Adoption of Development Strategies Towards Industrialisation by Less Developed Countries Leaders - Essay Example

Adoption of Development Strategies towards Industrialisation by Less Developed Countries Leaders Name Institution Course Date One of the major indicators of economic growth of a nation is its industrialisation level. The major reasons for augmented variance in standards of living between the developed nations and less developed nations is their industrialisation level. It is only after the end of World War II that less developed nations wilfully adopted industrialisation tactics for the purpose of economic growth and to safe the nations from their vulnerable reliance on export of few products and import of valuable manufactured products. Several reasons can be put forward in explaining why leaders of less developed countries opted to implement strategies that will make their nations industrialised. The reasons include volatility of trading terms, erosion of international trading systems hence affecting their primary commodities which had low income elasticities and vulnerability of the global economy. These leaders also saw the need to lower their dependence on imports and industrialisation became a way for achieving this end. Technology and the benefits that industrialisation brings also play a role in making leaders of less developing countries to adopt industrialisation strategies. This essay discusses reasons why many leaders of the less developed countries adopted development strategies geared towards industrialisation (manufacturing). Industrialisation has been widely adopted all over the world because of the benefits it brings to a country and the global economy. Lin (2013, p. 812) asserted that industrialisation is represented by a process of ‘intense development of industrial activity’. He continued to argue that industrialisation pertains to social and economic change process whereby transformation of human society to industrial age from a pre-industrial one is done. Several leaders of less developed countries embarked on the process of industrialisation from the Second World War onwards for several reasons. Since World War II, many countries economies were hampered by market failures (Lin 2013, p. 812). Developing countries adopted strategies for industrialisation which will help in achievement of sustained dynamic growth in mitigating challenges of market failures. Leaders of these developing countries were advised to adopt import substitution policies as a way of accelerating industrialisation and aim to be at par with other industrialised countries. The reasons why many leaders of developing countries saw the need of adopting development strategies geared towards making them industrialised are many and were borne out of several circumstances and reasons. Developing countries began their journey towards industrialisation late with import substitution being adopted as a strategy of development immediately after World War II (Abrol 2010, p. 44). The colonialism faced by these countries became a reason for undertaking projects towards autonomous national development. According to Chibber (2011, p.239), manufactured goods from less developed nations faced tough tariff obstacles in developed nations thereby making these markets less attractive. They felt that the prices of primary commodities they exported were unfairly low. These volatile terms of trade for primary goods exports propel them in adopting development strategies towards industrialisation. The period between 1950s and 1960s registered scores of developing nations which rejected connection with their colonial past and their market systems. Leaders of developing countries identify the need to lower their dependence on imports from the developed nations. Gilpin (2007, p. 138) identified that less developed nations aimed for more self-sufficiency and less dependency. They realise that they can achieve this end by adopting developments strategies towards industrialisation. In late 1920s and early 1930s, the global economy became vulnerable as the global market fall due to global depression. Many developing nations claimed that the international trading systems were largely distrusted and likely to deplete these countries further (Dunn & Mutti 2000, p. 248). In response, leaders of developing countries made steps that would make them industrial nations. Many developing nations produce primary commodities which have low income elasticity and its production lacked self-reinforcement growth mechanism. Hollingsworth (2007, p. 6) explained that manufacturing of labour-intensive consumer products such as footwear, clothing and textiles became less economically viable in less developed countries thereby instigating manufacturing of high-valuable products such as electronic elements. Import obstacles such as tariffs posed a challenge to trading for developing nations. Most developing nation sought to direct and lead the procedure of industrialisation with strong upshots for tax policy. The policy makers utilised the tax system to attain wealth redistribution and to widen the domestic market for manufactured goods (Eaton 2008, p.71). During the period after World War II, liberalisation of the banking sector and admittance of foreign banks took place in developing countries. Export-oriented industrialisation kicked off in 1970s in the Asian countries and banks were liberated and foreign banks were allowed in the domestic markets to encourage savings (Hollingsworth, 2008, p.6). In addition, improvements of technology through the Green Revolution in agriculture converted many developing countries from being food importers to exporters. Technology advancement allowed developing nations to shift labour into manufacturing sector. This labour was in abundant making leaders of developing countries to strategise on how they can use it in industrial sector. After the Second World War, the governments and leaders of the developing countries started intervening extensively in their economies with the purpose of spurring their industrialization process. The intervention strategies that the leaders of these countries took consist of complete economic wide plans and comprehensive industrial policies (Maio 2008, p. 4). In this case, industrial policies are those policies that seek improvement of free market outcome, modification of production structure and country’s export sector. During the twentieth century, advances in both technology and organization have greatly improved production in manufacturing sectors of more developed countries. These advances involve division of labour into more minute tasks and jobs organizations along moving assembly lines (Hodson & Sullivan 2008, p. 415). The industrial growth in the Western countries generated an increased demand for primary products from the less developed countries. The less developed countries exports were primarily mining and agricultural products to more