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Giving a voice to the industry

By Dr. Sabur Ghayur

The process of globalization and liberalization by virtue of removing tariff and non-tariff barriers to trade and services is linked with opening up wide opportunities for the manufacturing and services sector to penetrate in the export market. The monumental growth of China is testimony to this phenomenon. Few other developing countries – Brazil, India, Russia, Mexico, Vietnam, South Africa, etc. – have also demonstrated sustaining their successes in tapping the vast opportunities.

In addition to the presence of an effective and efficient government capable of ensuring rule of law, continuity of policies, well-defined property rights, institutional arrangement for enforcement of contracts, speedy settlement of disputes, well developed physical infra-structure and financial institutions; many of such countries boast of greater and effective integration of the representatives of industry in developing related policies. 

The Confederation of British Industry (CBI) is the representative body of the British industry. In the process of becoming “one voice” of the industry, the Federation of British Industries (FBIs), the British Employers Confederation (BEC) and the National Association of British Manufacturers (NABMs) merged together.

In Malaysia, the Ministry of Industry and Trade (MITI) are known for providing greater access and say to the industry in policy design and change. In fact, the overseas visits of MITI ministers invariably have representatives of industry, as important part of the delegation.

It is well known that all industrial countries do have representative organizations with the aim to champion manufacturing and the country’s manufacturing sector. There is also grouping of countries boasting a collective voice and body for the industry, such as: the Confederation of European Industries (CEIs). The CEIs is collectively supporting the interests of its member countries in the European region.

As for the Organization for Economic Cooperation and Development (OECD), no policy is developed without an effective involvement of the representatives of industry and its workers. In fact, both of them are represented at the OECD through their respective advisory bodies.

The major regional blocks also do have greater and effective involvement of the industry representatives in their deliberations and policies. In case of Asia Pacific Economic Cooperation (APEC), for example, a group of countries comprising of industrialized and developing countries across the Asia-Pacific rim – including China, Japan and Korea from Asia, as well as USA, Canada, Chile, Mexico, Australia, New Zealand and Papua New Guinea – the annual assemblage of leadership invariably meets the industry representatives. The private sector’s APEC Business Forum has official recognition and given importance as the focus of APEC is promoting economic, business and industry cooperation. The APEC, it is important to note, covers a population of more than two-third of the globe, over three-fifths of the GDP and about half of the global trade.

Another regional group – sort of a reaction to APEC by Europeans, is the Asia Europe Meeting (ASEM). It has been established primarily on the demand of the industry from Europe. Meeting bi-annually, the ASEAN+3 from Asia and European countries, the focus of ASEM is on developing cooperation on the basis of three pillars, namely: political, cultural and economic. Here again, industry representatives and private sector is given prominence.

In contrast, there exists a number of regional blocks – such as South Asian Association for Regional Cooperation (Saarc), Economic Cooperation Organization (ECO), etc – in addition to a large number of countries including Pakistan that have precisely displayed the opposite. Policies essentially meant for industry and manufacturing are designed, implemented and changed without giving any significant space to the industry to raise their voice or concerns. Take for example the oscillating attitude of the government on the imports of second hand cars and the adverse impact on domestic automobile, as well as associated vendor industry. Reactive responses from the industry are the only way available to them to seek remedial measures. But this is neither sustainable nor desirable. Many attribute that the poor state of industry and manufacturing and the “de-industrialization” process being witnessed in Pakistan in this era of deregulation and liberalization also to a lack of combined voice of the industry.

Even in our traditional cotton sector, value addition for the export market is largely dominated by thread and coarse cloth. Ready-made garments are being replaced by increasing imports from South East Asian countries, Bangladesh and even China. There is also decline, at best, stagnation in the exports of sports and surgical goods. Despite being in the top ten producers of major crops including sugarcane, we have become a sugar importing country.

It is sadly noted that our industry has been put to “destructive distillation” mode resulting into industrial contraction. Several sectors of the industry are closing down. This is also creating serious employment problems that are disruptive socially and politically.

It is perhaps the right time for the industry participants to seriously ponder over the pros and cons of a dedicated body for the industry representing and striving for the growth and modernization of the industry. An apex national organization – leading and representing industry – exclusively meant for development, modernization and strengthening of the whole industrial sector in the county as well as providing a forum for policy dialogue and advocacy. Let us give a collective voice to the industry.

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August 8, 2010 - Posted by | Uncategorized

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