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Boosting the manufacturing sector It
has now been close to two years, since the second Growth and Transformation
Plan, GTP II started to be implemented. It can be said that, the works that
have been planned and carried out within these time are going well. The fact
that our economy is projected to grow by more than 11% in the current year speaks
volume of this. In this article, I will try to look into the plans that are set
in regards to the industry and export sector – by citing the GTP II document. As
it’s known, our country’s industry sector, especially the manufacturing sector,
has a huge role to play in our country’s Renaissance. In order to the country’s
economy development to be sustainable, and help consolidate the country’s path
to its Renaissance, the plan should bring growth in the manufacturing sector
within the plan years. This will have a huge role for the structural
transformation of the economy as well, which plays an irreplaceable role in the
vision the country has planned. In fact, it can be said that the issue is an
existential one. It
also helps in boosting the productivity, competitiveness and quality of existing
industries, while also enabling create a huge mobilization in the effort to
bring structural change in the economy. Thus, in order to initiate structural
change in the economy, the manufacturing sector should record 24% annual growth
on an average within the plan years. This also means that such effort will increase
the share the sector has on the economy by 8% by 2020. This
change will lay the foundation for the realization of the plan to bring the
manufacturing sector’s share to 18% (by increasing it from its current rate by
4 fold) in the overall nationwide plan of reaching the middle income status. It
also helps lay the groundwork for the realization of the country’s vision to
enter a middle income status. In
terms of implementing the structural change, the role of manufacturing industry
is huge. Comparing the present with the past, the revenue the manufacturing
sector used to bring in from export was no more than 10%. However, it is planned
to take up this number to 25% by 2020 – by planning to collect 5 billion dollars
in revenue from the sector. The plan/aim is to take the number to 40%, by the
time we reach the year 2025. Of course, this plan is ambitious and challenging.
However, as former Prime Minister Meles Zenawi at one time said, there is no reason why we can’t be
successful with our plans, even if they are enormously hard to achieve, if we
are willing to work hard. Therefore,
it is possible to bring economic structural transformation with hard work. For
this, I can use the manufacturing industry sector. The manpower reshuffle that
is taking place within the sector is one. As current numbers show, the manpower
that is involved in medium scale and large scale manufacturing industries is no
more than 350 thousand. Thus,
there is a plan to increase that number within the GTP II period and the proceeded
five years, by four fold taking the number of manpower involved in the sector
to 1.5 million people. Out of this, the plan set in the GTP II is to realize
half of the plan, which means, creating a suitable environment to involve 750 thousand
citizens in the sector. If this is made possible, I think it is also possible
to increase the manpower reshuffling by double of its current rate. Thus,
it is obvious that, a huge effort is needed to achieve this plan, as it takes
the involvement of the youth and women, and making sure that they benefit
hugely from it along with ensuring the implementation of the plan. As the
various benefit packages the government is working and planning on, in order to
ensure that the youth and women benefit shows the strong commitment the government
has to that end, it is possible to get success if these efforts are made to continue
strongly within the remaining years of the GTP II plan. Objectives
are set in the aforementioned sectors in order to help achieve the goals set in
the plan by giving attention to small, medium and large scale industries. This
situation will play its own role in the effort to transform both sectors
towards being export led sectors and in reducing import goods. As
it’s known, the basis of the manufacturing sector is narrow and therefore
cannot be a source of guarantee. Nevertheless, our country should mainly attract
investment to bring program in the sector. Our investors that are growing in capability
especially should be made part of the change and by encouraging them to enter
into selected sectors. Thus, in addition to the local investors, foreign
investors will have also a visible role in investing in the manufacturing
sector. This will have a positive impact in hastening the growth of the sector.
Thus,
there will be massive efforts to carefully attract direct investment on every
sector within the plan years. There is a plan to recruit and select foreign companies
that have good reputation and convince them to help with the growth of the
sector. There is a plan to involve the investors on export oriented
manufacturing sectors and help our country gain the benefit it should get from
the sector. It
doesn’t mean that, our country will not give focus to local investors, when
doing this as they will be able to invest in the sector. The plan explains that,
local investors that are performing well will be carefully selected and will be
given enough support to enter into import substituting manufacturing goods. Side
by side, in the bid to build up the country’s science, technology and
innovation capacity, the GTP II plan aims to bring technological transfer in
harmony with the country’s growth demand. Thus, industry development support institutions
that are set up within the sector and universities will be strengthened through
quality education facilities. It is also planned to strengthen the link with similar
foreign institutions to modernize their operations. Therefore,
efforts will be underway to increase the productivity of the sector by
selecting, modifying and utilizing works on better fit and improved technologies.
Thus, the ‘Kaizen’ management philosophy, our country chose will be implemented
on every type of industry and the export sectors during the second growth and
transformation plan years in order to increase their quality, productivity and
competitiveness. In
general, there are needs of investment in order to guarantee the sustainability
of the manufacturing industry. The investment should also help the export sector
as well. The industry should be export oriented. I
think when we do this, we can substitute imported goods by using local products
and, we can further increase our foreign currency from the export sector. And I
say, everybody should play his own role on the second growth and transformation
plan so that this comes to fruition. |