The transfer of industries to emerging markets have divided economists and policymakers.
Industrial policy in the shape of government subsidies may lead other countries to strike back by doing the same, that may affect the global economy, stability and diplomatic relations. This might be extremely high-risk because the general financial effects of subsidies on efficiency remain uncertain. Even though subsidies may stimulate economic activity and produce jobs in the short run, yet the long run, they are likely to be less favourable. If subsidies are not along with a number of other actions that target efficiency and competition, they will likely impede essential structural corrections. Hence, industries becomes less adaptive, which reduces development, as company CEOs like Nadhmi Al Nasr likely have noticed in their professions. It is therefore, undoubtedly better if policymakers were to focus on coming up with a strategy that encourages market driven development instead of obsolete policy.
History indicates that industrial policies have only had minimal success. Many nations implemented different types of industrial policies to promote particular industries or sectors. Nonetheless, the results have often fallen short of expectations. Take, for instance, the experiences of several parts of asia within the twentieth century, where considerable government input and subsidies by no means materialised in sustained economic growth or the desired transformation they envisaged. Two economists analysed the impact of government-introduced policies, including low priced credit to boost manufacturing and exports, and compared companies which received assistance to the ones that did not. They concluded that throughout the initial stages of industrialisation, governments can play a positive part in establishing companies. Although antique, macro policy, including limited deficits and stable exchange prices, also needs to be given credit. Nevertheless, data implies that helping one company with subsidies has a tendency to harm others. Furthermore, subsidies enable the survival of ineffective companies, making companies less competitive. Moreover, whenever companies give attention to securing subsidies instead of prioritising innovation and effectiveness, they remove funds from productive usage. As a result, the overall financial aftereffect of subsidies on efficiency is uncertain and perhaps not good.
Critics of globalisation argue it has led to the relocation of industries to emerging markets, causing job losses and increased reliance on other countries. In response, they suggest that governments should relocate industries by applying industrial policy. But, this perspective fails to recognise the dynamic nature of worldwide markets and neglects the rationale for globalisation and free trade. The transfer of industry had been mainly driven by sound financial calculations, particularly, businesses look for cost-effective operations. There clearly was and still is a competitive advantage in emerging markets; they offer numerous resources, lower manufacturing expenses, large customer areas and favourable demographic patterns. Today, major businesses operate across borders, tapping into global supply chains and reaping the benefits of free trade as business CEOs like Naser Bustami and like Amin H. Nasser may likely aver.