Kamal Malhotra
EcoFair Trade Dialogue Discussion Papers, No. 4 (Heinrich Boell Foundation, in cooperation with Misereor and moderated by Wuppertal Institute)
This paper takes a human development lens to the analysis of the role of exports in the context of an overall development strategy for developing countries. The central message of this paper is that national export strategies should be designed according to the particular circumstances of each country, in particular its stage of development and range of endowments and capabilities, so as to maximize both the establishment of a competitive and diversified domestic industrial (including agro-industrial) base and its contribution to the sustainable human development of society. The costs and benefits of exports are discussed and an important distinction is made between export-led economic growth strategies and export-orientation as one part of an overall development strategy. A clear preference for the latter is expressed in this paper.
The various potential positive roles of exports (i.e. employment generation, technological dynamism, demand expansion, a source of development finance) are highlighted as important contributions to a country’s economic growth and development. However, it is argued that such contributions are not automatic and their impact on poverty reduction and human development goals will largely depend on the actual quality and character of both economic and export growth. The two way linkages between trade and human development are also explored in the paper, with particular emphasis on the importance of investments in health and education, including tertiary education, with a view to creating a skilled and healthy workforce.
The successful experience of North East and South East Asian countries in harnessing trade and export expansion, as one means of spurring a virtuous cycle of economic growth and development, is discussed. It is emphasized, however, that while exports were one part of an overall development strategy in North East Asia, several other policy incentives were used with the principal aim of promoting the profitability of private investment. Public intervention is also viewed as key to ensuring that the contribution of exports, in both the industrial and agricultural sectors, is strategically channeled, in the context of a broad national development strategy to ensure sustainable economic growth and enhance broader human development outcomes.
