Making the Most of Existing Circumstances
Making the Most of Existing Circumstances
This chapter evaluates lessons from development thinking and experience and identifies the main reasons why past intellectual and policy frameworks failed to yield the expected results. It offers a pragmatic blueprint for allowing low-income countries to ignite and sustain economic growth without preconditions. With the liberalization of trade in the 1980s and 1990s, many domestic manufacturers could not face competition and were wiped out. Early deindustrialization became a trend in most developing countries. However, when developing-country governments leverage export-processing zones to attract the relocation of export-processing light manufacturing from more advanced economies with rising wages, as the East Asian tiger did in the 1960s and China did in the 1980s, they were able to leap into the global market immediately. By attracting foreign direct investment and foreign firms in export-processing zones, poor countries can improve their trade logistics, benefit from knowledge transfer, and make their local firms gradually competitive in domestic and global markets.
Keywords: pragmatic blueprint, economic growth, liberalization, deindustrialization, export-processing zone, East Asian tiger, China, global market, low-income countries
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