Thoughts on Economics Vol. 20, No.
Bangladesh Industrial Policy 2010: A Critical Appraisal
Ayubur Rahman Bhuyan1 [Abstract: The draft industrial policy (2010) of Bangladesh, announced recently, proposes an integrated strategy of economic growth through rapid industrialization. It envisages an increase in the industry sector’s share in GDP to 40 percent by 2021, with the proportion of the workforce employed in the sector concurrently rising to 25 percent of the country’s total labour force. While many of the provisions of the proposed policy were common to previous policies as well, it has brought some improvements over the immediate past (2005) industrial policy, in particular about the classification of industry and redefinition of industry size in terms of both fixed capital and the employment of labour. This paper, however, expresses some reservations about certain provisions in the proposed policy, for example, those regarding thrust sector and regulated industries, the revival of sick industries, and a guarded approach to divesting public sector enterprises merely for purpose of protecting jobs. The paper attributes the failure of past industrial policies to boost industrial growth to the policy makers’ inability to address the many structural impediments and policy failures that slowed down the pace of industrial activity. The paper expresses optimism that if the structural impediments and policy obstacles that retarded industrial growth in the past were removed, the industrial sector in Bangladesh could be expected to achieve a double-digit growth and come closer to reaching the target of raising the industry sector’s share in GDP to 35-40 percent in the next decade.]
Government announced a draft Industrial Policy on 5 September 2010. The Cabinet Committee has already okayed the draft policy, which is now awaiting parliamentary approval. When approved by the Parliament, the new policy will replace the previous industrial policy announced in March 2005. Government believes that rapid industrialization is key to the country’s economic development.2 A densely populated country with a population of
Former Professor of Economics at the University of Dhaka. While the pace of industrialization in developing countries depends in a large measure on factors like factor and resource endowment, country size, geographical location, social mores,
Section III briefly mentions the industrial policy provisions regarding reclassification of industry and re-definition of industry size. The policy reiterates the country’s well-publicized desire to achieve the status of a middle-income country by 2021. A critical evaluation of the just-announced draft industrial policy is the objective of the paper. To alleviate poverty by creating additional employment opportunities. medium-. and the implementation. monitoring and evaluation of projects. The proposed industrial policy presents an integrated strategy for achieving high economic growth in the country through rapid industrialization. its goals. and long-term measures.
. institutional arrangements for expanding industrial activity. Concluding observations and suggestions for improvements in the Policy appear in the fifth and final section.
and international environment.and poverty-stricken people by 2017. It has been prepared taking into consideration the government’s determination to achieve the Millennium Development Goals (MDGs) by 2015. industrial policy plays a crucial role in influencing industrial growth (James. the population density per square kilometer of cultivated land is 1600. and strategies proposed to achieve the desired policy objectives.8
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around 150 million living on a land area of 147570 square kilometer (56977 square miles). and halve the number of the unemployed and hunger. Section II highlights the salient features of the Policy. Section IV presents a critical appraisal of the proposed Policy. investment incentives. It envisages rapid industrialization through short-. it is hardly possible that the growing labor force can ever be absorbed in the agriculture sector. 1987). unless the country’s industrial sector is sufficiently developed and expanded to create additional employment opportunities. 3 While the population density per square kilometer of total area in Bangladesh is 977. which accounts for a fifth of GDP but provides employment to as much as 50 percent of the country’s labor force. Given the unfavorable land-man ratio and the under-developed state of the country’s agriculture sector. and Meier. 2005]. the key to the generation of productive employment lies in strong economic growth through the structural transformation of the economy away from agriculture and toward industry [Bhuyan. The proposed policy puts emphasis on private sector industrialization efforts but at the same time vows to reform the public sector enterprises to make them profitable.3 its economy is dependent mainly on agriculture. Since the country’s population and labor force are growing rapidly every year. and 10 percent in 2017 and thereafter. Naya. the proposed policy aims to create job for at least one man per family. for raising the rate of GDP growth to 8 percent by 2013.
