Revival of glory of seventeenth century

M S Siddiqui Part Time Teacher, Leading University Pursuing PhD in Open University, Malaysia e-mail: shah@banglachemical.com Bangladesh have long history of trading of Spices and manufacturing of Muslin fabrics during seventeenth century and made international footprints by exporting goods to all over the world. According to Chinese and Greek travelers, the adjacent areas of Dhaka, started flourishing as trade centers mainly from the 11th century during the end of the Pal dynasty and initial period of the Sen dynasty Along with trade relations with China, Greece and Italy, However, Dhaka emerged as a thriving commercial and industrial centre after the Mughal rulers shifted the capital of Bengal from Rajmahal to Dhaka. The ancient economic life of this land was dependent on agriculture and craftsmanship, supported by recent excavation at Wari-Bateswar. Mughals brought a huge number of artisans and royal court staff, who introduced a new economic way of life with multiple professions. The political change brought significant transformation in the local economy. At that time a great number of shroffs, bankers, podders and mahajans had been created, who played a vital role in the economic and social life Bengal as well as the entire Mughal empire. Handcrafted textiles, milk products, jewellery, pottery, paper making and boat building were the principal trade items, hence, the commercial excellence and economic prosperity presented lucrative opportunities for traders from Armenia, France, Portugal, Greece and the United Kingdom. The influx of foreign traders influenced gradual economic growth and socioeconomic aspects of the city considerably, as they had set up their Kuthir, agency houses and factories mostly in Bengal. The invasion of powerful British transition from Mughal to the East India Company rule in Bengal led to many institutional changes, especially to manufacturing and economic systems. In the early eighteenth century, the indigenous industries declined due to the unfavorable British policy towards the textiles industry in the subcontinent. Their business policy was to take some products mostly raw materials to support industries in Britain and also a market of industrial products of their country. At there was no government patronization and the technology of crafts remaining more or less unchanged and the demand declined in the face of competition from Textile Industries after industrial revolution in Europe, the muslin weavers were converted into farmers, goldsmiths or got involved with trading activities at the time. In the eighteenth century, a new trading and manufacturing class developed in this region. Aprt from foreign mercantile companies, the local factory weavers, banians, gomostas, brokers, pikers, mohajans, podders, craftsmen, washer men, palanquin-bearers, painters, weavers, craftsmen, gold and silver

smiths and shopkeepers steps in to business. At that time, revive the jute markets to support jute industries in UK. The evolution of these classes indicates at the existence of a high consumer class as well as a working class in this region. The East India Company developed a shipbuilding industry in Calcutta for creation of facilities for repair and furnishing of merchant vessels and warships. Other major industries of Bengal that underwent development during the British period were the Jute, salt and sugar industries. These ventures were at the best interest of their own business. The areas of South Asia out of which Pakistan was formed were overwhelmingly non-industrial. They were composed primarily of the raw material producing agriculture. It had previously supplied raw jute to the jute mills located around Calcutta. West Punjab, and the most important component of West Pakistan. After 1947 East Pakistan inherited a very small share of the industries of Bengal. East Pakistan got none of the 108 jute mills, 18 iron and steel mills and 16 paper mills of Bengal. Only 90 of Bengal's 389 cotton mills, 10 of its 166 sugar mills, and 3 of its 19 cement factories fell in the territory of East Pakistan. The industrial development policy of the government of Pakistan encouraged the manufacture of arms and ammunition, hydroelectric power, and telephone, telegraph and wireless reserved for the state and encouraged the private sectors to come up with industrial ventures in all other sectors. Twenty-four industries including jute, textiles, silk and rayon were subjected to central planning. The government created the Pakistan Industrial Development Corporation (PIDC) and Pakistan Industrial Finance Corporation to promote industrialization. PIDC made significant contributions in the establishment of industrial units in sectors such as jute, paperboard, cement, fertilizer, sugar, chemicals, textile, pharmaceuticals, light engineering and shipbuilding. Pakistans early industrial development in the fifties was based on import substituting industrialization under tariff barriers and an overvalued exchange rate. After the first easy phase of import substituting industrialization, industrial strategies evolved into a more coherent industrial policy in the sixties. Pakistan managed to kick-start industrialization in this period given its unpropitious initial endowment. More significant is the acceleration in industrial growth rates in the early sixties when it adopted industrial policies. The benefit of dynamic policy of Pakistan has gone to people of West Pakistan and Bangalees were not prepared to take the advantage moreover Bangalees were deprived of facilities through different suppressive manners. The early stage has policy of state control and state sponsored economic activities and there were ideological changes in Bangladesh and global scenario. The Industries marked by notable development in Bangladesh in the mid-1980s include shipbuilding, automobiles assembly, oil refinery, insulators and sanitary wares, telephone equipment, electrical goods, televisions (assembly), cigarette, and vegetable oil. The country achieved a significant success in developing garment industry in last three decades. Industry is the backbone upon which the economy of any country prevails. The growth of economy, the economic development of a nation depends upon the development of industrial sector. The external environment of any industry, mainly the political and legal along with social environments affect the growth of industries greatly.

