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Developing Countries and International Trade—an Alternative View
Published online by Cambridge University Press: 11 November 2008
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In a recent article in this Journal, J. F. Rweyemamu argues that existing trade relations between the developed and less developed countries are a major cause of the latter's poverty. In fact, he asserts that ‘the U.N. General Assembly emphasis on trade under the existing international division of labour is not only misplaced but may be regarded as a calculated strategy by the capitalist countries to mislead the developing countries’. Since trade is supposed to impoverish the developing world, Rweyemamu recommends measures leading to less reliance on the external sector and, more specifically, a programme of heavy industrialisation, in which ‘it can hardly be over-emphasised that import substitution and export promotion are not relevant as basic selection techniques’. I feel not only that Rweyemamu's policy proposals are detrimental to the interests of the developing world, but that the statistical findings and theoretical discussion from which they are derived contain both errors and omissions.
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References
Page 605 note 1 Rweyemamu, J. F., ‘International Trade and the Developing Countries’, in The Journal of Modern African Studies (Cambridge), VII, 2, 07 1969, p. 211Google Scholar—italics in the original. The less developed countries or L.D.C.s—sometimes referred to here as the ‘periphery’, following Rweyemamu's usage, or as the Third World—include most of the world with the exception of the following areas: North America, Western and Eastern Europe, Communist China Australia, New Zealand, Japan, and South Africa.
Page 605 note 2 G.A.T.T., International Trade, 1966 (Geneva, 1967)Google Scholar, and U.N. Monthly Bulletin of Statistics (New York), 09 1969.Google Scholar
Page 606 note 1 Rweyemamu states that, in the first half of the 1960s, exports of the L.D.C.s, excluding oil exports, grew at an annual rate of only 4 per cent. As oil makes up one-third of L.D.C, exports and has been growing at a rate in excess of 4 per cent it seems unreasonable to exclude it. However, if oil is to be left out, care should be taken to deduct oil exports from the world total to arrive at a comparable world growth rate. Note: over 250 million people live in L.D.C.s which export oil.
Page 606 note 2 G.A.T.T., International Trade, 1967 (Geneva, 1968), p. 5.Google Scholar
Page 606 note 3 Sachs, I., Foreign Trade and Economic Development of Underdeveloped Countries (Bombay, 1965), p. 67.Google Scholar
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Page 607 note 2 The share of primary products in world trade fell from 54 per cent in 1953 to 37 per cent in 1967. Over 80 per cent of the periphery's exports are primary products.
Page 607 note 3 See Nurkse, R., Patterns of Trade and Development (Stockholm, 1959)Google Scholar, in which he shows that between 1904–13 and 1944–50 U.S. manufacturing production rose three times faster than raw material consumption.
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Page 608 note 4 U.N. Economic Bulletin for Africa (New York), VI, 1, 01 1966, p. 18.Google Scholar
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Page 612 note 1 Finance and Development (Washington), 1, 1969.Google Scholar
Page 613 note 1 See Hagen, E. E., The Economics of Development (Homewood, Illinois, 1968).Google Scholar
Page 613 note 2 See Johnson, H. G., Economic Policies Towards Less Developed Countries (London, 1967), p. 56.Google Scholar
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Page 616 note 1 International Trade, 1968, p. 257.Google Scholar