To create higher value addition in exports. Policy Goals. the new policy will encourage transforming resource-based export industries into process-based ones. Public investment shall be limited only to sectors considered crucial on grounds of national security and in areas that might have a crowding-in effect on private sector investment. the new Policy shall make available adequate opportunities for establishing both importsubstituting industries that will cater for the domestic market and expanding and developing export-oriented ones. gas and water. Objectives and Strategies
The proposed industrial policy envisages an increase in the industry sector’s share in GDP to 40 percent by 2021 from the present 28 percent. medium and cottage industries. and labour-intensive industries will receive priorities in matters of getting fiscal and other incentives. and seeks to raise the proportion of the workforce employed in industry to 25 percent of the country’s total labour force by 2021 from 16 percent now. rail transport and telecommunications. Steps will be taken to raise investment in the tourism industry and raise its efficiency. To that end. to boost economic growth through creating more jobs. A special law will be enacted for these purposes. ceramics and pharmaceutical ingredients. The growth and expansion of the private sector will therefore be the main objective of the industrial policy. it proposes to set up separate economic zones for sectors such as textiles. it recommends for establishing Economic Zones. HighTech Parks. The proposed Policy relies on the premise that a vibrant and dynamic private sector is the key to the country’s rapid industrial growth. Agro-based. Government will only play the role of a facilitator. including giving encouragements to women entrepreneurs. and other physical infrastructure like road. In particular. The Policy gives priority to providing the industrial sector with adequate facilities of electricity. To ensure the growth and expansion of the industrial sector. The establishment and balanced development of industries in different geographical regions of the country is a core objective of the Policy. food processing. It encourages the growth of SMEs in rural areas to reduce the pressure of migration to urban areas. The new Policy encourages the privatization of public sector enterprises (PSEs) but in the event the government considers it necessary to retain certain
. Industrial Parks. The Policy puts emphasis on the development of small.Thoughts on Economics
II. and Private EPZs for rapid and balanced industrial development of the country.
these enterprises will be encouraged as complementary and competitive to private sector industries. Government shall not undertake any new projects to replace sick industries without settling their liabilities. It will also seek to improve the management of public sector cotton textile mills to make them efficient and profitable. Institutional Arrangements for Industrial Expansion. imposes a condition that. may be converted into public limited companies to make them efficient. Cottage and micro
. Funds will be arranged under PPP initiatives for developing infrastructure for industrial clusters. Under the Policy. while privatizing PSEs. and profitable. Classification of Industry and Redefinition of Industry Size. and taking measures to make jute industries profitable. and setting up environment-friendly industries. Medium and Small.1 Industry Classification and Redefinition of Industry Size The proposed Policy classifies industries into five categories: Large. and Implementation and Monitoring Mechanism
3. however. elevated expressways. in favour of adopting appropriate reforms in the jute sector. competitive. diversifying the uses of jute. and Micro. on a case to case basis. Small. alternative employment of workers that are likely to become redundant after privatization should be ensured. The industrial policy of 2005 classified industries into only three categories: Large. To that end. if found potentially viable. the development of labour-intensive industries. Sick industries.10
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PSEs in the public sector. Government will ensure that the industrialization process is environmentfriendly and conforms to specific WTO agreements and standards. The policy will provide necessary protection to local industries from unfair competition from dumped or smuggled imports. Cottage. Public Private Partnership (PPP) shall be an important element in the proposed industrial policy. PPP projects like flyovers. but at the same time formulate a law to rid the nation of sick industries. The Policy. underground rail.
