It has become commonplace to contrast the newly industrializing countries (NICs) in Latin America and East Asia as having followed inward-oriented and outward-oriented development strategies, respectively. These are not mutually exclusive alternatives, however. They are more appropriately seen as historically interacting approaches, with the NICs in both regions moving toward mixed strategies in the 1970s and 1980s. In particular, the development of second-stage import-substitution industries has allowed the Latin American and East Asian NICs to meet a variety of domestic development objectives and ultimately to enhance the flexibility of their export structures. The NICs today are pivotal actors in a global manufacturing system with increasingly complex product networks and an unprecedented degree of geographical specialization. This has led to greater heterogeneity in the export profiles of the NICs within each region. The new patterns of export specialization are based on distinctive industrial structures at the national level and pose special issues for industrial policy and the future internationalization of each NIC.
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References
1.
1. Other countries that have pursued inward-oriented development strategies in the postwar period include some South Asian nations, in particular India, as well as the European socialist countries led by the Soviet Union.
2.
Bela Balassaet al. , Toward Renewed Economic Growth in Latin America (Washington, DC: Institute of International Economics, 1986).
3.
3. This topic is handled nicely in Laurence Whitehead, “Tigers in Latin America?” this issue of The Annals of the American Academy of Political and Social Science.
4.
Robert R. Kaufman, “How Societies Change Development Models or Keep Them: Reflections on the Latin American Experience in the 1930s and the Post-War World,” in ibid.
5.
5. The main limitations of both import-substituting and export-oriented development strategies in the NICs are outlined in Gary Gereffi, “International Economics and Domestic Policies,” in Economy and Society: State of the Art, ed. Alberto Martinelli and Neil Smelser (Newbury Park, CA: Sage, forthcoming).
6.
6. Even Hong Kong, the most laissez-faire of the NICs, benefited from a period of disguised ISI on the Chinese mainland. Refugees to Hong Kong from the mainland included a significant segment of the Shanghai capitalist class and a huge supply of politically unorganized labor, and they brought with them technical know-how, skills, and even machinery. See Stephan Haggard and Tun-jen Cheng, “State and Foreign Capital in the East Asian NICs,” in The Political Economy of the New Asian Industrialism, ed. Frederic C. Deyo (Ithaca, NY: Cornell University Press, 1987), pp. 106-110.
7.
7. This point is amply documented in Gereffi and Wyman, eds., Manufactured Miracles.
8.
8. See Gary Gereffi and Donald Wyman, “Determinants of Development Strategies in Latin America and East Asia,” in Pacific Dynamics: The International Politics of Industrial Change, ed. Stephan Haggard and Chung-in Moon (Boulder, CO: Westview Press, 1989).
9.
9. Cheng, “Political Regimes and Development Strategies,” in Manufactured Miracles, ed. Gereffi and Wyman.
10.
10. Simon Teitel and Francisco E. Thoumi, “From Import Substitution to Exports: The Manufacturing Exports Experience of Argentina and Brazil,”Economic Development and Cultural Change, 34(3):458 (Apr. 1986).
11.
11. For example, Teitel and Thoumi refer to the East Asian NICs as still following “an export-oriented strategy largely based on unskilled labor-intensive industries.” Ibid., p. 486.
12.
12. A clothing manufacturer in Taiwan who exports most of his production to the United States told me proudly when I visited his plant, “We have moved up in quality from Filene's Basement to Bloomingdale's and Saks Fifth Avenue.”
13.
One ultramodern plant, in the words of its director, brings together “U.S. managers, European technology, Japanese manufacturing systems, and Mexican workers.” Ibid., p. 39.
14.
World Bank , World Development Report 1987, chap. 3.
15.
15. World Bank, World Development Report 1987, p. 47. The overall average annual growth rate for labor-intensive manufactured exports from developing countries was 12.4 percent for the period 1970-84, compared to a growth rate of 15.1 percent for nontraditional manufactured exports, such as machinery and transport equipment, chemicals, and iron and steel.
16.
16. World Bank, World Development Report, various issues. The high-income oil-exporting countries are excluded from these lists.
17.
17. World Bank, World Development Report 1988 (New York: Oxford University Press, 1988), tabs. 3, 11, and 12.
18.
18. Ibid., tab. 11.
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19. The only exceptions are Argentina, whose primary export ties have been with the Soviet Union, in wheat, and with Italy, in leather; and Singapore, which relied most heavily on exports to Malaysia in the late 1960s and 1970s.
20.
20. These rounded figures come from United Nations, 1986 International Trade Statistics Yearbook (New York: United Nations, 1988), vol. 1.
21.
21. The product data are usually at the three-digit level of commodity classification and come from U.S. Department of Commerce, Foreign Trade Highlights (Washington, DC: Bureau of the Census, various years).
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22. Donald B. Keesing, “Linking up to Distant Markets: South to North Exports of Manufactured Consumer Goods,”American Economic Review, 73(2):338-342 (May 1983).
23.
23. Hong Kong, quite surprisingly, has virtually no footwear exports to the United States despite its high profile in other traditional manufactured exports like apparel and textiles. Footwear exports to the American market are highly specialized among several of the other NICs, however. For example, South Korea's major footwear export is leather athletic shoes, Taiwan is the primary supplier of vinyl, plastic, and rubber footwear, while Brazil concentrates on leather shoes for women and on leather sandals.
24.
24. These exports also are specialized by country. Taiwan is the leading U.S. supplier of baby carriages, strollers, and stuffed dolls. South Korea sends the largest quantity of stuffed animals, while Hong Kong is the major exporter of toys having an electric motor.
25.
25. See “Sizzling Hot Chips: Asia Is the Source of the Semiconductor Industry's Spectacular Growth,”Far Eastern Economic Review, 18 Aug. 1988, pp. 80-86.
26.
26. For a detailed analysis of the role of the state in recent East Asian industrialization, see Robert Wade, “Industrial Policy in East Asia - Does It Lead or Follow the Market?” in Manufactured Miracles, ed. Gereffi and Wyman.
27.
27. See Gary Gereffi, “Industrial Structure and Development Strategies in Latin America and East Asia,” in Manufactured Miracles, ed. Gereffi and Wyman.
