Effectiveness in achieving EOI

Question 1

GI effective in instituting financial policies for export promotion (Thai and Sg)

Answer 1

[T] : 1980-1981, devaluation of the baht amidst strengthening USD,
- moving into the late 1980s, increased share of USD in the basket to take advantage of depreciating USD after the Plaza Accords
- → Manufacturing as a percentage of total exports increased from 1.2% in 1960 to 32% in 1980 + 10% consistent export growth rate over this period

[S]:
- 1976 Export Credit Insurance Scheme: Covered against risks for exporters
- 1976 Small Industries Finance Scheme: Provided credit for smaller industries
→ manufacturing went from 13% to 29% of total GDP from 1960 to 1980

Question 2

Scaling back of GI effective in promoting FDI (SG MY)

Answer 2

[S]:
- 1978, allowed for companies operating in SG to have 100% foreign ownership and removed restrictions on capital flow, attracted even more FDI
- 1976 Export Credit Insurance Scheme: insured exporters against risks, leading to 70% of total exports by foreign companies by 1976

Malaysia:
- Free Trade Zone act in 1971 offered tariff free platforms (for firms which exported at least 80% of their outputs), led to a surge of 20% in FDI in both textile and electronics exports by 1975

Question 3

Scaling back of GI effective in ensuring deregulation to increase exports

Answer 3

Vietnam
- Doi Moi in 1986 VS in the 2nd 5 year plan → market-oriented economy = prices of key commodities were no longer subsidised and determined by market forces
- Foreign Investment Law 1987 allowed foreign investors to operate in Vietnam, and foreign property was guaranteed against nationalisation for 20 years
- 1999 Enterprise Law simplified procedures for establishing new privatised companies

→ production share of non-state sector rose 5% from 2000 - 2004
→Economic growth doubled to 1990 to 6%
→International trade doubled to 2 billion
50% primary industry to 25% primary industry from 1980s to 2000s (EOI)