III. industrial parks. however. It will formulate appropriate measures to tackle problems of sick industries and devise an exit policy for industries that have long remained sick. The new Policy seeks to make the industrial sector environment-friendly and encourage industrial enterprises to adopt pollution control measures. It will adopt appropriate measures to rehabilitate sick industries. Medium. The new Policy is. monorail. economic zones etc will be approved under the Private Sector Infrastructure Guidelines. Investment Incentives.
accelerated depreciation allowances. The number of ‘Reserved industries’ (industries reserved for only public sector investment). tax at reduced rates. the proposed Policy has given a uniform definition of the size (large.Thoughts on Economics
industries are new additions in the industry classification under the 2010 Policy. There are 17 industries in the list. remains unchanged at 4 (four) – the same as in the 2005 policy. 3. except the three hill districts. enjoy 100% tax exemption in the first two years. The prevailing tax holiday facilities (valid until 30 June 2011) shall continue under the proposed Policy. The industrial policy of 2011 has introduced a list of ‘Regulated industries’. public health. In addition to reclassifying industries. raising their number to 30. small. incentives for NRBs. etc. 50% tax exemption in the next two years. medium.. which. viz. tax holiday. shall be eligible for receiving these special incentives. Government will frame rules from time to time for these regulated industries. These industries shall be eligible for special fiscal incentives and supports. tax exemption. and cottage) of Manufacturing and Service industries in terms of both fixed capital and labour employment..2 Investment Incentives There is a long list of tax incentives in the proposed policy.. The new policy includes more industries in the category of ‘Service industries’. The proposed Policy provides for special incentives to encourage Women Entrepreneurs. from 19 in the 2005 and 5 in the 1999 policy. The number of ‘Thrust Sector industries’ has been brought down to 30 in the 2010 policy from 33 in the 2005 policy. viz. Women entrepreneurs. have high growth potential. according to the framers of the Policy. The Industrial Policy 2010 allows the private sector to set up such regulated industries. but only subject to government rules and only with the express approval of the government. who may either be sole proprietors or hold 51 percent of shares in partnership or joint stock companies. which will be regulated because of concerns over national security or to protect the environment. equal treatment for local and foreign investors etc. however. industrial establishments in Dhaka and Chittagong Divisions. and 25% tax
. tax exemption. tax policy benefits. and national interest. At present. and perhaps easier access to credit facilities from banks on concessional terms. Thrust sector industries are those industries. avoidance of double taxation.
Sylhet and Barisal Divisions and the 3 hill districts. The Ministry of Industries shall be the focal point for the promotion of industrial activity. The customs duty rates in force are 2.12
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exemption in the fifth and final year. 5% for basic raw materials. The provision of accelerated depreciation allowances shall continue until 30 June 2010. delays and red tape in decision-making to give prompt services to investors. and 25% in the seventh and final year.and long-term measures for the development of the industrial sector and to devise workable and efficient institutional arrangements for expanding industrial activity and a mechanism to monitor the progress in the implementation of industrial sector projects. Bangladesh Institute of Technical Assistance Centre (BITAC). and 25% for finished products. The new Policy will ensure that investors can invest without any hassles and undesirable official interference. The new Policy will encourage both foreign and domestic investment. It calls for the simplification of investment sanctioning procedures and for the removal of all legal complexities. prevailing tax exemptions are 100% in the first three years. the policy recommends institutional reforms in banks and financial institutions. 10% for intermediate products. Small and Cottage Industry Training Institute (SCITI). Khulna. Training Institute for Chemical Industries (TICI). 3. The Board of Investment (BOI) shall be the main agency to assist and develop private sector industrial investment. The Policy seeks to make the programmes of different training institutes under different ministries engaged in human resource development more dynamic and effective. In the case of Rajshahi.5% for machinery and spare parts. 50% in the next three years. National Productivity Organization (NPO).3 Institutional Arrangements for Expanding Industrial Activity The Policy proposes to adopt well-conceived medium. The capital market shall be strengthened to enable it raise more industrial investment from the secondary market. To meet the demand for industrial term loans. BSCIC and EPZs will allot industrial plots in their respective areas. The prevailing four-tier customs duty rate structure shall also continue under the proposed industrial policy. The training institutes named in the Policy are Bangladesh Institute of Management (BIM). It will seek to rationalize existing incentives to attract investment in sectors in which the country has a comparative advantage. National Hotel and Tourism Training Institute (NHTTI) of
A Critical Appraisal of the Industrial Policy 2010
4. different training institutes under Jute and Textile Ministries and the Corporations under them.4 and 16. 3.
