World Development Report 1984
World Development Report 1984
World Development Report 1984
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Box 3.2 Trade as an engine of growth<br />
F- rci-n trade a.r h ,-r anengim .td -:r,iitih te%p-,rt4I iet Ch3pter 5ih bh' - en am-rnr_ EWprt srt-chure oi ewleced developing<br />
inm die 1pin, mentri' inrouch ii4 ifett -*-ur.iri-s that traditicinalle specialized in countries Iperenht<br />
n. npr- ir rd . iuri:e all'atic-n l and a ,ngle pnrr.arv e -port manulataure-.<br />
i rene-i-ad prc-iducri' i, But dt -eliping are gainin.g a .cantfi:.. char.: .\ grAup-<br />
*:-uiti-ps *:port ;ire nc- me-`:hinc alI, *-t -e r. ,uch *-u tLntrie including<br />
linke-il I t., r..-. ih and le.:l oi Pr, India .hich ,cc-unt lr.hr athcul .u it<br />
-<br />
prtin ad,anco.d n.rinii:. thrd ti deeliping-c-iuntr pipulalie-n 4n. ;<br />
In rhe n,net-. nrh -:Enrtir mn the- U nited it -ldding Ch,nai has managed tc- rirsr ; 4<br />
iat-.:s chani-- irn e pnrt; ILcgad hEhind the .h3rt .t rmanutacturt. in abcoutli<br />
c:l-nge, in rir- m rt r-h, e:.intmu per-ent .l nontuel .p-nt mee chrtti<br />
F -.-. rr.tniaintd a mnall and reline ':le Atri-- is he .inl r. gi r in e- ht, h 1i<br />
-nin,,snt ;hrt i-.(reice,Frnti In d .:pindonic i-n a ;inglt primat | . p ii t<br />
.Ci-<br />
Au'rrtiit. r Jr-i th .- dirninated bi, his n.-i i,mini,h-d<br />
ntrt Inal r1ar.--r .\Ith..h \rzntn I hi- d r-,iatin a-. tri.m primr. a n. oiid 'r1<br />
ei-'- mier- --i -1rcv. p-i riTt r lb h y, l. pr-i-ucts di-es r,r mcan bhar te-retci,.n<br />
: n,,Iar - ih.,v -.t thI: Uniii..d tai,s .rd Jan.-,nd n--- lingEr matlar, Fng.r 4.l.<br />
r :9,<br />
*-pitted ;.mmli r p - iidu in ih, Ie' i ball o, iuntri, Japenid ..n de. -iiect-p c-iinlre ;<br />
tF ' -<br />
t ii r-, ninctr-rith -.nrtir. it krei ltil mnrkte r.hr lh.ir manita. turtd r ki-rt-<br />
In the tree, i r h-ur decades pr-cedintg .h. irt -ri n 1lc-tiat,.n, in ihe dnand ir i..r<br />
* rId I \ : rItra.de -il de. nl-pIng cu.Ln- t hi.:it r pi-tsr due ru , iuctuatI.: , ine fl ]<br />
tri4 r'c. alro,-i:it1- tait .i th,i -i da.-c-l- :r. i- ti inr indu;tril ci-iintrie; ctisu can n r! , !l .i,- e ,.H .. iic... -,. i i.c<br />
d d.. intrlie; I Fpercent d-..-id .:..n- imprrintr ut . thB dri.:r iti.in ,,i k-l -c--i -Heir-re .;.ii- It. *<br />
3 r i. ii 4l, prtcen rI In rtlattcin t1. epxprtt te.- ar-i rnnuil3tures ha- ,- - *<br />
Crij'J -r. Zn tr.ad'- a i. mLmirt r, rtia- h.1-an-ii thr medium.- nd lc-n g-ricon;.-<br />
.il,. in the dt; 1i.pina . -untite- than in paite pi.,in a dae-:I-pirg-cc:unirx I<br />
|ji I lior d ..ini- r p-rri -n Ji E-eli.ip :iiiirnir .- malrl , .i ni-me in de.e-l, I ..p. -untrnit in the,<br />
Thb- -prtinc p-<br />
le ..- pn r .- lilie Thi maneiactut-:d \po.itt ac*r-unt i.'.. 1I-l's and r 1 id : .InD- I-n-: -c ;<br />
