Modern Worldwide Shipbuilding Industry In Egypt

Modern Worldwide Shipbuilding Industry In Egypt

In the 20th century, shipbuilding (which encompasses the shipyards, the marine equipment manufacturers, and many related service and knowledge providers) grew as an important and strategic industry in a number of countries around the world. This importance stems from:

* The large number of skilled workers required directly by the shipyard, along with supporting industries such as steel mills and engine manufacturers; and

* A nation's need to manufacture and repair its own navy and vessels that support its primary industries

Historically, the industry has suffered from the absence of global rules and a tendency towards (state-supported) over-investment due to the fact that shipyards offer a wide range of technologies, employ a significant number of workers, and generate foreign currency income (as the shipbuilding market is both global and dollar-based).

Shipbuilding is therefore an attractive industry for developing nations. Japan used shipbuilding in the 1950s and 1960s to rebuild its industrial structure; South Korea started to make shipbuilding a strategic industry in the 1970s, and China is now in the process of repeating these models with large state-supported investments in this industry.

As a result, the world shipbuilding market suffers from over-capacities, depressed prices (although the industry experienced a price increase in the period 20032005 due to strong demand for new ships which was in excess of actual cost increases), low profit margins, trade distortions and widespread subsidisation. All efforts to address the problems in the OECD have so far failed, with the 1994 international shipbuilding agreement never entering into force and the 20032005 round of negotiations being paused in September 2005 after no agreement was possible.

Where state subsidies have been removed and domestic industrial policies do not provide support, in high-cost nations shipbuilding has usually gone into steady, if not rapid, decline. The British shipbuilding industry is one of many examples of this. From a position in the early 1970s where British yards could still build the largest types of sophisticated merchant ships, British shipbuilders today have been reduced to a handful specialising in defence contracts and repair work. In the U.S.A., the Jones Act (which places restrictions on the ships that can be used for moving domestic cargoes) has meant that merchant shipbuilding has continued, but such protection has failed to penalise shipbuilding inefficiencies. The consequence of this is contract prices that are far higher than those of any other nation building oceangoing ships.

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