IV. NCID shall meet at least once in six months. and other training institutes under Bangladesh Handloom Board and Bangladesh Sericulture Board. The 2010 Policy has also brought an improvement over the 2005 policy by changing the classification of Industry and giving a new definition of industry size. 1) It recognizes the dominant role of the private sector in industrial development in which the government will act only as a facilitator. Thus. 2) It lays emphasis on both export orientated and import substituting industries and raising their competitiveness in both domestic and international markets. There shall be a 24-member executive committee of the NCID (ECNCID) with the Industries Minister as its convener. and for promoting agro-based and foodprocessing industries. For example.1 Reclassification of Industry and Redefinition of Industry Size A welcome feature of the 2010 industrial policy is that it retains all the good provisions of the 2005 policy. Programmes and action plans of various private sector organizations shall be utilized for effective implementation of the 2010 industrial policy.7) to the Bangladesh Better Business Forum (BBBF) and the Regulatory Reforms Commission (RRC) (formed during the latest Caretaker Government regime) to promote contact and cooperation between industrialists and government policymakers and create a conducive business environment. Monitoring and Evaluation A high-level 15-member body – National Council for Industrial Development (NCID) – with the Prime Minister as president and the Industries Minister as vice-president is proposed in the Policy. There shall be a coordination committee (comprising 18 members) to coordinate activities of different government organizations. The Policy refers (paragraphs 16.Thoughts on Economics
Bangladesh Tourism Corporation. 3) It proposes to give special incentives and support measures to assist women entrepreneurs.
2 Thrust Sector Industries In order to turn the industrial sector into a major instrument of economic growth. small. and the size of nonmanufacturing industries in terms of the employment of workers. for purpose of ascertaining the presence of anticompetitive or monopoly practices. 7) The industry-related people would also welcome the redefinition of industry size because. medium. Although the number of thrust sector industries in the new Policy is fewer (30) than in the 2005 policy (33). and small. 2) The 2010 policy has also changed the size definition of manufacturing and non-manufacturing industries. and high-tech industries. The rationale behind the long list of thrust sector industries is difficult to understand. 4. which do not produce standardized products. medium. the new industrial policy has made a long list of thrust sector industries. The 2005 policy classified only three – large. of course. the list is still large. 1) The list. includes some industries with high potential. require only small amounts of capital. 6) The reclassification of industries in the new Policy shall enable micro and high-tech industries avail of the facilities catering for their special needs and problems. and have very small markets for their products.
. 4) The 2010 policy has redefined all types of industries – whether manufacturing or non-manufacturing (service) – in terms of both fixed capital and the employment of labor. 3) The 2005 policy defined the size of manufacturing industries in terms of the amount of fixed capital investment. 2) The long list of Thrust industries may in fact detract attention from the relatively more important ones that genuinely need significant fiscal. even unwieldy. but there are others. 5) The industry-related people would definitely appreciate the 2010 industrial policy provision that has recognized micro and high-tech industries as separate categories of industry. both capital and employment of labour are necessary to measure the true size of industrial enterprises. micro.14
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1) The 2010 policy classifies industry into five categories – large. financial and infrastructural support.
