Interventionist EOI Flashcards
Define export oriented industrialisation
Growth strategy based on targeted government support to export industries
What is the essence of EOI
Encouraging growth of hi tech and low tech manufacturing industries that make use of their comparative advantage
Whilst trying to find markets in which they can sell their products to buyers elsewhere
These manufactured goods have income elastic demand and should generate export revenue required to sustain a growing level of imports
What are the benefits of EOI
Prompts faster growth —> demand in EOI is limited only by the size of the global economy
Promotes competition —> increased efficiencies, EoS, product improvement and technological change
Attracts foreign capital and expertise
Generates foreign exchange that can be used to import goods in which the economy needs
What are the problems of EOI
MEDC response is usually protectionism to low cost labour advantages in LEDCs which stops free trade
