Developing countries' terms of trade in manufactures, 1967–87: A note

Terms of trade, relating only to manufactured exports and imports, are calculated for a sample of 37 industrialised and developing countries over the 1967 to 1987 period. It is found that the terms of trade movements were significantly more favourable for higher‐income countries. This result highlights the importance of export diversification as part of a development strategy.     

Religious change in a minority context: transforming Islam in Sri Lanka

Scholarly work exists on how Muslim minority positioning affects identity and politics, but what is less known is its impact on religion. Sri Lanka’s 9% Muslim population, the country’s second largest minority, has undergone a series of recent changes to religious identity, thinking and practice, which have been shaped by its relationship to the dominant and warring ‘ethnic others’. As Sri Lanka plunged deeper into armed conflict in the 1990s, Muslims experienced significant shifts in religious thinking and practice, identifying strictly with a more ‘authentic’ Islam. After the war ended in 2009, Muslims became the target of majoritarian Sinhala-Buddhist violence, resulting in a reinterpretation of Islam and a counter process of change. Using the Sri Lankan Muslim case study to engage with scholarly critiques of majority–minority binaries, this article analyses how religious change is brought about through the interjection of minority status with ethno-nationalisms and conflict. Its focus on Islam in Sri Lanka contributes to area studies and to Islamic studies, the latter through a rare analysis of Islamic reform in a Muslim minority context.     

Tariffs and economic development: Some theoretical issues 1

There is evidence to suggest that in Brazil import substituting industrialization has brought an increased dependence on the foreign sector. Further growth is highly dependent upon the ability to increase exports, and economic policy exercises an important function in such export expansion. In an attempt to analyse the behaviour of manufactured exports, a regression model, complemented with in‐depth interviews with individual firms, is posited and tested with Brazilian data. In analysing policy variables and other determining factors in terms of their effects on manufactured export performance, it is found that exchange rate policy, tax incentives, LAFTA, and a recession‐boom effect have all played important roles in shaping Brazilian industrial export growth.     

Offshore assembly and NIC-manufactured exports to the United States: Changing correlates of success

Comparative studies of the NICs usually show that their success at exporting manufactures to the North is unrelated to the role of intrafirm trade and subcontracting in their exports, since in some very successful NICs intrafirm trade has played a small and diminishing role. This study explores hyptheses suggesting why intrafirm trade and subcontracting may become more important factors in NIC exports because of the changing composition of their exports, changing technology, and developed country protectionism. Data on the share of eight developing countries' manufactured exports to the United States under offshore assembly provision (OAP) item 807.00 are tested for their changing importance to export growth over the period 1970 to 1984. For all NICs, the share of their exports to the United States under OAP became more positively related to export performance in the 1980s than it had been in the 1970s. For Asian NICs, non-OAP exports continued to outperform OAP exports.     

Beyond import substitution and export promotion: A new typology of trade strategies

There is considerable confusion in the literature as to what exactly is meant by ‘export promotion’, or ‘outward‐orientation’. This article identifies five mutually‐exclusive trade strategies, and defines the underlying sectoral and market orientations of each. It then measures empirically the strategies of six developing countries. The empirical findings indicate that some of the successful East Asian countries actually pursued an infant industry‐based, exporter‐oriented, ‘protected export promotion’ strategy, not the commonly perceived, static comparative advantage‐based ‘export promotion’ strategy; their protectionist policies are not mere exceptions, but integral elements of their export‐oriented strategy.     

Foreign capital inflows and output growth rate: A reformulation

A strategy of export promotion has evolved into the new conventional wisdom. The alleged superiority of this strategy draws on an extensive list of empirical studies, an important strand of which consists of tests in cross‐country format that use bivariate correlations and/or production function‐type regressions to demonstrate a strong positive relationship between exports and GDP growth. By showing that these same tests support the ‘promotion’ of all major components of GDP, this note argues that these tests have no bearing at all on the export‐promotion/import‐substitution controversy.     

Terms of trade and class conflict in a computable general equilibrium model for Mexico

A computable general equilibrium model for Mexico is constructed in which class conflict over the distribution of the surplus is the principal determinant of the terms of trade. The model consists of seven social classes and eight productive sectors. Classes are distinguished as ‘fundamental’ or ‘subsumed’ according to whether their incomes are primarily determined by conscious class struggle or by the resulting system of relative prices. Flexible prices are assumed to clear markets for which non‐produced means of production, such as agricultural land, limit supply while output in the remaining sectors is determined by the level of effective demand. For the latter sectors, two theories of price formation are compared and are seen to differ radically in their implicit conception of the nature of class conflict. A ‘Keynes‐Kalecki’ closure is considered in which prices are determined by a fixed mark‐up on costs. This enables capitalists to protect themselves from incursions on the rate of profit due to labour militancy or state‐imposed terms‐of‐trade policy designed to favour peasants andlor the agrarian bourgeoisie. A second, ‘Marx‐Sraffian’ price closure constrains the economy to a wage‐profit‐terms‐of‐trade surface; where the economy conjuncturally resides on this surface depends upon the level of effective demand, wages and terms‐of‐trade policy. Various policy scenarios are investigated under both closures.     

