Arguments for (merits/advantages) for export promotion industrialization strategy
- It encourages the exploitation and utilization of domestic idle resources. This is because as production for the export market increases through the vent for surplus theory of international trade, the exploitation of local resources increases and this leads to economic growth and development.
- It widens the tax base of the country. Export promoting industries widen the tax base in form employment opportunities created and various investments undertaken hence generating more tax revenue to the The revenue realized is used to construct social and economic infrastructure like hospitals, roads, schools, power plants, roads etc.
- It facilitates technological progress in the country. The strategy encourages the use of modern production techniques through research, inventions and innovations to produce high quality commodities which can compete favorably on the world market.
- It improves the balance of payment position of the country. The strategy encourages the production of commodities for exports. This increases export earnings hence improved balance of payment position.
- It increases the foreign exchange earnings of the country. The strategy encourages the production of high quality commodities for exports through value The foreign exchange reserves can be used to import capital and other manufactured goods from other countries which the country cannot produce.
- It increases employment opportunities. This is due to increased resource utilization, production and other export activities carried out. This is true if labour intensive techniques of production are employed.
- It leads to the development of social and economic infrastructure. The strategy promotes the development of the social and economic infrastructures in form of roads, schools, hospitals, financial institutions required for export promoting industries.
- It promotes self-sufficiency and reliance of the economy. Through increased production for exports, the country is able to generate revenue which it uses to develop its sectors hence reducing over dependence on other
- It promotes industrialization in the economy. The strategy encourages the establishment of manufacturing and processing industries hence contributing to the country’s industrial development.
- It facilitates the development of skills for local entrepreneurs. This promotes managerial capacity building through on job training and helps to reduce government expenditure on training costs.
- It encourages diversification. The strategy promotes economic diversification through export diversification, This widens the country’s export base and helps the country to stabilize and increase its foreign exchange
- It leads to the production of high quality products. This is because of the competition export promoting industries face in the world market with the commodities from other This leads to improved standards of living.
- The strategy enhances commercialized production and this helps to reduce the size of subsistence sector in developing
- It promotes international relations and cooperation among countries through This enhances peace and economic stability among trading partners.
CATEGORIES Economics
TAGS Dr. Bbosa Science
