Protectionism Vs Liberalization

It is true that productivity plays more important role than natural resources in the success of a nation. However, natural resources have its own importance and we have seen that it yields power to the country. Government should not rely only on natural resources, but work towards empowering the businesses to take advantage of the resources coupled with highest possible productivity. Government can set high level policies and regulations that motivate businesses and citizens to be more productive. It is the motivation that is at the heart of success and productivity. History has several examples to show us that innovation is the driver for success in the modern and global economy. Innovations usually lead to higher productivity and government’s industrial policies should address it. We have seen that Japanese manufacturing and electronics companies have succeeded based on innovation, even though the country is not rich in natural resources.

Even though the microeconomic decisions are usually taken at firm level, firms are dependent on government to provide a basic framework and flexibility to make those decisions. The companies are driven by need to make money and need protection against unlawful elements. Companies also look up to government for protection of intellectual property. The capitalist structure in the United States has been successful because of the industrial framework provided by the government. Despite of the mostly open market policy of the United States, the local companies have fared well. The international and domestic competition is healthy for businesses. If the government policies eliminate or reduce healthy competition in any way, it would be considered over protectionism.

Education plays extremely important role in the development of a country. Government plays a very important role in the shaping of the education model in the country. Many companies do take it upon themselves for professional training of fresh graduates