Can a developing democracy benefit from labour repression? Evidence from Sri Lanka

While a growing body of academic literature casts doubt on the wisdom of authoritarian responses to labour in developing democracies, few empirical studies demonstrate the adverse effects of excluding organised labour from the policy arena or repressing trade unions in the industrial relations arena. This paper draws on the recent history of state–labour relations in Sri Lanka to help fill this gap. Beginning in the late 1970s, the Sri Lankan government adopted a labour-repressive export-oriented strategy of development. The author shows how the repression of private sector unions during this period destroyed the legitimacy of traditional left unions and the structure of institutionalised bargaining that was in place prior to Sri Lanka's authoritarian period. This erosion of the system of institutionalised bargaining eventually led workers to shift their support to more radical, ‘new left’ unions and culminated in a wave of extreme and violent forms of protest that chased away much needed foreign direct investment. The chaotic consequences of the labour repression suggest two primary conclusions: (a) that prior democratic mobilisation may make labour repression untenable over the long term; and (b) that repression may backfire, creating bursts of highly visible and destabilising protest that undermine the developmental objectives of neoliberal reforms.     

Some Scenarios for Russian Oil Exports up to 2020

This article analyses the potential for Russian oil export growth through the next decade. It concludes that supply for exports will continue to grow, albeit moderately. The greater or lesser intensity of that growth will depend on the evolution of both production and internal consumption, and especially on the reaction by investors to sector changes promoted by government energy policy. From this analysis, we find three likely scenarios for Russian oil exports. The most positive envisages it will be possible to diversify exports while the most negative suggests that Russia will have scant opportunity to develop an export diversification strategy.     

International tourism and export instability

Export diversification has been suggested as a strategy for decreasing the level of export earnings instability which is experienced by many developing countries. In recent years the international tourism sector has made an increasingly important contribution to the economies of many low income countries. This article examines whether diversification into the non‐traditional tourism sector has succeeded in decreasing the instability of export earnings. It was found that although tourism has the advantage of high growth rates and is a major source of foreign currency receipts, earnings from international tourism did not bring about a significant decrease in the instability of export earnings of most of the developing and industrialised countries considered. Furthermore, a net increase in the instability of earnings from tourism and merchandise exports occurred in a number of countries, and may be a particular problem in small, open developing economies.     

The European community's system of generalized tariff preferences: A critique

In mid‐1971 the European Community introduced a system of generalized tariff preferences for less developed countries, hailing its scheme as a ‘generous response’ to the needs of those countries. This paper explores tentatively how generous the European tariff preference scheme is, in terms of its likely stimulus to exports from and investment in the less developed countries. It also assesses the impact of the scheme on the assumption of United Kingdom membership in the Community. It concludes that whether Britain is in or out, the European scheme, based as it is on rather restrictive tariff quotas keyed to past trade data, will offer little help in furthering the economic objectives of developing countries.     

Effective exchange rates for exports in Pakistan

Effective exchange rates for exports in Pakistan can be calculated which take into account the major export incentive measures in operation and their divergent treatment of specific exports. This quantification of export policies into an overall measure of the implicit (effective) foreign exchange rate structure permits an evaluation of the impact of export promotion measures on foreign exchange earning capacity. The major export incentive schemes were found to provide the highes’ subsidies to those exports with the highest total import components and the lowest relative earnings of net foreign exchange. Thus de velopment policy in some cases failed adequately to encourage these producers with relatively higher levels of domestic value‐added to export their products.     

Commodity concentration and export fluctuations: A probability analysis

This paper examines the argument that diversification of exports can help reduce export fluctuations. Our main point is that the problem of export fluctuations is not uni‐dimensional but has to be defined with reference to some characteristics of the country, e.g. ability to forecast fluctuations, or availability of reserves to meet their effects. Focusing on two aspects of fluctuations—one concerned with the average amplitude and the other with the sporadicity—we show that diversification may help to mitigate the former aspect but may enhance the latter. This suggests that in order to evaluate the effects of diversification we need more information on how countries define their problem of fluctuations.     

