The Role of International Trade in the Economic Development of Developing Countries

The Role of International Trade in the Economic Development of Developing Countries

The Living Legend

Ahmad Javed Kamran Amiri

Dated: Thursday 21^st November 2019

Although today's business cannot be regarded as an engine of economic growth and development, it can still contribute greatly to growth in developing countries in a variety of ways (in addition to the benefits of comparative advantage).

Haberler is one of those who points to the important impacts of international trade on economic growth and development: Trade can and does make full use of domestic idle resources. In other words, through trade, a developing country can reach a point on the production facility curve from an inefficient production point within the production facility curve despite lack of full utilization of resources due to insufficient domestic demand.

For such a country, trade is either a surplus drainage or a sales market for agricultural surplus and raw material surplus. This has happened in many developing countries, especially in West Africa and Southeast Asia.

In addition, as the market size grows, trade provides the opportunity and scope for division of labor and economies scale. This is of great importance and has been seen in the production of light industries in small economic units in the early stages of development.

International trade is a means of transferring new ideas, new technology, new methods and practices, and other skills. One of the major benefits of trade is that it encourages and facilitates the international flow of capital from developed foreign countries to developing countries. In the case of foreign direct investment, the foreign firm maintains its managerial oversight over the investment and also employs an external specialist to operate (however, there are many disputes over the costs and benefits of investing).

External exists in the host and developing country, In some emerging and developing countries, such as Brazil and India, imports of new industrial goods have increased demand, followed by domestic production of these products with acceptable performance, Finally, international trade is considered an effective weapon against monopoly because, despite competition.

Criticisms of international trade can be compared by comparing the list of trade-related benefits and the list of harmful effects of trade. However, since a developing country can refuse to trade or change the type of trade in the event of loss or loss of interest, it is assumed that developing countries must trade in way to earn benefits.

When the bulk of the profits from the trade are to the developed countries and the demand to rectify this situation is fully justified, then one should not infer that trade is in principle harmful.

Of course, anyone may also see situations in which international trade has been detrimental to economic development.

In most cases, of course, we expect trade to play a significant and effective part in the development process.

Although China has been advocating for self-sufficiency for security and ideological reasons, in recent years, especially since the 1990s, the interest in trade and the important role that trade has played in growth and development have been of great interest. It has gained a great deal of international trade, just as most of the European countries after the collapse of Communism gained trade benefits.

Resource:

1. World Bank, World Development Report (Washington, D.C: World Bank, Yearly).
2. World Economic Outlook, April 2005.
3. And much more.