Globalization and the Implications for Trade-Readiness of Small Developing countries: a Case Study of Trinidad & Tobago (original) (raw)
Related papers
This paper uses the model of the new growth theory to evaluate whether or not Trinidad and Tobago can develop a sustainable path of development in the non lead to increased trade with the rest of the world. It is proposed that Trinidad and Tobago's manufacturing sectors may be able to flourish in the global economy if it is able to make use of the technology presently available globally, as well as create and sustain some degree of knowledge creation. A review of the literature shows that developing countries like Trinidad and Tobago can exist and participate in the global economic arena, if they adopt the philosophies and practices that have been advanced by the new growth theories, specifically the endogenous growth theory. This paper postulates that economic growth can be attained if there is sufficient levels of research and development (R&D) applied to the productive process, and this needs to be expressed not only at the level of the firm, but throughout the economy as a whole.
Defining the concept of development is not an easy task and it would certainly go far beyond the scope of this text. Nevertheless, it is necessary to recall that originally, the concept of development had a political goal. President Truman presented this concept more than fifty years ago, in 1949. The basic idea was that «developing» Society or an economy was a historical task. Firstly, development from this point of view was mainly a strategy of the Occident to contain communism. Secondly, the process which took a century in the rich countries to occur could happen in the same way in a few decades in other less economically developed countries. The eventuality of «catching up» is closely related to this notion. Third, development is considered to be an endless process that could last forever no matter what happens. Last but not least, development is closely linked with the role of the state and its historical goal to succeed in developing the nation. Despite the historical and political reasons stated above, our paper focuses on the neo- classical approach to the development issue. According to this analysis, growth has been considered to be the ultimate goal of these so-called Under-Developed countries in order that they develop. The lucid analysis of J. Stiglitz is worth quoting: « During the past four decades, development has been considered (at least for the dominant approach) as a mere matter of economics: The point was to look for the increase in Stock exchange capitalisation (through foreign transfers or the increase in domestic Savings rate) and through a better allocation of resources2. These changes were supposed to lead to a rise in income and, (automatically) to a sustainable increase in the growth rate.» [Stiglitz, 2000a, p.9] The analysis of growth will therefore represent the core element of the neo-classical international trade theory3 and its role is determinant for under-developed countries to «develop» and catch up with the level of developed countries . We will focus on two different approaches to growth (both neo-classical). First, the exogenous growth model developed by Solow [1956 and 1957] which is one of the first to underline the importance of technological progress. Second, the endogenous growth models of Romer [1990] and Grossman and Helpman [1990 and 1991]. The aim is to expose these models and analyse their hypothesis and which are related to our main concern i.e. development of the under-developed countries. The study of these two model families will lead to the debate on convergence or divergence in growth rate per capita between developed and under-developed countries. The endogenous growth theory is, in this respect, worth studying as it implies policy programs concerning the technological progress to avoid divergence and to enable developing countries to increase their growth rate. The conclusion of this part will point out that, in the endogenous growth theory, the process of the incorporation of technological progress which is essential to increase the growth rate, has to rely on the innovation and the R&D progress of the developed countries in order to grow faster (and due to the central hypothesis of increasing returns, imperfect competition and the agglomeration process). Thus, we highlight the dependency of under-developed countries on the developed in terms of innovation and technological progress that is the core element of growth (i.e. development in the neo-classical endogenous growth theory).
Trinidad, West Indies The Possibility of Developing a Sustainable Developing Economy in Trinidad and
This paper seeks to determine the role that Endogenous development in different sectors will play in moving the Trinidad and Tobago economy into the future, while allowing us to interact meaningfully within the new world economy. We will focus on Endogenous Growth Theory, and evaluate how it can assist in developing a framework for the much needed policies in critical developmental areas for sustainable development to be a reality.
