Writing Feedback / IELTS: Should the government subsidise heavy indsustries to improve economic development? [7]

Over the past few years, as a result of economic depression, especially in developed countries, many firms bankrupted and their employees had fired so the economic growth rate had fallen dramatically and the huge amount of money in terms of welfare services has been paid to unemployed people by governments too. To deal with such difficulties, a number of economists argue that all sorts of subsidy instruments must be paid to heavy industries. Despite admitting this argument, I believe to improve the efficiency of such stimulating aid, more comprehensive plans must be devised by both administrations and policy makers.

To begin with, a number of governments have employed many means to pursuit of a variety of policy goals, including encouraging news industries, propping up declining ones, encouraging activities such as R&D. By providing some kinds of financial and non-financial aid ( like grants, tax concession and so on) not only a number of new establishments could be set up by some newly adventurous investors, but also some companies that encountered with economic problems could be managed in a short term. Furthermore some kinds of R&D activities could be conducted to innovate new goods and also modify the current situation of private sectors.

Secondly, some national and regional development such as increase in employment rate and income could be achieved through attempting to equalize economic imbalances. In fact there are some inequalities in wealth distribution due to lack of investment in areas that have a great potential both labors and land to do best. If governments financed some heavy industrial projects in such regions, not only many employment opportunities would create but also the income of local poor residents would increase therefore the quality of life and standard of living would increase.

Nevertheless much special attention must be paid by both policy makers and administrations. If the governments want to achieve their goal in such field, firstly for subsidy allocation a comprehensive economic policy must be legitimated by policy makers and secondly a restricted and complicated monitoring and modifying plan must be devised by officials. Therefore the effectiveness if such financial aids could be examined whenever needed.

To sum up, many economic problems have raised since economic depression. Despite paying subsidy to private heavy industrial sectors, the efficiency of such financial aids must be examined. If the officials do so, they could expect higher national economic growth rate and lower economic inequalities.