The importance of Environment Analysis has significant impacts on business and economy since this is directly or indirectly affecting the growth of industry in any country. Diversifying the economy might mean further shifting the economy away from agriculture and encouraging more manufacturing and services thus reducing the dominance of one sector in favor of others. The economic history suggests that countries tend to diversify their economies from primitive form of agriculture to manufacturing and/or service activity. All nations have their Industrial policy considering the geo-political situation, technology, manpower and other factors. The objective of Industrial policy is to limit the role of the Government generally in establishing strategic and heavy industries and to improve efficiency in the public sector. The development of industry preferably Small and Cottage Industry are expected on grounds of (i) labor intensity (ii) use of indigenous raw-materials, (iii) lower capital -output ratio (iv) generation of employment at minimum investment cost (v) equitable distribution of income, (vi) regional distribution of industrial investment, (vii) reduction in fixed investment costs through sub-contracting tie -ups, (viii) foreign exchange earnings through exports/imports substitution, (ix) building up entrepreneurial base through trial and error at low cost, (x) introduction of new/appropriate technology at low cost, etc. An Industrial policy (IP) need to develop the Industrial Sector in order to increase its contribution to the gross domestic product, income, resources and employment. IP can promote expansion of industrial sectors, by putting more emphasis on development of the private sector. It can make the role of the Government of promotional rather than regulatory. It can encourage domestic and foreign investment in overall industrial development. The development of export-oriented, export linkage and efficient import substitution industries, especially encourage the development of small and cottage industries. A policy can be for exquisite better technology and improvement of appropriate technology. A policy can develop efficient production process to attain self sufficiency in essential consumer goods. IP can ensure development of industries based on indigenous raw materials and indigenous technology SMEs and cottage industries as one of the major driving forces, providing assistance to women entrepreneurs on a priority basis, setting up special economic zones in different parts of the country, improving the quality of industrial products to world standard, marketing of goods at competitive prices, and enhancing productivity in the industrial sector. IP can encourage balanced industrial growth in different regions of the country and expand production in value-added sectors, with high employment and growth multipliers that compete in export markets and in the domestic market against imports. In so doing, IP can also places emphasis on more labor-absorbing production and service sectors, increased participation of historically disadvantaged people and regions in the economy. It can create possible opportunities for revitalizing and rehabilitating sick industries. IP may develop policy of effective arrangements for improving standards and controlling quality products and to take appropriate measures for preventing environmental pollution and maintaining ecological balance.

