Misguided obsession on manufacturing

“LET'S propel economic growth through manufacturing” — is a recurring theme around the globe.

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The familiar rhetoric which emerges periodically has been rekindled by US President Donald Trump’s aggressive bid to revive the American manufacturing sector through tariffs, fiscal incentives, and deregulation.

The fondness towards manufacturing by political regimes is observed worldwide. Britain is attempting to subsidise the energy bills of industrialists while India’s Modi administration is implementing an extensive subsidy scheme for the industrial sector. And governments in many other nations are hoping to galvanise manufacturing with immense zeal.

Many economists and politicians — from both the Left and Right — have a romanticised view about manufacturing while being engrossed about the nostalgia associated with factory work. Some view reviving manufacturing as a path to resolve unemployment. Having a strong domestic manufacturing base is also considered critical for national security, particularly for industries of strategic importance. A multiplicity of ill-advised opinions have led policymakers across the world to pursue policies that promote manufacturing at the expense of other sectors that carry the risk of impeding overall economic growth.