Infant industry argument

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Infant industry argument

Argument that industries in the developing and emerging sectors of the economy need protection against international competition in order to establish themselves.

Infant Industry Argument

A policy position stating that new industries developing in a country need government protection. That is, the infant industry argument states that a government must subsidize these industries and/or protect them through tariffs. Proponents of this argument note that several East Asian tigers used this policy following World War II with a great deal of success. Critics maintain that these policies are capital intensive and not all states can afford them. It could also lead to retaliatory moves in countries to which a country seeks to export. See also: Import-substitution industrialization.
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The completion of these projects would help bring growth in agriculture and industrial sectors besides promote infant industries and overall exports of the country.
PESHAWAR -- Terming Federal Budget 2019-20 is people and business-friendly, financial and political experts here Thursday said it will help provide economy stability, alleviate poverty, promote small medium entrepreneurship (SMEs), infant industries and generate employment opportunities for hundreds of thousands of people in the country.
Financial and economics expert, Sumbul Riaz has also welcomed Kamayab Naujawan program of the Federal Government and declared it a significant step towards promotion of SMEs, infant industries, trade and business in the country.
Some regulations and guidelines are also needed, in areas such as infant industries and export processing zones.
The FX risk inhibits foreign competition which allows infant industries greater room to grow.
These countries engage in a combination of protectionism (coddling infant industries to give them time to become globally competitive) and then culling losers (cutting off resources to firms that don't succeed in export markets).'
In the drafting of the Framework Agreement, COMESA developed, circulated and presented to the AfCFTA meeting a technical paper on infant industries. This presentation was eventually used as the basis for finalisation of the guide- lines on infant industries.
Once a presumption about the economic benefits of free trade was established, various objections to free trade arose in the form of major arguments for protectionism, such as those relating to the terms of trade, infant industries, increasing returns, wage distortions, income distribution, unemployment, and strategic trade policy.
While special facilities would be given to investors in economic zone at Rashakai near Noshehra that would be made a model economic zone, the Finance minister said the procedure of issuance of licenses for establishment of businesses would be made easier to promote investment and bolster infant industries.
Protectionism of infant industries like motor vehicles, kitchen equipment, and vital goods, he argued, was necessary so developing countries could compete with richer nations that had economies of scale.
Mr Molefhi said Botswana had the opportunity of using World Trade Organisation (WTO) provision of infant industries where they provided support and procurement from local companies,.
IT exports are important to strengthen economy, ensure digitalization of public sectors departments, attracting local and foreign investment, promotion of infant industries and generation of jobs opportunities for youth.

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