Intro ish Flashcards

(6 cards)

1
Q

what is import-substitution industrialisation (ISI)? what are the motivations behind implementing it?

A

ISI is a trade and economic policy which advocates replacing foreign imports with domestic production.

it is based on a premise that a cty should attempt to reduce its foreign dependency through the local production of industrialised products.

Underlying motivations for substituting imports with production of consumer gds:

  • relatively healthy local consumer market
  • pressure to nurture local industries in order to allow greater local ownership of economy
  • stiff competition against affordable and better quality imports from East Asian economies
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2
Q

the pros and cons of ISI

A

ISI was impt in helping to establish healthy ec growth

  • focus on expanding the manufacturing sector
  • providing a key source of employment for the early indep states

however ISI may not necessarily be the most sustainable of ec strategies

  • often bred long-term inefficiencies & stagnation; bc of
  • ISI’s over-reliance on gov support and the saturated local market
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3
Q

what are socialist, centrally-planned industrialisation strategies? what are the motivations behind implementing it?

A

focuses on heavy government intervention in controlling the economy through state enterprises. extreme cases see the discouraging of private enterprises e.g. in Vietnam

underlying motivations for implementation:

  • responding to colonial ec model of exploitation, so the gov here chooses to adopt a more active role in “addressing” the gap in ec ownership)
  • Ideological reasons and motivations of leaders (Viet: Communist ideology; Sukarno’s Indo: fear of neo-colonialism; Ne Win’s Burma: Socialist leanings)
  • lack of skilled ec bureaucrats in providing advice to inexperienced govs
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4
Q

pros & cons of socialist, centrally-planned industrialisation

A

pros

  • efforts to ensure some degree of socio-ec equity
  • greater emphasis on ensuring transfer of ec ownership into local hands

cons: failure to even ESTABLISH sound ec growth in the first place
- ill-advised policies led to misdirected industrialisation strategies, and lack of incentives among the labour force
- –> use as contrasting CS to prove the imptance of effective ISI strategies under capitalist ecys in ESTABLISHING ec growth

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5
Q

what is export-oriented industrialisation (EOI)? what are the motivations behind implementing it?

A

EOI is a policy aiming to speed up industrialisation process of a cty by exporting gds for which the nation has a comparative advantage.

motivation: to sustain the long-term efficiency of ec growth

prevalent in ecys like SG, M’sia & Thailand, a lesser extent in Indo and Philippines, making the shift to EOI relatively later.

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6
Q

stages of ec dev in general

A

stage 1: establishing ISI or socialist, centrally planned industrialisation
stage 2: establishing EOI
stage 3: ability to sustain stability of economic growth
- effective regulation of fin. sector as bulwark agnst ext fin. shock
vs.
- ineffective regulation of fin. sector, crony capitalism resulted in greater susceptibility of ext fin. shock

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