Import Substitution Process And Export Promotion Strategy

India’s economy is booming! With large decreases in poverty, increases in literacy and GDP, India is continuing to make its way out of the third world and into the first. India is predicted to surpass even China in growth by 2050. A competitive private capital market has instilled Indians with a low cost high quality mentality and has resulted in some of the highest return rates for any country. India has been averaging 6% growth compared to China’s 9.5% with half the investments. India capital efficiency is one of its strongest economic benefits.

Together China and India attributed to prosperity and there are mutual economic benefits. Both countries have formed stronger economic bonds. They have openly cooperated with one another in multi-lateral trade negotiations. As emerging economies continue to grow, there may be a further decline in the share of world output and world exports accounted for by the

The population of the Asia region of the world contributes a massive amount of exporting goods, and global business as a whole. The sheer number of people consuming goods that must be imported to support the large population force the need for trade with other regions. The demand for resources is high and the need to develop strong trade relations with other countries is vital to the continued growth and success of Asian countries.

In the midst of the help from the extremely advanced transportation, modern production methods, rapid industrialization and the increasing facilities of outsourcing of trade and services the international trade organization is increasing and decreasing very fast in the globe. The international trade account has a good distribute of a country’s gross on domestic product. It is in addition one of most important foundations of income designed for the developed as well as to developing country. For the reason that of many country benefits from the international trade approximately every one in the

“South to South” trade, meaning trade between developing countries, accounts for 40 percent of all goods flow. The expansion of trade into these new regions is by reason of technological advances and economic growth and increasing numbers of consumers.

Over the years the global economy has seen a rise in so called ‘emerging markets’. These are developing economies which have exceeded economic performance in respect to their developing counterparts. These economies are newly industrialized and are on their way to becoming developed economies but have not yet reached that status. The more common and likely heard developing economies consists of BRIC (Brazil, Russia, India, and China) followed by Mexico, South Korea, Turkey, Saudi Arabia, and Indonesia. Developed nations (MEDC) include the westernised countries such as the U.S, the U.K and Japan. In 1999, Dr. Kvint published this definition: "Emerging market country is a society transitioning from a dictatorship to a free-market-oriented-economy, with increasing economic freedom, gradual integration with the Global Marketplace and with other members of the GEM (Global Emerging Market), an expanding middle class, improving standards of living, social stability and tolerance, as well as an increase in cooperation with multilateral institutions" This essay will locate the common characteristics that emerging markets share.

The international trade relationship among countries is complex which combined both challenges and opportunities. International trade agreements between countries might bring some opportunities to some developing countries in some

In this study, countries with GDPs per capita ranging from $75 billion and higher are considered advantaged. As these countries were included in the top 100 ranking of economies worldwide and have rapid economy growth. Countries with GDPs per

The countries of Brazil, Russia, India, and China, dubbed “BRIC” by Goldman Sachs’s Jim O’Neil, have been grouped together because they are in the same stage of economic development but can’t quite be considered developed countries. Recently, these countries have experienced explosive growth in Gross Domestic Product (GDP) and overall global trading power. Since 2008, when most of the world’s developed nations were in periods of slow growth, no growth, or even contraction, these developing countries were experiencing high growth, sometimes in the double digits percentages. These countries have done this by seeking out opportunities for cooperation in trade, investments, infrastructure development and other areas.

Given the rapid economic growth of China and its large population, along with globalization, China became the second largest economy in the world and the second largest trading partner of Canada. With its increasing importance and essential role in global economy, it is critical to understand that the trade relationship between Canada and China and the factors that affect the trade volume. With this basic

BRICS (Brazil, Russia, India, China and South Africa) and CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) are all examples of some of the emerging markets in the world. BRICS are the world’s largest emerging markets and CIVETS are the second largest emerging markets in the world. Emerging markets are also known as; emerging economies or developing countries. An emerging market is a term used to describe a country that is still developing. It is not yet developed but it is neither underdeveloped, it is in between. These countries have some characteristics that would classify them as developed, but they also have characteristics that would classify them as underdeveloped (not to be confused with ‘undeveloped’).

Import Substitution Industrialization (ISI) as an economic development strategy was pioneered and grew out of the belief, “markets alone could not be relied upon to provide the physical capital and set up industries necessary for development,” (Demir, 2017). According to Demir (2017), “the pioneers of development economics viewed underdevelopment as a lack of capital which determined a very low labor productivity. Thus in its early phase (the 1950s and early 1960s), ideas surrounding development focused on capital accumulation and industrialization as the major vehicles to promote development.” It was believed by policymakers that richer countries used the accumulation of capital and industrialization as the primary catalyst to spur development; these policymakers also believed capital accumulation and industrialization would be the best method for developing economies to achieve development themselves. Thus ISI was born.

For the last two decades, both India and China have grown at twice the global rate and If this trend continues for next few decades, with their vast labor supply, favorable demographics, and aspirations for reaching the developed world per

Goods and services produced in a country and being sold outside is globally known as export (Mankiw, 2004:240). Suppose that a country do an International Trade and become an exporter of some goods, domestic producers will get more benefits, while local consumers will get loss because the local price is higher. However, government policy about the opening of international trade itself will be profitable for both concerned countries (Mankiw, 2006:221).For Indonesia, the activities of the export has been encouraged since 1983. In the same year, export was getting more attention in order to spur Indonesia economy growth. Indonesia slowly changes its strategy of industrialization, from the emphasis on import substitution industries to export promotion industries. Along with this new policy, the economy of Indonesia is getting better. It was proven in 2008 that the cumulative value of export reached USD 118,430million, in other words it increased by 26.92 percent, while for non oil and natural gas sector reached USD 92,260million or increased by 21.63 percent. The other sector, for instance agricultural, industry, and mining had also increased, each by 34.65 percent, 21.04 percent, and 21.57 percent compared to the previous year.

India and South Africa are members of the five major emerging economies. They are both developing countries however, they are well distinguished for their large democracy, fast-growing economies and significant influence on regional and global affairs. This report aims to comparatively analyse whether India or South Africa is in a better position to succeed in the global economy. For the purposes of this report, I will be comparing and analysing each country’s political and economic environment and also looking at the environment for foreign direct investment in order to determine whether India or South Africa is in a better position to succeed.