rInc - \ar 11 tuth,:c thai lie--ihar. tani -r pFpartintci-nsunip- e p.V. ircteae-dt. ia-t in Irnraiin<br />
-mn-.pi,: I,ni* L- -,i e--:en ic- epn- r<br />
ir in de: lI.p-e Ltiunir4es and are sut- I.- de-. -l 1ip. -.-untrt in-:- m in ih<br />
tr. * pit-' ind inci-,t zii..rh it- ili ilirtites i9r c.--.d- pr.idu-Jd , thir. I blc. tir eai:h I per-:--nt -:hange- inn rnl<br />
ini -t.3rial -2--uniri-:; d-- nit ad-: -.ale . i-i' , d-1 , .dn tien- s lcing a- ,r-arkt I- nt. me in de elIc-ped .. c-unirne- th, * *o<br />
| ~l-.pI r. .n - pinperti-.rncn.:e Th. e nene i. ir .r -dcping cnun tilutured ti .i.t li-m ! ),-piny-c -untr e p rr ittI<br />
I.1 : -. I c c, Pe t V-e.i, hi p.m-n- ep itt r, tena.in relai i ira: crit prciect- inctr-ased bh -nl-. u p:r:.-en' ir. th<br />
i-c th-a. dJ . I--pin,-cc-Lir. --pL-ris Ir it tartjr- T*r - rnil demiand nr iin- Ie-ilt- bu th, I - per:e.r in iht I<br />
pr.imir p iil t, rgu in<br />
InI . ill. acJien.d-.1 --- .iu. inc .-rie But<br />
-- i n- l iunit -je.i-I-png unri Nanitactiur-d pi:rts ir- .niei.eliiir,<br />
c.:untrtas intreas,d .t I.- iclt rhi am- !manutct.t:ur--<br />
tiida-. act-: tint rtt ahc-tit thee fltt peri-ence t he In -- arnd i c-nrc on the d.-te--pad cip nrie- t in th,<br />
|h .it: :u'.- - ni n-u . .:-.I p-ri r.-.n; heat- this .ut Thir- h3a han nc lathl- 1bm1, tut had 3lrn,.-. i.e mn th- JIJr rate<br />
di elp-inc .c.unr muntrie* t % . iem,<br />
r,- i.l tluti hrt the e .r.. u at -inc--me c-t Jle--ped c.i-unrrie in ll: I<br />
ac:cmunt i. r a lar r, i p rt un iiin .trVi, de.-cntr.r-. epirt - and re il1CiC<br />
and maintaining cooperation on debt problems, rowers. While adjustment requires action by the<br />
rather than confrontation. indebted country itself, the degree of retrench-<br />
In the short term, the position is somewhat dif- ment and its cost to the country also depend on the<br />
ferent. Given the effects of the recession and the external environment in the next few years.<br />
growth of debt, debtors have to show that they are Because of the large current account deficits of<br />
prepared to pay interest out of their own income. many developing countries in the early 1980s, sub-<br />
This is necessary not only to anchor the value of stantial adjustments have been required to cover<br />
debt in the willingness to service it but also-in the interest obligations. The best way to have adjusted<br />
context of high real interest rates and of low would have been to combine cuts in spending with<br />
growth in indebted countries-to avoid explosive policies to switch production into exports and into<br />
growth of capitalized interest in relation to GDP. efficient import substitution. Switching usually<br />
An adverse world environment, however, makes requires a real depreciation in the exchange rate<br />
more costly the adjustments required of many bor- (see Box 3.4). The process is less costly if it does<br />
43