Productive Development Policies in Trinidad and Tobago: A Critical Review
2010
Even as Trinidad and Tobago seeks productive diversification away from the energy sector, the process underlying the country's productive development policies (PDP) is in a state of transition from state-directed industrial policy to a newer approach with extensive private-public participation. This study explores the main characteristics of four PDPs in Trinidad and Tobago and reviews them following the related literature (e.g., . The four PDPs are: a) The process towards the Promotion of Clusters; b) the PDPs for the Tourism industry; c) the classical PDPs for Micro, Small and Medium Enterprises and; d) the Free Trade Zone as a policy designed to compensate for the failure of the State.
2011 Mauritius Glbz and diversification
This paper intends to use the model of the new growth theory to evaluate whether or not Trinidad and Tobago can develop a sustainable path of development in the non-oil sectors that would lead to increased trade with the rest of the world.
Harnessing trade opportunities for growth and development
Capital Finance International, 2012
Developing countries have benefited enormously from the dramatic changes in the global trade and investment environment brought about by the development of global value chains. For small economies in particular, value chain oriented investment has brought with it export industries on a wholesale basis. To take advantage of the dynamic potential of FDI and lower the vulnerability to the footloose nature of value chain investments, export activities need to go beyond being an enclave. Leveraging the potential of value chain oriented export strategies requires building competitive domestic firms and establishing effective linkages between foreign investors and the domestic economy. These are essentially two sides of the same coin. Building up domestic supply side capacity is a long term and difficult challenge, but if done effectively within the context of global supply chains, it will leverage foreign direct investment as a platform for the development of a sustainable national export sector, on the backs of competitive, globally integrated, local firms.
Nebojša Janićijević (editor) "The Role of Contemporary Management and Marketing Methods in Improvement of Competitiveness of the Companies in Serbia within the Process of its Integration to the European Union" CID Faculty of Economics, Belgrade, 2012, pp.407-427., 2012
Predrag Bjelić and Ivana Popović Petrović "Developing Countries` Position in International Trade and the Increase of their Competitiveness at the Beginning of the New Century" in: Nebojša Janićijević (editor) "The Role of Contemporary Management and Marketing Methods in Improvement of Competitiveness of the Companies in Serbia within the Process of its Integration to the European Union" CID Faculty of Economics, Belgrade, 2012, pp.407-427. (ISBN 978-86-403-1259-2, COBISS.SR-ID 195212044) Abstract "This paper presents a changed role and the overall importance of Developing Countries in international trade at the beginning of the new century. As they are a broad category, this paper shows the specific importance some of their groups, including their characteristics and many obstacles they are faced with, participating in international trade. This paper mostly has the aim to point out that DCs should develop more intradeveloping countries’ trade as a solution for their economic growth and development, especially after the great economic crisis of 2008, whose main consequence in the last few years is the decreasing role of donors from Developed Countries. This donor role of Developed Countries and Multilateral Institutions is important for continuing the Programme Aid for Trade, a process of trade capacity building, especially in Least Developed Countries. Keywords: Developing Countries, South-South Trade, Obstacles to International Trade, Aid for Trade;"
Growth, structural change and technological capabilities Latin America in a comparative perspective
2010
T Te ex xt to os s p pa ar ra a D Di is sc cu us ss sã ão o 212 TEXTO PARA DISCUSSÃO 212 • OUTUBRO DE 2009 • 1 Os artigos dos Textos para Discussão da Escola de Economia de São Paulo da Fundação Getulio Vargas são de inteira responsabilidade dos autores e não refletem necessariamente a opinião da FGV-EESP. É permitida a reprodução total ou parcial dos artigos, desde que creditada a fonte. Abstract Countries differ in terms of technological capabilities and complexity of production structures. According to that, countries may follow different development strategies: one based on extracting rents from abundant endowments, such as labor or natural resources, and the other focused on creating rents through intangibles, basically innovation and knowledge accumulation. The present article studies international convergence and divergence, linking structural change with trade and growth through a North South Ricardian model. The analysis focuses on the asymmetries between Latin America and mature and catching up economies.