When going to the supermarket, most consumers would often consider buying a quality product which is reasonably priced regardless if the product is imported or locally made. Sadly, there are consumers that only have eyes on imported products and services due to marketing influence and some being able to provide a competitive price. Very few are the patriotic ones that only buy local products. As a result, some local manufacturers loose business. To safeguard its own products and encourage patronization, protectionism became a considerable economic policy.
By definition, protectionism is a government policy that puts restraints on international trade in order to protect its local products from foreign competition.
The policy works by imposing tax imports which naturally increases the price of these international goods. Other means of execution is by setting a quota on imported products. This will restrict the amount of imports coming in of the country. Another practice of this policy is imposing lower amount of tax to its local products which allows our manufacturers to sell or price at a more competitive rate. Overall, it aims to encourage consumers to shift preference and buy local products. Protectionism not only encourages more local business ventures but also helps manufacturers as it increases demand and ultimately, creates more jobs opportunities for domestic workers.
Despite its benefits, there are, however, questions on whether it is the best way to go especially in struggling countries and whether or not it is sustainable in the long run.
One factor to consider would be the rate of progress. Is it more advantageous to rely primarily on local production when imports can also offer an equally good or in some cases even more employment opportunities? What will the government do when there is an immediate need or demand and local production is low? Unless the government has means of subsidising local manufacturer’s needs, even with high demand, production may still be slow due to lack of immediate finances to purchase supplies and even hire for manpower. This will then slow the growth of local manufacturers and can possibly lead to scarcity.
The quality, quantity and the value for money of local products are also compromised when there is less competition. Manufacturers may not innovate to provide better products since there is less exposure of what is better and available out there. The law of supply and demand then also follows and eventually, prices of these local goods and services will go up.
Many things to consider in the execution of Protectionism and to what degree should it be practiced. At a certain point, we, as settlers of our country, feel secure that the government is finding ways to protect our business. The country’s very own should be put into good use and be patronized especially when resources are available. It is one thing to be proud of what you have and another thing to be proud of what you’ve made. Also, the government should be able to provide adequate support especially to small businessmen in-order to sustain the demand. On another point of view, it is also healthy to have a little competition that will help keep the production of better and sufficient goods for consumers needs. It is great to be a self sufficient country but when faced with scarcity, it is wise to have help. Hence, Protectionism is helpful to any country’s economy when managed accordingly.