Deena R. Khatkhate - The Regulatory Impediments to the Private Industrial Sector Development in Asia: A Comparative Study (World Bank Discussion Paper)

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title	:	The Regulatory Impediments to the Private Industrial Sector Development in Asia : A Comparative Study World Bank Discussion Papers, 0259-210x ; 177
author	:	Khatkhate, Deena R.
publisher	:	World Bank
isbn10 | asin	:	0821322214
print isbn13	:	9780821322215
ebook isbn13	:	9780585228631
language	:	English
subject	Industrial policy--Asia, Southeastern, Industrial policy--South Asia.
publication date	:	1992
lcc	:	HD3616.A773K48 1992eb
ddc	:	338.954
subject	:	Industrial policy--Asia, Southeastern, Industrial policy--South Asia.

Page i World Bank Discussion Papers The Regulatory Impediments To The Private Industrial Sector Development In Asia A Comparative Study Deena R. Khatkhate The World Bank Washington, D.C.

Page ii Copyright 1992 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing September 1992 Discussion Papers present results of country analysis or research that is circulated to encourage discussion and comment within the development community. To present these results with the least possible delay, the typescript of this paper has not been prepared in accordance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. Any maps that accompany the text have been prepared solely for the convenience of readers; the designations and presentation of material in them do not imply the expression of any opinion whatsoever on the part of the World Bank, its affiliates, or its Board or member countries concerning the legal status of any country, territory, city, or area or of the authorities thereof or concerning the delimitation of its boundaries or its national affiliation. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted through the Copyright Clearance Center, 27 Congress Street, Salem, Massachusetts 01970, U.S.A. The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list (with full ordering information) and indexes of subjects, authors, and countries and regions. The latest edition is available free of charge from the Distribution Unit, Office of the Publisher, Department F, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Ina, 75116 Paris, France. ISSN: 0259-210X Deena R. Khatkhate is a consultant in the Industry, Trade and Finance Division of the World Bank's Asia Technical Department. Library of Congress Cataloging-in-Publication Data Khatkhate, Deena R. The regulatory impediments to the private industrial sector development in Asia : a comparative study / Deena Khatkhate. p. cm. (World Bank discussion papers; 177) ISBN 0-8213-2221-4 1. Industry and stateAsia, Southeastern. 2. Industry and state South Asia. I. Title. II. Series. HD3616.A773K48 1992 338.954dc20 92-23555 CIP

Page iii Foreword The World Bank has come to focus more sharply than in the past on role of the private sector in member countries. There has been a great deal of discussion on this issue within the Bank with a view to understanding the nature of impediments to the private industrial sector development and to explore a fresh approach to promoting that vital sector as an engine of growth. One of the ways to clearly perceive the issues is to develop a regional overview of the private sector role in some of the countries, where its progress is held back by a variety of regulatory policies. The underlying idea of this study is not so much to deal with all the relevant policies, such as financial and trade regimes affecting the private sector or the privatization of public sector as to bring in sharp relief the impediments placed in its development by industrial licensing policies, direct foreign investment policies, labor market constraints, price controls and distorted promotional policies. While doing so, it would be helpful for the Bank, to know what changes in these policies have occurred, how they have impacted on the private sector and what needs to be done in future. However, since the regulatory policies may have different implications in different countries, it is rewarding to present a comparative picture in regard to the countries covered as done in this study. The countries - Bangladesh, India, Indonesia, the Philippines and Sri Lanka are chosen because they provide a mix of countries which need more vigorous and well defined policies to promote the private sector. The study has relied only on the available sources within the Bank and outside and therefore there has remained inevitably several gaps in information and data, which seem to have biased some of the analytical points and conclusions. Though the difficulties in developing an analytical framework were recognized, an attempt was made to discuss the regulatory policies in a mutually consistent and sufficiently representative empirical framework (drawing, of course, on the work done in the academia) germane to developing countries, in which interrelations between macroeconomic determinants of private sector development, the degree of interventionist policies and the relative role of public and private sector are clearly underscored. The approach adopted for presentation of the material is to discuss the selected regulatory policy aspects with respect to each of the countries, referring to inter-country variations and to weave the common threads of arguments in the Executive Summary. This approach also combined the macro-policy discussion with micro analysis of selected subsectors, before and after the regulatory reforms affecting them were introduced. This was done in order to capture the impact of reforms on industries more concretely and meaningfully, which could not have been possible if the impact was sought to be assessed only on a macro basis. This study has yielded some interesting lessons which, I hope, will guide not only the policy makers in these countries but also the Bank staff working in those countries and other countries where the development of private sector is awaiting more focused attention.

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