Chapter 10: Dilemmas of Development

Action:

International Commodity Agreement
Kashmir would attempt to press mineral consuming states to set an acceptable, consistent price for the minerals. This route would not maximize prices and revenue, rather, it would establish consistent revenue that Kashmir can rely upon for development planning.

Outcome:

Your consumers have rejected your offer to set a stable price. They believe that if they set a stable price, they miss losing out on lower prices that your competitors could set in the future. The Prime Minister asks you to choose a more reliable market strategy. Which of these market strategies will you pursue?

What do you do now?



Import-Substituting IndustrializationISI is a national development strategy that avoids industrialized international economic linkages in order to focus on domestic production. This approach uses high tariffs, subsidies, and other protectionist measures to forego imported goods and services in favor of developing “national champion” firms. National champion firms are firms that the government believes could do the best job of producing the substitutable industrial goods.
Export-Led GrowthELG is a market-accepting strategy that argues international economic linkages are good because the international economy provides important opportunities for development such as access to managerial expertise, labor, capital, and technology. This strategy entails switching preference for government credit and foreign currency from firms producing for local markets to firms producing for export markets.