1. What is the policy of import substitution? Has this policy worked for the developing countries? If not, what are the problems of this policy?
2. Mention any two benefits of export promotion policy.
1. Most LDCs have for various reasons ignored primary-export-led growth strategies in favor of development strategies for import substitution (IS). Such policies are aimed at promoting rapid industrialisation and, thus, growth by erecting high barriers to foreign goods to promote domestic production. A policy package, known as import substitution (IS), consists of a wide range of regulations, limitations and prohibitions such as import quotas and high import tariffs.
The trade restrictions are meant to "protect" domestic industries in such a way that they can achieve comparative advantage and replace domestic goods with goods previously imported. IS policies are primarily based on the belief that economic growth can be accelerated by aggressively moving economic activity towards manufacturing away from traditional agriculture and resource-based sectors of the economy.
Obviously, the wide range of tariffs, quotas and outright import bans which are part of IS policies are not a form of protection for the infant industry. The claim in the infant industry notes that sectors and industries which can reasonably be expected to gain comparative advantage should be covered after some time of learning.
2. In any industrialization policy, job creation is a major consideration. Export-oriented companies are consuming labor in this regard, thereby helping to reduce a country's unemployment problem. Workers will be directly employed, for example, in a specific export promotion sector, as well as indirectly in related industries such as transport and insurance.
Because the export promotion industries have a broad market, they are able to make full use of the existing plant capacity. They can take advantage of the large-scale production in this way. This will result in lower costs for the production.
1. What is the policy of import substitution? Has this policy worked for the developing countries?...
What is the policy of import substitution? Has this policy worked for the developing countries? If not, what are the problems of this policy?
Mention any two benefits of export promotion policy.
What are the basic features of import-substitution industrialization? How is an outer-oriented development strategy different from import substitution? According to Krueger, what are the key reasons why trade liberalization has given a boost to economic development in countries that used to pursue import-substitution policies? Does the author agree with the view that import-substitution has short-run costs but long-term benefits? Why or why not? According to Krueger, what does it take for trade liberalization to be successful? While the author emphasizes...
Briefly discuss any two policy options for the developing countries for dealing with the environmental problems.
Blank #1: Outward-oriented or inward-oriented? Blank #2: Export substitution or import substitution? Check all that apply? 1. International trade and development Аа Aа In January 2007, the Pakistani government provided research and development support and loans to local textile companies that compete in international markets This is an example of an development strategy, the objective of which is What are common criticisms of this kind of policy? Check all that apply. If the economy specializes in producing primary products, it...
7. What four policy initiatives can developing countries implement to address population growth?
10. For developing countries such as Mexico and Brazil, severe economic problems in the 1980s were caused by: a. Low real interest rates in the United States b. High levels of income and imports for the United States c. High prices of basic raw materials and other commodities d. A fall in the world demand for products produced by developing countries 15. The ______ is a theory of the balance of payments that shows how home-country spending on home-country...
Distinguish between a tenant farmer and a sharecropper. Whose exposure to risk is greater and why? Also, Mention any two factors that determine the demand for education in less developed countries. Next, Briefly discuss any two policy options for the developing countries for dealing with the environmental problems. Finally, Briefly discuss the Prebisch-Singer thesis related to the terms-of-trade problems faced by primary good exporting developing countries.
Blank #1: inward-oriented or outward oriented? Blank #2: Export substitution or import substitution? Select all that apply 1. International trade and development Aa Aa E After World War II, the Argentine government actively supported domestic production of textiles, leather, and home appliances for domestic use. This is an example of an development strategy, the objective of which is What are common criticisms of this kind of policy? Check all that apply. If the economy specializes in producing primary products, it...
. Suppose that an offer curve diagram has developed countries exports on one axis and developing countries' exports on the other axis. Explain the predicted impact, other things equal, on the terms of trade of developing countries of relatively slow growth in demand for developing countries goods by developed countries combined with relatively rapid growth in demand by developing countries for developed countries' goods. 8. In the past, the members of OPEC have been able to raise the relative price...