The export of goods and services by a country that provide a channel towards obtaining a comparative advantage in global trading characterised the Asian economies as a way of repositioning themselves towards being developed countries. In this regard, there has been an increase in export activities among the Asian nations with some of them emerging as leading world exporter. More importantly is the fact that export-oriented industrialization has elevated the position of most of the Asian nations from less developed countries towards becoming developed countries.
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In this respect, there are different objectives of export-oriented industrialization that have been identified so far. To begin with, export-oriented industrialization is associated with high returns that promote a high rate of growth in the economy. Notably, export-oriented industrialization focuses on attaining a comparative advantage of goods and services on the global market as opposed to a smaller local market. As a result, most of the goods that are exports that are exported are able to find ready market and attract high demand leading to further development of the local industries to meet these demands. The high demand of export goods and further development of local industries to meet these demands contribute to the overall high growth rate of economies. In reference to Kohli (2004, p.116), there is a mutual relationship between growth and exports is mutual.
Another objective of export-oriented industrialization is embedded in the fact that this approach towards economic development promotes is an appropriate strategy towards industrialization and to the overall development of industries in a particular economy. In other words, countries that have a quest of developing their industries rapidly have to focus on exports as a way of enhancing them. Kohli (2004, p.116) argues that export promotion is an appropriate strategy for rapid industrialization and growth. Therefore, the rapid development of industries in a particular country depends heavily on its export capabilities since this is the only channel that provides the widest market of goods that are produced in such a nation.
Similarly, the need to strengthen the local currency against the foreign currency has also been the driving force behind enhancing the export trade among countries in different parts of the world, and in this regard Asia. Chowdhury & Islam (1993) argues that exports generate foreign exchange and facilitate imports of raw materials and capital goods that are of particular importance to industrialization. Note that exporting goods to particular countries provides a channel of earning foreign exchange which can be used to acquire the needed capital goods and other important initialization aspects. For instance, the Asia countries have been able to acquire important technological know-how that has been used to develop and sustain their economies by exporting goods to Western countries. Furthermore, following an export-oriented path is often utilized to enable the involved countries to keep up to date with the emergent technologies that could further alleviate the industrialization process.
There have also been arguments that export-oriented industrialization is preferred among the developing nation since it promotes the saving culture of its people. In other words, exports-oriented industrialisation is promoted as a way of encouraging savings. According to Chowdhury & Islam (1993, p.84), as income rises with the expansion of exports, average savings rise since the marginal propensity to save out of export income is high. Moreover, export orientation is associated with a less distorted capital market and a positive real interest rate acts as an incentive for savings (p.84). Therefore, the savings that are obtained in this way can be used to enhance the investment strategies of the country involved, thus enabling it to move towards industrialization at a high rate.
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