At the end of the last century, Hong Kong, Singapore, Taiwan and South Korea attained higher rates of economic growth than other developing countries. It could be because of a close correlation between export expansion and economic growth, but are they automatically associated? What is the importance played by trade in the economic development of these countries? Classical view says that the growth of trade brings an economic growth, but maybe there is not relevant link between trade and growth. In this paper we will critically assess the role of the trade expansion in the economic growth and development. In a first part we will criticize the linkage between export growth and economy, after we will assess the trade policies on industrialization and development. The third and last part will evaluate the impact of trade on other indicators of development such as the ones which compose the Human Development Indicator.
[...] Trade and Human Development Now we can say that instead of looking at exclusively the linkage of trade and GDP, we can observe some other elements that are part of the development such as poverty, education, purchasing power or health which are without a doubt important in the economic development of countries. If we look at Figure we can see that Hong Kong, South Korea and Singapore have all of three the highest rate of HDI of Asian countries. We can even add that the HDI of Hong Kong was quasi similar of the United States one for the same period. [...]
[...] & Bosworth B.P. Economic Growth in East Asia: Accumulation versus Assimilation. Extract from: Brookings Papers on Economic Activity Issue 2. pp.135 to 203. Lee C.H. & Naya S.Trade in East Asian Development with Comparative Reference to Southeast Asian Experiences Extract from: Economic Development & Cultural Change, The University of Chicago. Volume 36 Issue 3. pp 123 [...]
[...] Ranade p.3 Conclusion It is difficult to establish clear link between trade and economic growth, because even if the development of trade played a more than important role in the economic growth in EAC and neoclassical view see trade as an important factor, if not the most, of economic growth, it will be untrue to say that the development of export procure large incomes in all cases. W. Lewis (1980) sees trade as an “engine of growth” whereas J. Riedel (1994) sees it only as a “handmaiden of growth”. [...]
[...] As we can see of Figure South Korea and Taiwan represent the best growth of the average years of schooling between 1960 and 1994 with respectively plus 6.5 and 5 years. We can say that the trade policies conducted by these countries allowed the population to be more educated and so it contributed to the development of their economy. Taiwan instead of direct intervention in market and trade decided to support the development of science and technology. “Taiwan focused on facilitate the inflow of advanced technology and on support its implementation by establishing a science based industrial park” (Lee & Naya p.17). [...]
[...] Once again manufacturing of products played an important role in both growth of GDP and employment: average manufacturing output in the 1970s accounted for more than 25% of GDP in East Asian countries and 22% of employment, in 1980 it represented 30% of GDP and employment” (1998, Lee & Naya, p16). The labour absorption by the growing manufacturing was exceptional. The increase of demand for labour and the rise of wages (see Figure helped to spread the benefits of growth and encouraged productive activities and attitudes; we can talk about a virtuous cycle. [...]
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