The Financial Express

Post-LDC challenges and new industrial policy

| Updated: January 24, 2022 22:06:49

Post-LDC challenges and new industrial policy

One can hardly blame the government for not planning enough sector-based policies. But it often faces criticism for its failure to execute the same properly. The national Industrial policy, framed in an irregular gap, is one such instrument of great import. The standing committee on industry and industrial policy of the country's apex trade body---the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) --- at a meeting last week questioned the legal strength of the industrial policies prepared so far and inadequacies in their implementation.

The upcoming national industrial policy is seen as an important piece of work in the context of the country's graduation from a least developed country (LDC) in 2026. The new industrial policy that is expected to be approved soon will have to pave the way for industrialization in the right perspective. The new policy will have to face effectively the post-graduation challenges as far as the export market is concerned. Unforeseen challenges may also emerge. The government and the private sector will have to remain prepared to address those together.

Following LDC graduation, the country will invariably face preference erosion in the export market. The concessions that the country is enjoying now in the matter of intellectual property rights (IPR) and the trade-related intellectual property rights (TRIPS) will also be curtailed to a large extent. Unless befitting measures enough to compensate for the losses are there, much of the satisfaction to be gained through LDC graduation would evaporate. In addition to putting up special efforts for strengthening the process of industrialization through an appropriate industrial policy, the government needs to take measures for skill development both at the workers' and managerial levels. The dearth of skilled manpower, particularly in manufacturing, remains a major problem.

Research and development (R&D) has been a neglected area for a long period. Both the private and the public sectors have not paid due attention to it and the country is now paying for this gross negligence. Sufficient resources, thus, need to be invested in R&D to help innovation in important sectors of the economy. This is all the more necessary to meet the Fourth Industrial Revolution (4R) requirements.

Every policy, be it national or otherwise, is designed to achieve certain goals. The objectives of a policy can only be achieved if it followed meticulously the guidelines incorporated into it. This is also true for industrial policy. One of the basic objectives of the industrial policy should be to make industrial enterprises competitive by cutting their cost of operations. This is an area where the experience of the industrial entrepreneurs has not been that palatable because of the conflict between the industrial policy guideline and the fiscal and other policy measures of the government.

It is thus imperative for the Ministry of Industry and relevant other agencies to maintain strong coordination in the matters of fulfilling industrial policy objectives. The new industrial policy is now in draft form. Before its finalization, its formulators should review the outcome of the past policies and problems encountered during the implementation of those. The new industrial policy needs to give special attention to the cottage, small and medium enterprises that are seen as an important and integral part of the country's economy.

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