Markets do respond to need, and competition is a very healthy force for improvement, but market functioning can be impeded by poor infrastructure, uneven regulation, natural or regulatory monopolies, and even cartelization. While enlisting competitive forces wherever possible to compete for the bottom of the pyramid’s business, as a development central bank we also need to offer a supportive hand.
On average, business confidence of non-manufacturing firms is on an upward trend. Small firms in both the manufacturing and non-manufacturing sectors are expected to show continuing growth in profits in fiscal 1996. However, while business confidence of manufacturing firms continues to improve moderately, that of non-manufacturing firms remains virtually unchanged partly as a result of uncertainties about the outlook for public-sector investment.