EXPORT ORIENTED INDUSTRIALIZATION (EOI)

Export Oriented Industrialization (EOI)

Export Oriented Industrialization

Worldwide the makers of policy are investigating the lessons learned from the enormous success of East Asia on economic. In several cross-country studies recently published have sought to identify and analyze policies that explain this success. These include East Asia Miracle, published by the World Bank is based in part on the project entitled "The lessons of East Asia." Several clear contributions emerge from this set of country studies. It highlights considerable variation of 105 economic approaches adopted by this group of economies in East Asia. For example, some took a significant degree of state intervention and not others. Studies rule out the idea that the successful model of East Asia is unique or uniform. (Aghion, 2007, pp.12-19)

Various economists have shown that a core set of economic policies, such as macroeconomic discipline, outward orientation and training of human resources, laid the foundation for the success of East Asia. The pragmatic formulation of policies, understood as non-ideological and reversible, appears to be the first heart of these policies, and is worthy of imitation. The economic success has been achieved at the expense of social justice at home. It has been argued that wages were lower in Asia and governments had pursued a draconian policy to suppress consumer demand and force a very high savings rate. However the distribution of income quickly began to catch up, in country after country, when they reached a certain level of prosperity. Taiwan and South Korea have strongly decreased income inequality over the last generation in Taiwan entered the richest 20% fifteen times what the poorest 20% in 1952, but the multiple fell to 4.2 times in 1980. (Bramall, 2009, pp.39-48)

Success depends not only on access to markets, and markets alone can not generate an export-oriented industrialization. In East Asia effective government action has been crucial to achieving a rapid accumulation of capital and export growth. A considerable effort was necessary policy in the early stages of industrialization and export promotion, though competition derived from the abundance of labour or natural resources. (Roslan, 2004, pp.75-80)

The successful passage to higher levels of the international division of labour has been conditioned on the ability to face increasing challenges, through investment policies, trade and technology. The interaction with foreign companies has been an integral part of the success of East Asia. However, it is clear the diversity of experiences in the region, particularly in regard to foreign direct investment. This investment has contributed relatively little to technological advancement where they have been adopted laissez-faire policies, but has been a significant factor elsewhere. These countries, through the strong role played by these investments have been successful in high-tech exports, but only because they are confined to assemble semi-finished products imported high technology using cheap unskilled labour. (Corsetti, 1999, pp. 305-373)

This situation is already causing a review of policies in these countries, inspired by the example of the four "tigers." Unless that foreign companies be persuaded to improve the technological ...