hb -
"...the fact remains that in order to obtain the forex reserves they need, these countries have to produce a trade surplus, which in turn means that their economic growth must be suppressed to avoid a surge in imports...."
Both imports and exports are positive influences on the standard of living, with imports often being more important in advanced economies as a wide variety of distribution infrastructure and other value-add (especially to imported raw materials)is involved, whereas exports may simply be the spillover of excess production capacity. In more primitive economies, the imports tend to be of necessities not locally available, rather than just lower cost products that release resources for more productive uses (as in the advanced economies), and the exports are the only means of payment. To the extent that governments refrain from intervention in the labor markets, advanced economies are generally full employment economies, whereas primitive economies usually will have a significant excess supply of low productivity labor, unenhanced by capital investments.
Regards, Don |
