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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Protectionism Against The Economy

30 March, 1999 - 00:00

Light industry was last week's hit. The President himself
came to its defense by imposing a fixed tax and special labeling requirements
for imported goods. The Ministry of Industrial Policy, champion not only
of industry but also of the state budget, promptly calculated that the
implementation of such protective measures in the sectors having short
capital turnover periods "will make it possible to expect their annual
production growth at up to Hr 16 billion, which in its turn, will make
it possible to bring Hr 3 billion to the budget in taxes". Interestingly,
last year the volume of production of marketable goods by light industry
enterprises was Hr 1.17 billion (that is, 2.5 times less, than the expected
tax revenues).

Thus it is not ruled out that today as the latest move to defend domestic
producers we are in for another round of protectionism and pressure on
importers, including, including individuals supplying light industry products
to the Ukrainian market. However, experts in the Ministry of Foreign Economic
Relations and Trade believe that intensified state regulation will make
this market flee into the shadows. This dubious benefit will, of course,
impact on customers, especially, the solvent ones, who are now accustomed
to dress up, say, from Pierre Cardin. The experience of neighboring Belarus,
whose government has been taking similar measures, shows that they fail
to bring about any positive results at all.

The topic is continued in the Economy/Finance section (page 5).

 

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