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Factors Responsible for Deteriorating Export Conditions in Developing Countries

Essay by   •  March 28, 2012  •  Research Paper  •  2,128 Words (9 Pages)  •  1,854 Views

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Hooreen Tasneem Ahmed (htasneem@gmail.com)


Exports are considered to be most important for any country to increase its GDP level, reduce poverty level and unemployment. Considering the increasing importance of the international trade this paper aims to clearly identify the factors which are affecting the exports of developing countries and are not letting them expand in the international trade.

1. Introduction:

The term export also known as the international trade is defined as the exchange of services, goods and money across the national border. In a simple way we can say that it is trade between the countries.

Export is a very significant mode to earn the foreign income for all developing countries. The developing countries are said to be developing due to lower level of GDP, far above the ground poverty and sky-scraping unemployment. Export is one approach for the developing countries to make their economies strong.

The problem which different sectors of developing countries have to face can be external like trade barriers, unfavourable terms of trade and quality and standards internal may include quotas and tariffs and high cost of inputs; they all collectively contribute to the poor exports of the these countries.

This paper aims to discuss various problems being faced by sectors like agriculture and industry of the developing countries while exporting and to find out various possible solutions for the sectors of the countries to export easily in different states and make economy improved than prior.

1.1 Problem statement:

All developing countries are making an effort to improve their exports and make their country a better place for the export purpose. The emphasis of this paper is to get to know that what factors are responsible for the deprived exports in the developing countries.

1.2 Theoretical aspect:

The study gives the literature overview of the factors that created problem in the developing countries in different sectors. The topic which has being selected by the researcher was not being this much highly structured so this is a little contribution of the researcher to this field so that the field can be studied more properly.

1.3 Applied aspect:

The study conducted on the export problems can be applied to all the large, medium and small sized firms of industrial sectors present in the developing countries as well as to the agricultural sector. The firms can have knowledge about the barriers they are facing and some possible measures that can be taken to remove the inconvenience and make the export crisis better for the firms and the country as well.

1.4 Objective of the study:

The objective of this study is to bring in view the factors which are acting as barriers for export of the developing countries and identify the reasons which are making them lack behind in export from the developed countries.

2. Literature Review:

When the past researches were being reviewed the researcher found out some information that could be useful for the study being conducted.

Exports are expressed as a ratio to output in order to account for the effect of expansion of production capacity. Hoekman and Djankov (1998) analyze the enormity of modify in the export structure in Central and Eastern European countries. The study examines the relative importance of processing trade, imports of input, and FDI as determinants of the countries' export performance in European Union markets. The findings of the study suggest that in most countries export of intermediate goods and machinery impel the changes in export. It is also recognized that reduction of real exchange, industrialization and expansion of communication facilities significantly promote exports.

The recent upsurge of concern about globalization, exhibited in Seattle, Washington, Prague and other cities where international policy makers have met, makes it clear that a continuation of the globalizing trend of the last fifty years is far from inevitable.

Participation in the trend to globalization is, as Wolf (2001) has noted, a choice that must be

made by policy makers. Further, there is a strong interdependence between the decisions of

policy makers. If some major countries turn away from world markets--as was the case in the

1930s - The result can be a downward spiral in world trade that hurts even those who would like

to remain integrated with the world economy.

Even at the national level, the choice of policies to manage interactions with the world

economy is not simple. More and more, trade policy reform requires the development of

institutions, rather than merely the reform and streamlining of border barriers. Many of "behind the border" reforms that are involved require institutional capacity that is in scarce supply in developing countries. In addition, supporting policies to help alleviate adverse impacts

on particular groups are likely to be needed. As Rodrik (1997) argues, it seems likely that

Globalization will be sustainable only if it is accompanied by policies that equip people to take

advantage of its benefits.

Export and developing countries:

There is a serious concern that some recent approaches to trade policy reform may have created problems for developing countries. The World Trade Organization is much more comprehensive than its predecessor, the General Agreement on Trade and Tariffs (GATT), and this comprehensiveness appears to be creating some difficulties (Finger and Schuler 2001).

Indeed, developing countries' problems in implementing the Uruguay Round agreements were one of the factors that derailed the Seattle Ministerial meeting of the World Trade Organization.




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