How emerging economies could prosper in a protectionist world
Mint Kolkata|January 09, 2025
As manufacturing export success gets harder, they should focus on service exports. These are unlikely to face big trade barriers
RAGHURAM G. RAJAN

A professor of finance at the University of Chicago Booth School of Business, former governor of RBI and co-author of ‘Breaking the Mold: India’s Untraveled Path to Prosperity

As apprehensions grow in China, Europe and Japan about a possible trade war triggered by the incoming Trump administration, one should also spare a thought for developing countries. Their tried-and-tested method of expanding beyond agriculture to achieve middle-income status has been to embrace low-skilled export-oriented manufacturing. How will these countries fare now?

Their prospects may be better than expected, especially if they choose alternative development paths. In the past, poor countries developed through manufacturing exports because foreign demand allowed their producers to achieve scale, and because low-skilled workers could be attracted to factories and even low labour costs made these countries’ output globally competitive, despite their firms’ lower relative productivity.

As wages rose, workers could afford better schooling and health care for themselves and their children. Firms also paid more taxes, letting the government invest in improved infrastructure and services. Firms could now make more sophisticated, higher-value-added products, and a virtuous cycle ensued. This explains how China moved from assembling components to making world-leading electric vehicles (EVs) in just four decades.

هذه القصة مأخوذة من طبعة January 09, 2025 من Mint Kolkata.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

هذه القصة مأخوذة من طبعة January 09, 2025 من Mint Kolkata.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

المزيد من القصص من MINT KOLKATA مشاهدة الكل
Mint Kolkata

Inside the Seismic Shift in the Namkeen World

Health is wealth, so many brands are coming up with all kinds of products to reshape the way Indians snack

time-read
8 mins  |
January 24, 2025
Mint Kolkata

American employees have lost their labour market leverage

Their pandemic gains are over as the power balance tilts away

time-read
3 mins  |
January 24, 2025
Mint Kolkata

Donald Trump to take virtual centre stage in Davos

Chief executives will be given the chance to lob questions at the new US President Donald Trump

time-read
1 min  |
January 24, 2025
Mint Kolkata

Little-known ETF gains from SpaceX addition

The fund has since seen the best stretch of flows in its seven-year lifespan

time-read
2 mins  |
January 24, 2025
Mint Kolkata

Adani Infra seeks CCI clearance

Adani Infra has sought approval from fair trade regulator Competition Commission of India (CCI) for acquiring a majority stake in PSP Projects Ltd.

time-read
1 min  |
January 24, 2025
Mint Kolkata

Declaring pre-existing diseases and timelines: Know the rules

What is the time limit for pre-existing diseases when buying health insurance?

time-read
2 mins  |
January 24, 2025
Mint Kolkata

Uneven access to formal credit can set our economic goals back

India must chart a path for small-ticket formal credit if it is to realize its Viksit Bharat ambition

time-read
3 mins  |
January 24, 2025
Mint Kolkata

Maruti Suzuki to up prices of models

Maruti Suzuki India Ltd (MSIL) on Thursday said it will hike prices by up to ₹32,500 across various models to partially offset the rise in input costs.

time-read
1 min  |
January 24, 2025
Mint Kolkata

HUL's Minimalist asset big push for beauty portfolio

India's largest consumer goods maker just acquired one of the few profitable personal care startups in the country, signaling more consolidation as entrenched giants beef up premium offerings.

time-read
3 mins  |
January 24, 2025
Mint Kolkata

HUL needs a magic wand for recovery after subdued Q3

Not fast-moving

time-read
1 min  |
January 24, 2025