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>I used to think that way but the truth is it was a massive gain for our industry This is only good if you want to work for big government granted monopolies w

>I used to think that way but the truth is it was a massive gain for our industry This is only good if you want to work for big government granted monopolies where you are just a cog in a big machine. To create a culture of export and value addition, every person should have ability to import the best machine they can afford from abroad without government eating into budget through import taxes. For example, imagine I am creating fishing line and I found that best way to go about is to import a German machine through which I will be able to create high quality fishing lines. Government imposed 200% duty on German machinery and now my competitor who is in Singapore can easily import that machine because he isn't paying 200% import duty on importer machine. How is my product going to be able to compete in international export market when my investment is already double of my competitor. This is the process of niche discovery. Big companies are slow at finding new niches to exploit. Small companies can do the exploration work and if they find something which works, they can become future big companies. And if I am not able to import German machine guess what I am going to do? I am going to import end product form someone who is able to create the end product at cheaper cost then put my label on top of it and sell locally. What did I learn? Just slap label, market and print money? I gained no manufacturing expertise. When you add useless import taxes, you increase import of "final product" over import of "intermediary product". This way your country can't add value and you fail to capture value from a supply chain

matheusmoreira 7y ago
> This is only good if you want to work for big government granted monopolies where you are just a cog in a big machine. People I met who lived in that era didn't describe it that way to me. They were prideful of what they'd accomplished. > Government imposed 200% duty on German machinery and now my competitor who is in Singapore can easily import that machine because he isn't paying 200% import duty on importer machine. Best way to deal with this is to get the local industry to reverse engineer the machine and produce a copy. Intellectual property be damned. This boosts local industry, improves the local economy, allows independent innovations, reduces the nation's dependence on foreign markets, etc. Obviously, the established players don't want this. They want developing countries to buy their stuff instead of making their own. Intellectual property is the true government-mandated monopoly. > How is my product going to be able to compete in international export market when my investment is already double of my competitor. The point is to focus on the needs of your people first and foreigners second. The fact is companies don't care all that much about their secondary markets. I've seen products for sale here with labels printed in spanish: they didn't even care enough to create labels for us. The trick is to make your own people your primary market. The US does this, Japan does this. Why should other countries be any different? > I am going to import end product form someone who is able to create the end product at cheaper cost then put my label on top of it and sell locally. What did I learn? Just slap label, market and print money? It's a lot easier to develop an existing industry than to create one out of nowhere. Industry could start by simply assembling parts. When the industrialists see a return on their investment, they can expand the scope of their operations and perform R&D.

matheusmoreira 7y ago

> This is only good if you want to work for big government granted monopolies where you are just a cog in a big machine. People I met who lived in that era didn't describe it that way to me. They were prideful of what they'd accomplished. > Government imposed 200% duty on German machinery and now my competitor who is in Singapore can easily import that machine because he isn't paying 200% import duty on importer machine. Best way to deal with this is to get the local industry to reverse engineer the machine and produce a copy. Intellectual property be damned. This boosts local industry, improves the local economy, allows independent innovations, reduces the nation's dependence on foreign markets, etc. Obviously, the established players don't want this. They want developing countries to buy their stuff instead of making their own. Intellectual property is the true government-mandated monopoly. > How is my product going to be able to compete in international export market when my investment is already double of my competitor. The point is to focus on the needs of your people first and foreigners second. The fact is companies don't care all that much about their secondary markets. I've seen products for sale here with labels printed in spanish: they didn't even care enough to create labels for us. The trick is to make your own people your primary market. The US does this, Japan does this. Why should other countries be any different? > I am going to import end product form someone who is able to create the end product at cheaper cost then put my label on top of it and sell locally. What did I learn? Just slap label, market and print money? It's a lot easier to develop an existing industry than to create one out of nowhere. Industry could start by simply assembling parts. When the industrialists see a return on their investment, they can expand the scope of their operations and perform R&D.