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A Significant Decision |
Merger of the three elements of industry, mine and trade into one
ministry which has taken place in our country, could usher a new
strategy backed by the past experiences.
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Mohammad Kazem,
Economist |
Industry, mine and trade are three key concepts in the national economy of
each country which, apparently, follow an independent concept and structure
and performance of each could be discussed specifically. But, what has
always been ignored with regard to the developing countries in their policy
makings and macro planning is disregard for the rooted connection and
consistency of these three elements in operational processes. It means that
mines are supplier of the raw materials and in the next stage this is the
industry which, through using techniques and relevant equipment would turn
raw materials into products and offer services and then the responsibility
of marketing and selling the manufactured products is shouldered by the
trade.
If
such a process is ignored in the systems of the country's macro planning and
each sector undergoes examination and evaluation independently, economic
challenges including poor coordination in optimum utilization of resources,
developmental investment, low productivity and many other problems would be
witnessed in the indicators of the national economy which are stemmed from
lack of attention to the process and fundamental consistency among industry,
mine and trade.
For example, a country which plans exploitation and extraction of raw
materials from its mines with no regard for its industrial capacities, would
gradually be turned into an exporter of raw materials. On the contrary if
macro industrial development planning of that country is not compatible with
capabilities of is mines, its industry would be dependent of the import of
raw materials from other countries. Then trade of manufactured products of
the two sectors would be normally influenced by competitive and pricing
challenges and would not enjoy a high productivity in the indicator of the
national economy.
Countries which pay attention to the approach of consistency among industry,
mine and trade are mostly after creation of synergies for the activities of
the three sectors for endogenous economic development. They believe that
industrial development by relying on possibilities of supplying domestic raw
materials could develop trade and subsequently lead to economic progress and
increase level of productivity and technical knowledge in the national
economy. Such an approach would create a sustainable process of economic
activities for the industry, mine and trade and would remove many concerns
related to the ups and downs of the indicators of the national economy.
The historical background of segregation of industry, mine and trade goes
back to the approaches of the government in elucidation of economic policy
makings, especially in the area of ownership in each sector and its share in
the market. For example, some governments consider themselves mine owners
and undertake mine exploitation and exploration independently and due to
monopolization of mines, the prices of exploited raw materials would not be
competitive. This would face them with challenges of productivity and
optimum utilization of mineral resources.
This same issue would encourage industrialists to provide their required raw
materials from foreign markets due to their high quality, timely delivery
and more reasonable prices and thus an incomplete and heterogeneous
interaction would be created in import-export of raw materials. In other
words, export of cheap raw materials and import of expensive raw materials
would aggravate the backwardness process of industry, mine and trade.
In
the area of industry too, the role and presence of governments would be
determining. In developing countries however there is this mental backing
that governments should hold control of heavy and upstream industries and
leave the downstream and light industries to the private sector. These
double standards in the classification would not only hinder industrial
development but would also weaken the private sector and its
entrepreneurship mechanisms would prove ineffective under the influence of
government policies.
In
the area of trade, although the executive mechanisms are in the hands of the
private sector, however the government approaches and policies in
elucidation of export-import rules and regulations, customs tariffs, banking
supports and the likes could play a determining role in the growth and
progress of this sector. If the unhelpful approach of governments in the
mines and industry sectors took shape on the basis of what was said, trade
would undoubtedly face serious challenges.
Merger of the three elements of industry, mine and trade into one ministry
which has taken place in our country, could usher a new strategy backed by
the past experiences. Naturally, sound understanding of the aforementioned
points plus many other challenges could be considered the approach towards
this new policy. But what should be taken into consideration in the new
policy is removal of the same inefficiencies which have been influential in
these three sectors. In other words, officials of the new ministry in their
macro and micro planning should take the three sectors into consideration
and in the structure and performance of their theoretical and practical
approaches they should keep in mind that these three sectors like a tree are
common in roots, branches and fruits. In other words, those industries
should be developed whose mining backing would be capable of meeting their
raw materials. Also, investment should be made in mines whose raw materials
would lead to the progress of industry and trade in the subsequent stages.
Because, experience has shown that industries dependent on imported raw
materials are devoid of stable development. On the other hand, export of raw
materials due to backwardness from advanced technology, would not realise
the expected productivity and benefits and consequently trade would not get
anywhere with regard to such mechanisms.
Meanwhile, confinement of the role of government to macro policy makings and
supervision and non-interference in economic interactions and markets of
these three fundamental sectors in the national economy could be highly
effective in the growth and progress of the country. If the government
intends to insist on its ownership and intervention in the markets of these
sectors by adopting obstructive policies and ignore the role of the private
sector and intra-economic interactions, obviously the policy for the merger
of these three sectors would not prove effective and would add up to the
inefficiency of the structure and performance of the industry, mine and
trade sectors. |