development and maintenance of essential infrastructure and utilities in which the private sector is unlikely to show any interest. regulations pertaining to environment. 3) The sphere of Government should be limited essentially to the provision. when garments and leather industries were declared as thrust sectors in the past. 5) On these considerations. many enterprises took advantages of their being so designated and were able to obtain huge amounts of bank loans but later turned loan defaulters. This provision will require government to frame wide-ranging rules to regulate the related industries thereby increasing the sphere of government. implemented efficiently. which will create confusion among new entrepreneurs that will need guaranteed access to the declared incentives. 5) Regulations that are necessary. To cite an example. 2) The highly restrictive provision that the registering authorities – BOI. BSCIC.Thoughts on Economics
3) Moreover. 6) The list of regulated industries may therefore be shortened and contain fewer and a limited number of industries.4 Policy Contradictions about Private and Public Sector Involvement
. – shall not register the regulated industries without the express approval of the concerned Ministry/Organization could hinder private sector initiative. for example. 4. 4. 4) Declaring some industries as belonging to the thrust sector is not without peril. should be set realistic goals. BEPZA etc. and subjected to periodic review. Many banks suffered as a result. the proposed Policy makes incentives for the thrust sector industries conditional to their performance and contribution to the economy.3 Regulated Industries 1) The proposed industrial policy includes a large number of industries (17 in all) in the list of Regulated Industries. limiting the thrust sectors to a few promising industries would be more realistic and meaningful. The incentives will thus not be automatic. and worker health and safety policies. 4) All unnecessary regulations should therefore be withdrawn. whereas the declared objective and strategy of the industrial policy is to enhance the role of the private sector in industrial activity.
It is learnt that in the Agrani Bank alone. Usually in the advanced countries. government has submitted a proposal to forgive defaulted loan worth Taka 1 crore.5 Public Private Partnership (PPP) 1. there is an official move to forgive the defaulted loans in the name of reviving the jute industry. 2) It is hardly likely that an SOE will ever behave like a profit-seeking entity and improve its efficiency. 5) Given the continuing operating losses of SOEs. Government should not therefore get involved in running businesses. 6) A proper solution of the problem of the ailing SOEs is their outright privatization. 4) A lot of bad debt was created in the decade of the 1980s in the name of rescuing the ailing jute industry. On the one hand. 4. Government will need to act expeditiously to devise a transparent mechanism and frame well-defined rules for participating in and mobilizing funds for the PPP projects. specialized financial institutions. Its role should be that of a facilitator instead. and international financial institutions. At the moment. it recognizes the role of a vibrant private sector in industrial growth. and in those countries the 70% debt are generally funded by commercial banks. 3) It is common knowledge that a market economy cannot thrive if there is a large presence of SOEs.
. but on the other hand it plans to go ahead with SOEs and calls for raising their profitability. 2. 3. too.16
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1) The proposed industrial policy suffers from a contradiction. The emphasis on PPP in the proposed industrial policy is laudable but the concept is still in a rudimentary stage. the debt-equity ratio in PPP projects is 70:30. discarding the principle of divesting the loss-making SOEs just for purpose of protecting jobs is fraught with the danger of increasing the number of sick industries. The large amounts of accumulated defaulted loans now in the state-owned banks are because of the presence of the public sector in the operation and management of industries. Asking a public sector manager to earn profit is like asking a monk to run a casino.
5%. and 25% in the final and seventh year. in order to enable the private sector entrepreneurs to participate in PPP projects. 2) However. 4. 5) In the other four Divisions and the three hill districts.2 Other Fiscal Policy Measures a) Keeping in view the need of the local industries to remain competitive. given the weak state of the capital market. Hence.
. to o. the tax holiday facility should not be limited for a given time period but extended for further periods on case-by-case basis. Nevertheless.6 Investment Incentives 4. and 5%. 6) The business community will surely appreciate the continuation of the provision of accelerated depreciation allowances. and 25% in the next and ninth year. in Dhaka and Chittagong Divisions. 4) Thus. and intermediate products from the prevailing 2. 7) Needless to mention. exemption could be allowed for nine years: 100% in the first five years. 5%. because tax holiday is widely regarded as superior to accelerated depreciation allowances. only if its rationale is established by sound economic criteria. 4. 50% in the next three years. 2.Thoughts on Economics
4. basic raw materials.5%.6.5%. there is a strong case for bringing more industries under the tax holiday facility. 50% in the next two years. the debt requirement will perhaps be much higher. In Bangladesh.1Tax Holiday and Accelerated Depreciation Allowances 1) The continuation of the prevailing tax holiday facility proposed in the Policy would greatly help the private sector industrial entrepreneurs. 3) Area wise tax exemption facilities currently enjoyed by industrial establishments may be made more liberal in the proposed Policy.6. and 10%. it would be advisable to reduce the customs duty rates on machinery and spare parts. excluding the three hill districts. the banking sector should be required to extend credit on easier credit terms. tax holiday facility should be given to specific industries. respectively. the exemption could be extended to a period of seven years (instead of the present five years): 100% in the first four years. 5.
which vitiated the overall business environment. liberalizing the import regime. increasing the efficiency of public sector enterprises.1 Why Did Past Industrial Policies fail?
