Exports as an ENGINE of growth – Critical Analysis

XLRI Jamshedpur

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…

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…

South KoreaChinaJapan

Exports led success stories…

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…

Low import content in exports Fragmentation of production Foreign Direct Investment Focus on growth extensive products – ICT World class infrastructure

China – the export dragon…

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!

MexicoPakistanAustralia

Export let downs…

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…

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…

Beyond 2000…. Commodity boom Sharp currency appreciation Impact on export competitiveness Failure to invest in future growth areas

Australia – The Dutch disease victim…

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

Thank You!