STRATEGIC INDUSTRIES

Should governments seek to protect “strategic industries”?

Should governments seek to protect “strategic industries”?

Introduction

The main purpose of this paper is to make an analysis that why should government protect "strategic industries”. Any industry that has most important contributions in the economic development of a country is called strategic industry. It is important for a country to protect its strategic industry in order to gain the economic development.

Discussion

It is very necessary for a country that it should support its strategic industry in order to make the economic development. For any country, it is necessary that, its economy should get develop. Therefore, it makes all the possible attempts in order to develop its economy.

The issue of government assistance to economically strategic industries shows every sign of becoming a major bone of contention in the international political arena of the 1 990s. As tariffs have gradually been negotiated away and a number of non-tariff barriers have increasingly come under scrutiny, support policies for key industrial sectors are moving to centre stage as a potential source of tension in international economic relations. While such support is considered, by some to be essential for maintaining and further developing the national economy in an increasingly competitive world, it is viewed by others as a major threat to the future of the international system of trade, investment and finance. The purpose of the OECD Forum for the Future conference was to discuss the key issues raised by such support in the context of international economic relations over the longer term (Acorn, 2006, p. 667). It was intended to enable participants to air their views on these matters, to obtain a better understanding of how such problems are perceived by their counterparts in other countries, and to explore areas in which further work needs to be done at the international level. The proceedings were divided into four sessions. The first set the stage by providing an overview of the major changes that have occurred in the global economy, and by examining shifts in the general focus of policies adopted by the principal productive actors in recent years. Special attention was directed to the changing nature of international competition and to the role of key technology- intensive industries in influencing the competitive position of national economies (Norman, 2001, p. 291). After reviewing the various concepts of strategic industries, the second session emphasized the domestic dimension by examining the measures that have been implemented to foster national competitiveness via the development of strategic industries, and the impact of such policies on the countries undertaking them.

Keeping the importance of strategic industries in view, the Russian government is also taking the necessary measures to protect its economic development. The government said companies in this sector have foreign ownership limits strategic companies linked to security may be listed only 25% of its capital. Russia set official limits on sale of shares in strategic companies and foreign raw materials, which gives greater regulatory force the government on natural resource wealth of the ...