. poor inflow of foreign direct investment (FDI). but no less responsible were the inconsistent policies. which appeared in almost all past industrial policies starting from the New Industrial Policy of 1982 to the Industrial Policy of 2005.2 Specific Observations 1. and offering attractive incentives to foreign investors. Concluding Observations and Suggestions for Improvements in the 2010 Policy
5. as so on. The proposed industrial policy 2010 contains provisions. 5. 2. 5. labor unrest.18
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b) Moreover.2. but the growth of the industrial sector has remained slow.1 General Observations 1) All successive governments in the country since independence announced policies and strategies for accelerating the process of economic growth through the development of the industrial sector. these provisions achieved little by way of raising investment levels or achieving sustained industrial growth. c) However. should contain appropriate measures to address the aforementioned problems. To name a few. 3. However. poor law and order conditions. and hindered industrial activity in the country. there should not be any VAT or any other duty on the import of machinery and spare parts and basic raw materials. liberalizing the foreign investment regime. providing incentives to exporters.
V. 2) One may attribute this slow growth to factors like energy shortage. industrial policies periodically announced by government. a reasonable rate of customs duty may be imposed on intermediate products that have domestic production. 3) It is the considered view of experts that in order to pave the way for strong growth and expansion of the industrial sector. reduced availability of bank credit. the common provisions relate to expanding private sector participation in manufacturing. discouraged investors.
manufacturers faced a number of problems. 5. If the local investors are hesitant to invest. business environment. and unreliable supply of power and other utilities such as gas and water d) lack of skilled labor and the tendency for labor to be militant e) competition from dumped and smuggled imports f) pervasive corruption in bureaucracy. legal or illegal. 2) The policies scarcely addressed the hard-core problems that hindered industrial activity. and procedural complexities in obtaining credit from banks b) poor physical infrastructure c) acute shortage of energy. and h) growing incidences of crime and extortion at every stage starting from production to distribution and marketing of the products. not just incentives.
.2. thus making the policy incentives meaningless. that were the major impediments to the expansion of private sector manufacturing industries. The afore-mentioned structural impediments continue to vitiate the business climate and dissuade entrepreneurs to bring in new investment or expand the existing ones. particularly in the administration responsible for delivery of public services g) poor law and order conditions.2.2 Major Structural Constraints impeding industrial growth Major Structural Constraints that hindered industrial growth include a) limited access to credit. This also explains why foreign investors are not willing to invest in this country despite the availability of attractive incentives. Foreign investors want a congenial. both structural and policy-induced.Thoughts on Economics
1) Past industrial policies were not effective because they lacked a strategic vision or a clear direction for industrial development. induced by policy failures. its high cost. why will the foreigners invest in this country? 5. 3) There was virtually no recognition in the policies of the supply-side constraints.3 Policy Failures that affected Industrial Growth a. Apart from the structural constraints mentioned in the foregoing. secure.
c. the decisions to have large thrust/service/regulated sectors or to give new definitions to industry do not address the genuine problems of the industrial sector. Bangladesh needs to remove the structural impediments and address the weaknesses in its domestic policy environment. 4) The root causes of the problem lie in the fundamental governance issues in power infrastructure. lowered tariffs. telecommunications and financial services has meant below potential benefits from increased openness. and eradication of corruption. enforcement of law and order. Moreover. But the progress in these reforms was not maintained. the mere announcement of an ambitious industrial policy with lofty objectives is unlikely to help achieve a sustained growth of the country’s industrial sector. For example. 5) Without improvements in these areas. the government opened up the economy.20
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b. complain that most policy reforms in this country are incomplete and remain only in paper. some of the problems are specific to particular industries. finance. and used the floating exchange rate mechanism to promote exports. 5.2. eliminated quantitative restrictions. Many entrepreneurs. the lack of complementary reforms to improve the conditions of power infrastructure. 5. in particular the foreign investors. d. during the early 1990s.2.
