“Export-led growth strategies?” And the risks of such strategies?
– lack of product diveristy in economies that rely only products in which they have comparative advantage;
– African countires have a comparative advantage mainly in primary commodities, which have a long term trend of declining prices;
– leading to deteriorating terms of trade, so that benefits go to richer and more specialized enconomies and countries.
– Instability and Volatility of international market;
– Vulnerability to adverse exogenous shocks and currency risks
– “dual economy”; areas characterised by enclaves of economic growth surrounded by underdeveloped areas.
Of course, exporting is crucial to increase exchanges among countries and regions, to transfer skills and technology and to allocate resources within a country..but..
Considering only ‘one-direction’ strategy is reductive. We need an holistic, comprehensive approace, including internal demand-led growth strategy!!