Using South-South linkages to build productive capacities in developing countries
There is a growing interest among policymakers, at both the national and international levels, in rethinking development strategy around the challenge of building productive capacities.
The concept carries a certain amount of analytical fuzziness but essentially highlights the critical interactions between capital accumulation, economic diversification and technological upgrading in promoting catch-up growth and structural transformation in developing countries.
From a policy perspective, the concept of productive capacities shifts the discussion from a narrow market-based focus on short-term allocative efficiency to dynamic and long-term changes at the firm and sectoral levels which can support rising productivity and living standards at the national level.
This discussion has often polarized between those in favour and those against the state "picking winners". This distorts the actual role of industrial policy in the development process and ignores how successful developing countries have used sectoral policies in combination with macro, trade and labour market policies in their development strategy.
For most developing countries, building productive capacities is closely linked to their participation in the international division of labour. But much like the industrial policy debate, this has also led to polarized policy positions between those in favour of import substitution industrialization and those calling for rapid opening up to international market competition.
This polarized choice set also distorts the actual experience with successful experiences of integration in to the global economy and simplifies the policy challenges involved in maximizing the gains from external integration.
The real challenge for developing countries from this perspective is how to use trade, investment and technology flows to support strong productivity growth, increased productive employment, and rising real wages without generating external imbalances and distortions that could upset the catch-up process.
This challenge has been met with different degrees of success in different parts of the developing world during the past two decades. Particularly in East Asia this challenge has been successfully managed in the context of strong regional linkages. However, other regions have struggled to replicate this experience. The emergence of new growth poles in the South has revived interest in regional arrangements and mechanisms in the areas of trade and finance.
To date, the implications and opportunities for the productive economy have been less thoroughly explored.
Objective
The expert meeting will explore these issues in the context of growing economic linkages among developing countries and consider how south south cooperation can ensure these linkages complement efforts to build productive capabilities in countries with different initial endowments, institutional histories and policy capacities.
The meeting will provide a forum to:
- Present good practice and compare notes on innovative approaches in critical policy areas.
- Review issues and challenges to policy design at the national and international levels.
- Identify opportunities to further inter-agency collaboration, knowledge-sharing and policy debate.
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Inputs from experts Experts nominated by member States are encouraged to submit brief papers (approximately five pages) as contributions to the work of the meeting. The papers will be made available at the meeting in the form and language in which they are received. Papers should be submitted by 9 February 2011 |
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