Is Export-led Growth Passe? Implications for Developing Asia
This paper discusses whether the Asian countries can still rely on the export-led growth strategy, or whether, they start shifting to domestic demand-led growth.
Some authors have recently begun questioning the advantages of the export-led growth (ELG) strategy that some Asian countries followed and that yielded impressive results. They argue that ELG suffers from a fallacy of composition, in that not all developing countries can pursue it simultaneously, and recommend a shift to domestic demand-led growth (DDLG).
This paper argues that although the encouragement of a gradual shift to DDLG is a welcome effort, ELG and DDLG need not be presented as incompatible strategies. The countries in the region need some form of ELG to achieve economies of scale. Hence, the ELG strategy is still the best option for most developing Asian countries. ELG is not simply about exporting, but exporting in the context of a development strategy based on upgrading. In the end, it is about achieving a golden combination between ELG and DDLG.
Finally, the discussion of the policies to resume growth after the financial crisis has to be framed in the more general context of what is constraining growth today. In this author's view, demand is what constrains growth.
- Export and Domestic Demand-led Growth and the Need for a New Development Paradigm
- The Preference for Export-led Growth
- A Demand-driven View of Export-led Growth
- Export-led Growth is not Passé