The Bangladesh Enterprise Institute-World Bank Investment Climate report indicates that compared to China, India and Pakistan, Bangladesh is falling behind. The incidence of corruption is far greater, the quality of infrastructure poorer and the performance of key government departments or agencies less satisfactory. Added together, the cost of doing business in Bangladesh today compared to other

countries in the region is considerably higher. . Corruption is pervasive. Bangladesh ranks worse on measures of corruption than its neighborswith more than half the firms reporting it as a major or very severe obstacle. Among elements that add to the cost of doing business in Bangladesh mention is invariably made of the inordinate delay in the disposal of cases, by the lower courts in particular, and the indifference or incapacity of the police in enforcing law and order. Infrastructure poses some of the most severe obstacles facing firms. Bangladesh fares worse than its neighbors on general measures of infrastructure, and the vast majority of firms report that problems in infrastructure seriously hamper their growth. The utilities section of the report focuses on three sectors: gas, power, and telecommunications. Bangladesh is already a land scared country and in near future there will be acute shortage of industrial plots. Bureaucratic barrier is a major obstacle in Bangladesh. Firms view regulation as a serious problem. Starting a firm in Bangladesh is fairly difficult. And once firms are running, they receive frequent visits from government agenciesabout 17 a year on average. Moreover, by studying and adopting best practices from other countries in the region, and South East Asia, with lower corruption indicators, Bangladesh may be able to achieve considerable success in reducing corruption and other hidden costs of doing business, thereby attracting greater investment. Indirect costs most often increase the cost of doing business in Bangladesh. These include the costs of securing adequate infrastructure, obtaining the necessary licenses and permits, dealing with government bureaucracy, transporting goods, importing or exporting goods, and ensuring security of property and personnel. Although these costs are understood to be an integral part of doing business in Bangladesh, their exact extent is unknown and they must be negotiated unofficially. It is these unofficial costs that cause the greatest problems for businesses. Unofficial costs are difficult to estimate and plan for and may not always yield the desired outcome. Furthermore, sustainable economic growth requires a stable regulatory environment, which is at odds with the personal discretionary system currently in place in Bangladesh. Finance appears to be a looming problem due to high interest rate and lengthy loan sanction process and high collateral. While most firms appear to have access to finance, it is mostly short-term and nearly 60 percent of firms with a line of credit report having exhausted that credit. Small- and medium-size firms are disproportionately affected by all these problems. The smaller the firm, the more of its resources it devotes to bribes and to dealing with government visits and inspectionsand the less likely it is to have access to formal finance. These problems can pose great barriers to market entry and growth for small firms. The costs and benefits of these policies and the fairness of the distribution of these costs and benefits should be available to all citizens. Like all economic policies, industrial policy creates winners and losers, and there should be ample public debate about the implications for equity. For example, sometimes industrial policies are deliberately intended to foster greater development in particular regions, or types of region e.g., urban or rural or different part of the country. Industrial policies may also favor

particular industries over others, and thus certain types of workers, such as those in manufacturing rather than those in agriculture. Similarly, policies designed to stimulate investment in particular industries may have important implications for gender equity if jobs in that sector tend to be dominated by either men or women. The implementation of Industrial Policy is a huge job and the only Investment Board unable to implement it. The agency is not provided with sufficient power in the governmental structure to cut through the bureaucracy and deliver services to investors. The entire government mechanism with visionary leadership can achieve the target. Bangladesh needs an effective Industrial promotion agency out of a government department as an investment promotion agency with the philosophy and outlook of the personnel to change sufficiently. The image crisis is another major obstacle to foreign investment and foreign trade. Bangladesh cannot sustain in global market with low labor cost and low cost garments in the export market. She should try for value added high end product and develop own brand. Industries cannot sustain in long run without premium price and brand image of end products. Again the brand value of made in Bangladesh products are depend upon brand value of country. Bangladesh should take initiative of various bureaucratic, judicial and political reforms being undertaken in India, Pakistan, Malaysia, and Singapore that are addressing the same problems that are facing Bangladesh. This policy is not a innovation but replication of our neighbors to achieve economic and social emancipation. After few years long evaluation and consultations by two political and one caretaker governments has given an Industrial policy -2010 with is in fact a wish list. Can the wish list create an atmosphere for rapid industrialization and address the existing problems?