.5 Addressing Sector-specific Problems 1. 3) In order to take full advantage of emerging global opportunities. While the most common problems faced by all industries are those of infrastructure. Apart from addressing the broader issues centering structural and policy-related constraints. 2) Some of the measures proposed in the policy are largely peripheral in nature. capital and technology. 2. the proposed industrial policy should also address the sector-specific problems faced by different industries.4 Suggested Remedies for Structural and Policy-induced Constraints 1) The proposed 2010 Industrial Policy does not appear to address the above-mentioned structural and policy-induced problems very seriously. For example.
The proposed industrial policy should incorporate appropriate provisions to periodically monitor and address the specific industryrelated problems.2. the availability of adequate resources.8 Industrial Policy needs to be simple and easily implementable a) The test of a good policy lies in its simplicity and implementability. It should also ensure that foreign investors bring in new technology in the country. it will be necessary for the government to adopt appropriate measures that will make the private sector enterprises’ tasks easier to take effective steps against environmental pollution and desist from such activities as may cause environmental pollution. b) With 16 elaborate chapters. 2) While the emphasis on environmental protection is highly welcome.7 Protection of the Environment 1) The proposed industrial policy lays strong emphasis on the protection of the environment and directs manufacturing enterprises to control environmental pollution by setting up effluent treatment plants (ETPs) and strictly comply with environment-related laws and regulations. or human.2. 5. A strict screening of FDI would therefore be necessary. the proposed industrial policy should clearly lay down that foreign investors shall not be accorded permission to invest and conduct business in this country unless they brought the latest technology. the proposed industrial policy document appears to be rather large. whether institutional. d) As regards implementation. will be crucially important. 5.Thoughts on Economics
3. 5.2. b) To that end. c) Unduly long and elaborate policy documents may have the unintended effect of the crucially important objectives getting lesser priority. financial.6 Policy toward Foreign Direct Investment (FDI) a) Industrial policy should not consider FDI merely a means of complementing domestic resources for industrialization.
. e) There will be the need for better coordination among concerned ministries and implementing agencies to improve policy implementation.
10 Conclusion • Given the slow growth experience of the industrial sector over the past three decades. July-September 2005.
Bhuyan. USA: International Center for Economic Growth. “Industrial Policy in Bangladesh: A Survey”. September 2010. Industrial Policy – 1991. W. James. GOB: Ministry of Industries. Asian Development: Economic Success and Policy Lessons. Thoughts on Economics. A. GOB: Ministry of Industries. Nevertheless. and delays in decision-making. San Francisco. Cal.E. 5. 1987. March 2005.M. 15(3). Bangladesh could expect to achieve a double-digit industrial growth in the coming years and move closer to achieving the target of raising the industry sector’s share in GDP to 35-40% in the next decade as set by the 2010 industrial policy. GOB: Ministry of Industries. GOB: Ministry of Industries. 1 June 1982. GOB: Ministry of Industries. and if all structural and policy obstacles to industrial expansion as identified in the foregoing could be overcome. Industrial Policy 1999.. if the state machinery were able to improve the quality of governance.2. Meier.2. S. the target of raising the industrial sector’s share to 40 percent of GDP by 2021 may appear a little ambitious..
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5. Industrial Policy 2005. The proposed industrial policy will need to address these problems seriously. Naya and G. July 1991. New Industrial Policy. red tape.R.9 Improving Governance 1. Draft Industrial Policy 2010. The implementation of industrial policy in Bangladesh remained weak in the past because of inherent bureaucratic complexities.