developed countries. Leaders of less developed countries began adopting developing strategies towards manufacturing of products from their vast sources of raw materials instead of exporting it to more developed countries. Advances of technology in 1940s, 50s and 60s in transport, communication and infrastructure sectors expanded trade opportunities. Developing countries became the main importers of finished manufactured goods from the industrial economies. Additionally, they also became over-dependent on manufactured goods from the developed nations. Leaders of less developed countries saw the need to break this overdependence and adopt strategies for their own industrialisation. In the end, as Szirmai (2005, p. 306) describes it, ‘industrialisation became synonymous with economic development, wealth, international dominance, technological leadership and political power’. Industrialisation was therefore associated with development. Governments of less developed nations started forming targeted industrial policies that was considered to induce structural changes, improve firms’ performance and boost economic growth (Maio 2008, p. 4). In achieving these objectives, government of developing countries intervene to tap the opportunities technological and scientific innovation offers in exploiting their resources for industrial purposes. Most governments in the developing countries sought to promote industrialisation mainly after the World War II for economic reasons that industrial economy offers. Industrialization raises national output, incomes, and productivity in a country (Mountjoy 2007, p. 26). It is to be noted that major reasons for industrialization played a key role in pushing leaders of developing countries in their quest to adopt strategies that will lead to industrialization and enhancement of manufacturing sector. Industrialization is regarded as a major strategy used in achievement of faster economic growth and higher standards of living (Mountjoy 2007, p. 26). Therefore, leaders of less developed countries instituted development strategies for industrialization purposes in achievement of above benefits. Lin (2013) describes the strategies of many East Asia countries as ‘export-oriented development strategy’ after World War II in moving towards industrialization. They abandoned the prevailing import substitution strategy in this quest. The period after the Second World War saw a bewildering proliferation of states. Number of independent countries resulting primarily out of several decades of decolonization after the war increased significantly. Most countries in Africa, Carribean, Asia and the Middle East faced serious problems which mainly stem from colonial legacies. They fall into the bracket of less developed countries. Leonard (2006, p. 459) explain that former colonial powers left behind national boundaries that from time to time disregards the natural divisions that exist between peoples historical, geographic, racial, religious, cultural, ethnic and tribal. Hence, they remained internally fragmented and level of domestic industries and markets development were generally very low. Furthermore, social development indicators such as per capita incomes, infant mortality and death rates, literacy levels, access to food, water, health care and sanitation were all correspondingly low. These forced leaders of these developing countries to adopt their development strategies tailored towards industrialization. In moving towards industrialization, these countries would reap its benefits including improvement of nation’s well-being and attainment of higher standards of living and quality education. Three major events in the world occurred between 1913 and 1950. It encompasses two World Wars, that is, World War I and World War II and the Great depression. The international trading system that had transmitted growth impulse all over the world through liberal economic system was broken down (Hodson & Sullivan 2008, p. 415). The consequence was disastrous collapses in terms of trade of many developing countries especially those in Latin America which had already been integrated into the 19th century world economic system. Leaders of these developing countries became suspicious of classicals championing for free trade and increase the use of more direct controls in fostering import substituting industrialization (Szirmai 2005, p. 307). Moreover, this period was also characterised by rise and implementation of forced and autarkic industrialization pioneered by Soviet Union Stalin which got considerable resonance in many developing countries industrialization policies after the Second World War. Today, a significant number of countries in the world are industrialised and many developing countries have made great strides since the Second World War in their bid to industrialise. Many developing countries have industrialized hence becoming important producers of worldwide manufactured goods (Hodson & Sullivan 2008, p. 416). Nevertheless, the level of industrialization between developed and less developed countries and their integration into the world economy varies. Some are depending on raw materials suppliers or partially finished products to more industrialized countries while others have autonomy in production of finished goods and services. Examples of developing countries producing manufactured products are South Korea and China who exports numerous volumes of industrial goods to different parts of the world. Many governments of less developed countries started to embrace industrialization as they saw it as a positive evolution capable of generating rapid economic growth, conferring influence in global matters and can revitalize run-down areas (Leonard 2006, p. 814). In addition, most also recognise need for diversified industrial base for purposes of safeguarding their economies from fluctuations. In conclusion, many of the leaders of the less developed countries adopted manufacturing strategies during industrialisation as it lowers their vulnerable independence, speeds up economic growth, modernise the economy, create employment prospects and created foreign currency. The major reasons why these leaders adopted manufacturing sectors are to lower their dependence on imported goods from developed nations and for economic growth. References Abrol, D 2010, ‘Policies for Self-reliant Development Lessons from India’, History and Sociology of South Asia, vol. 4, no. pp. 41-73. Chibber, V 2011, Locked in place: State building and late industrialisation in India. Princeton University Press, Princeton, NJ. Di Maio, M 2009, Industrial Policies in Developing Countries. History and Prospectives. United Nations Conference on Trade and Development, Geneva. 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Transaction Publishers, New Brunswick, NJ. Szirmai, A 2005, Dynamics of socio-economic development: An introduction. Cambridge University Press, Cambridge, UK. Read More