A Critical Review on Export-Oriented Industrialization as an Indispensable for Economic Growth in Developing Countries

This paper identifies the key issues relating to export-oriented industrialization and determines whether it is indispensable for economic growth in developing countries based on critical reviews of the existing literatures. This paper argues that export-oriented industrialization is not necessarily indispensable for economic growth in developing countries as openness is one of the strategies for accelerating economic growth. It also suggests the other factors like the nature of goods that the developing countries exports, relative volume of exports and imports, terms of trade, exchange rate regime, etc. that need to be addressed very well as they are closely associated with economic growth. Export-oriented industrialization process would definitely lead to sustained economic growth for developing countries only when both import and export led-industry will get emphasis with rational state intervention and increasing bargaining power in setting the global trade policies within the global agencies. They also need to invest in infrastructure, human capital, and research and development; need to regulate the financial market to reduce inflation and save to invest in critical sectors that will promote economic growth and development, trade and industry, and effective government role in developing comprehensive, well-defined and attainable economic policies and transparency. Developing agro-based industries, capacity building, regional cooperation and common market, developing countries can be freed from the hegemony of rich countries and they should formulate their own policies that best suits them to bring the economic development.