Protection Developing Countries
Developing countries like Indian have just and special reasons to adopt the policy of protection. We may briefly enlist them as under.
1. In these countries the infant industry argument assumes far greater importance than in developed countries. Thus selective or discrimination protection may be suggested as a remedy for certain economic ills and for the industrial growth of these countries.
2. Again these countries being agricultural countries their economics cannot be developed at the desired speed unless due protection is given to a number of prospective enterprises. Pigou writes. The case for protection with a view to building up productive power is strong in any agriculture country which seems to possess natural advantages for manufacturers. In such a country the immediate loss arising from the check to the exchange of native produced for foreign manufactures may well be outweighed by the gain from the greater rapidity with which the home manufacturing power is developed. In short in order to allow backward agricultural countries to develop their industrial potentialities rapidly forcing competition should be inevitable minimised through protection.
3. The advanced countries should not resent or retaliate the tariffs of developing countries as the nature of import restriction of these countries differs from that of the developed counters. Tariffs are imposed by these countries mainly to utilize the available foreign exchange earnings of the import of capital and commodities essential for economic development rather than for having luxury articles. Due to demonstration effects marginal propensity to import being very high in these countries, import restrictions become inevitable in the interests of the economic expansion of the country.
4. Restrictions by the developing countries ar just a traditional step to increase trade as such in the long run foreign trade considerably increase s with an increase in income and economic expansion fo these countries which help in strengthening the economy of the world as a whole.
5. From the point of view of practical politics also protection may become inevitable. In a world torn with strife and power politics, every nation is forced to have a solid deference self sufficiency and full employment. These cannot be achieved without revolving a tariff policy suited to the needs of the country most of the developing countries have secured their independence very recently there must have a strong deface and diversification of their industries through protection.
6. Protection is a very important method amongst many other of planned economics development paining implies control and regulation of economic activities in the desired direction. Free trade policy is laissez faire policy which is ruled out under planning since most of the poor countries of the world have launched open planning of economic development protection become inevitable for it successful implementation.
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