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You're assuming that manufacturing growth has to be primarily export-led, as China's was. But that wasn't how many of the other industrialization success storie

by ummonk 4y ago

You're assuming that manufacturing growth has to be primarily export-led, as China's was. But that wasn't how many of the other industrialization success stories kicked off their manufacturing industry - they did so by starting out primarily producing for domestic markets. There, there is high latent demand that can be bootstrapped via industrialization.

dirtyid 4y ago
>that wasn't how many of the other industrialization success stories Within context of modern developement, i.e. post ww2, where development is rapid industrialization in a few generations, success stories are essentially the Asian Tigers who hammered export led growth to accumulate foreign reserve (usd) then spend to accumulate increasingly expensive capital to make modern goods, throw in some industrial policy to protect native industries without pissing off trade partners (almost benefactors) who can turn off the FX / even tech transfer tap. Very few developing countries have the resources to bootstrap without bringing in foreign cash to buy foreign capital to bootstrap industrialization. Otherwise they start at essentially square one, for which the products are uncompetitive enough relative to imports from sufficiently industrialized economies that there is little latent demand, unless you go NK autarky route. It's the difference between saving up for decades vs taking out a loan and starting right away.
rramadass 4y ago
+1. Also every developing country needs its own base manufacturing industry in somethings to give it some degree of autonomy in deciding its own future.
- eru 4y ago
  Why? Australia did well on the back of exporting commodities. They seem to be able to decide their own future just fine. At least not worse than anyone else. (They had a bit of manufacturing, but it was mostly ill-fated. A substantial portion came from misguided attempts at industrial policy.)
  - rramadass 4y ago
    Australia is already a developed country and hence the importance of Industrialization/Manufacturing may not be as applicable to it as to other developing countries. It seems to be unique in its Mineral wealth which i suspect is what propelled it into the "Developed" category (https://en.wikipedia.org/wiki/Economy_of_Australia https://en.wikipedia.org/wiki/Economy_of_Australia). It is Industrialization/Manufacturing which gives any country a stake in the Global Economic framework and hence its "worth" in the World. Note that Manufacturing in the 21st century is quite different from what it was in the 19th/20th centuries. The Covid pandemic and the Ukraine-Russia war has exposed the weaknesses in the Global Supply Chain i.e. a single point of failure due to complete dependency on a single Nation (i.e. China) and this needs to be reworked into a true distributed system. Every Nation needs a certain degree of Self-Sufficiency/Self-Autonomy to hold its own in the "New World Order". Finally Manufacturing is the driver for everything else like a)Innovation b)Productivity c)Standard of Living etc. which are at the very heart of development. See Also: 1) Manufacturing (still) Matters (pdf) - https://australiainstitute.org.au/wp-content/uploads/2020/12/Manufacturing-Briefing-Paper-FINAL.pdf https://australiainstitute.org.au/wp-content/uploads/2020/12... 2) https://asiasociety.org/australia/looking-ahead-manufacturing-australias-future-not-its-past https://asiasociety.org/australia/looking-ahead-manufacturin... 3) https://amtil.com.au/weldaustralia-manufacturing-amtil/ https://amtil.com.au/weldaustralia-manufacturing-amtil/

by ummonk 4y ago

dirtyid 4y ago

>that wasn't how many of the other industrialization success stories Within context of modern developement, i.e. post ww2, where development is rapid industrialization in a few generations, success stories are essentially the Asian Tigers who hammered export led growth to accumulate foreign reserve (usd) then spend to accumulate increasingly expensive capital to make modern goods, throw in some industrial policy to protect native industries without pissing off trade partners (almost benefactors) who can turn off the FX / even tech transfer tap. Very few developing countries have the resources to bootstrap without bringing in foreign cash to buy foreign capital to bootstrap industrialization. Otherwise they start at essentially square one, for which the products are uncompetitive enough relative to imports from sufficiently industrialized economies that there is little latent demand, unless you go NK autarky route. It's the difference between saving up for decades vs taking out a loan and starting right away.

rramadass 4y ago

+1. Also every developing country needs its own base manufacturing industry in somethings to give it some degree of autonomy in deciding its own future.

eru 4y ago
Why? Australia did well on the back of exporting commodities. They seem to be able to decide their own future just fine. At least not worse than anyone else. (They had a bit of manufacturing, but it was mostly ill-fated. A substantial portion came from misguided attempts at industrial policy.)
- rramadass 4y ago
  Australia is already a developed country and hence the importance of Industrialization/Manufacturing may not be as applicable to it as to other developing countries. It seems to be unique in its Mineral wealth which i suspect is what propelled it into the "Developed" category (https://en.wikipedia.org/wiki/Economy_of_Australia https://en.wikipedia.org/wiki/Economy_of_Australia). It is Industrialization/Manufacturing which gives any country a stake in the Global Economic framework and hence its "worth" in the World. Note that Manufacturing in the 21st century is quite different from what it was in the 19th/20th centuries. The Covid pandemic and the Ukraine-Russia war has exposed the weaknesses in the Global Supply Chain i.e. a single point of failure due to complete dependency on a single Nation (i.e. China) and this needs to be reworked into a true distributed system. Every Nation needs a certain degree of Self-Sufficiency/Self-Autonomy to hold its own in the "New World Order". Finally Manufacturing is the driver for everything else like a)Innovation b)Productivity c)Standard of Living etc. which are at the very heart of development. See Also: 1) Manufacturing (still) Matters (pdf) - https://australiainstitute.org.au/wp-content/uploads/2020/12/Manufacturing-Briefing-Paper-FINAL.pdf https://australiainstitute.org.au/wp-content/uploads/2020/12... 2) https://asiasociety.org/australia/looking-ahead-manufacturing-australias-future-not-its-past https://asiasociety.org/australia/looking-ahead-manufacturin... 3) https://amtil.com.au/weldaustralia-manufacturing-amtil/ https://amtil.com.au/weldaustralia-manufacturing-amtil/