneven tax structure. And that is what is stunting its growth in Bangladesh. The plight of these industries was amply exposed at a roundtable on light engineering, electrical and electronic industries in Bangladesh held recently in Dhaka, organised by The Daily Star and the BUET Alumni Association, which came up with some very substantive suggestions in this regard.
It needs to be mentioned that these industries are variously known as mother / feeder industry, baseline linkage industry etc, which have an import substitution as well as export role. However, there are several impedimenta that ail these which the government must address urgently.
Protectionism is a much maligned concept in today's era of globalisation, but if the government wants to offset the huge imbalance of trade, it is only through import substitution and increase in exports will that be possible, and for which there is little option but to provide equitable conditions for these businesses to operate in. The regrettable feature is that, trade policies are heavily biased in favour of imports and against the local entrepreneurs. The local entrepreneurs do not want extra favours but a level playing field only, in order to be competitive against foreign goods, and find newer markets abroad.
The priority matter in this respect is for the government to provide policy as well as infrastructural support to the local manufacturers.
The government should consider restructuring the current tariff regime. It is quite extraordinary that the existing duties are in favour of the importers. One wonders what the reason might be, but the comments of the minister for industries, who happened to be present at the roundtable, and also of other experts with established credentials, that those who are involved in framing the tax structure are either ignorant or deliberately chose to be so, and that these people want to make Bangladesh a captive market, have very strong rationale behind their arguments. A case in point is the demise of local TV assembly plants that were doing brisk business but had to wind up after 2002 because of bad tax policy. Some suggest that it is big businessmen who influence policies for their benefit.
There are others essential support like roads and power that many of the industrial estates lack and which the government should make their primary concern.
We are happy to note the assurance of the minister that an industrial policy is in the making; we would hope that the concerns of local manufacturers would be reflected in the same.
There is little doubt that political commitment should also backup whatever policy is formulated. Failing that, we will continue to remain a captive market -- much to the detriment of the economic development of the country.
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