An investigation of the export expansion hypothesis

The present study examines the appropriate development strategies for industrially advanced and developed nations utilising the earlier research of Alfred Maizels. As before, the basic model used is the ‘ex‐ante’ model developed by Hollis Chenery and Alan Strout. The results support the ‘Export Expansion’ hypothesis which emphasises the importance of exports as a source of savings and as a catalyst for economic development for both highly developed and less developed countries. Gross Domestic Product, Non‐export Gross Domestic Product, and exports are used to explain savings in 11 less developed countries and six developed countries.     

Political Instability and Export Performance in Sub-Saharan Africa

The political landscape of post-independent sub-Saharan Africa (SSA) has been one of rampant coups d'etat. Existing evidence suggests such elite political instability (PI) has been growth-inhibiting even when exports are accounted for. In the light of the increasing interest in the role of export-promotion strategies in fostering economic growth, however, the present paper examines the impact of PI on export performance in these economies. The paper explores the hypothesis that the lack of a stable political environment adversely influences export performance via competitiveness, and that PI may actually play a more crucial role in export than in overall GDP growth. Based on detailed data on the incidence of coups in 30 SSA countries, real export growth over 1967-1986 is regressed on a principal-component of the various forms of coup events - "successful" coups, abortive coups, and coup plots - as well as on export structure, terms of trade, production capacity, and exchange rate misalignment. The results support the above hypothesis of an adverse impact of PI on export growth, and further suggest that PI has been even more deleterious to exports than to overall GDP.     

EU trade and development policy beyond the ACP: subordinating developmental to commercial imperatives in the reform of GSP

Following the stagnation of negotiations with the African, Caribbean and Pacific states, the centrepiece of the European Union's (EU's) trade and development strategy has been a reform of the Generalised System of Preferences. Although policy-makers in the Commission's Directorate General for Trade have argued they are ‘refocusing’ these preferences on the ‘neediest’, by rendering a significant proportion of emerging economies' exports ineligible for the scheme, this article argues that the reform is actually part of a broader ‘reciprocity’ agenda being pursued in the context of the current economic crisis. This is about ensuring the EU possesses sufficient offensive leverage in ongoing free trade agreement negotiations, rather than representing any mercantilist move towards greater domestic protection. In arguing that the EU's developmental trade agenda is increasingly subordinated to commercial imperatives, this article adds to a literature that has situated the study of EU trade and development policy within the field of political economy.     

Sri Lanka's ethnic conflict: at a crossroad between peace and war

In the 1990s the ethnic conflict in Sri Lanka had acquired the reputation of an orphaned and dirty war. Hence, there was widespread support when in the new millennium Norway tried to facilitate a dialogue between the Liberation Tigers of Tamil Eelam (LTTE), the main Tamil insurgent group, and the Sri Lankan government. The peace process led to a ceasefire agreement and six rounds of face‐to‐face meetings. Although progress was understandably slow, a political framework that allowed Tamil national self‐determination while simultaneously protecting Sri Lankan sovereignty and territorial integrity seemed near. However, by late 2003–early 2004, such optimism lay shattered and a return to the days of warfare seemed a real possibility. In this paper, I offer an explanation for the onset of peace talks, assess its achievements and explore whether the peace process is still salvageable or a return to warfare is more likely to mark the future.     

FEATURE REVIEW

Between 1987 and 1996 Chinese exports increased by an average of 14% each year. During this decade, export growth became a crucial determinant of overall economic growth. However, as a consequence of the East Asian financial crises, Chinese export growth slowed, threatening the successful implementation of plans to restructure the domestic Chinese economy. This paper traces the reasons for the rapid growth and subsequent slowing of Chinese exports, and asks whether the strategy provides a solid basis for the long term development of the Chinese economy. In particular, the paper focuses on the role and significance of the processing trade in boosting Chinese exports. The high proportion of imported components in processed exports questions whether China is really benefiting as much from export growth as aggregate trade figures seem to suggest.     

Fair trade slippages and Vietnam gaps: the ideological fantasies of fair trade coffee

Fair trade coffee sales have boomed since the late 1980s, making it one of the most recognised forms of ‘ethical consumerism’ in the world. Around the same time exports of lower quality coffee beans from Vietnam also boomed, launching Vietnam from an insignificant coffee exporter to the world’s second largest with historically unprecedented speed. These disparate projects have had significant impacts on thousands of farmers – with Vietnam’s new class of coffee producers representing three and a half times the number of coffee families certified by fair trade. Northern actors, however, have given far more public and positive attention to fair trade. This article will argue that this difference does not stem from a strictly objective appraisal of the relative merits and shortcomings of each project, but from the compatibility of fair trade with ‘free trade’ and its emotionally charged ideological fantasies. This includes unconscious beliefs and desires around individualism, voluntarism, democracy and the affirmation of the exaggerated power of Northern consumers – as opposed to the Southern agency and complicated collective action implied by Vietnamese coffee statecraft.