Exports as an Engine of Growth
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Exports as an ENGINE of growth – Critical Analysis
XLRI Jamshedpur
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Most important source of foreign exchange…Creates employment opportunities…Improves intra-industry trade…Speeds up country’s industrialization…Integrates the country with world economy…
Introduction…
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Boosts economic growth – GDP & Per capita income
Improvement in overall infrastructure Efficient resource and capacity utilization Achieving economies of scale Technological advancement through competition
Exports and economic growth…
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South KoreaChinaJapan
Exports led success stories…
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1960s – export promotion policies initiated through subsidies 1960s – emphasis on labour intensive products 1970s – shift towards heavy and chemical industry products 1980s – fillip to R&D 1990s – focus on capital good industries and market reforms 2000 onwards – leader in high technology ICT products
South Korea – The miracle on the Han
river…
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Low import content in exports Fragmentation of production Foreign Direct Investment Focus on growth extensive products – ICT World class infrastructure
China – the export dragon…
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Battered after World War II Often called as “Economic Miracle” Govt. promoted large scale production Overwork culture Govt. introduced “Export Contest” to combine benefits of
competition and cooperation
Japan – the export Samurai!
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MexicoPakistanAustralia
Export let downs…
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1930s to 1980s – Strong protectionist trade policies 1980s – Inflation declining standard of living and debt
crisis 1990s – currency devaluation and NAFTA 1990s to 2008 – key exporter to USA 2008 onwards – economy takes a hit
Mexico – The long tail of North America…
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One of the most Potential Economies in the 1960s along with South Korea
Political Instability and Corruption Lack of Vision towards Economic Growth Failed to Invest initially earned revenue
Pakistan – A growth story that never took off…
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Beyond 2000…. Commodity boom Sharp currency appreciation Impact on export competitiveness Failure to invest in future growth areas
Australia – The Dutch disease victim…
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Conclusion
Government Policies Government lacking vision
Strategic Focus Lack of Strategic focus
Laborious and focused workforce
Political Instability
Fragmentation & Diversification of
Production
Strong protectionist trade policies
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Thank You!