Read on Twitter
1/10. A well written & balanced piece by my old friend & thinker ubaba uMthimkhulu @mthimz . I will add a few more experiences that challenges previous thinking on “import substitution” as a swear word in the economic development of emerging economies. https://twitter.com/mthimz/status/1337308767369785345
2/10. The books and compilation were proffered by people who intentionally understood that ideas matter & wanted to “nip” them in the bud. The fear was that nations who shed the yoke of colonization, emerged from communism would create more competition for Western company export
3/10. UNIDO ironically has stated no nation has ever emerged from poverty without industrialization. WTO and the AFCFTA recognize the need for derogation of 5-10% of tariff lines on the understanding that there will be “infant” or “special industries” that Govts can levy duties
4/10. COVID19, other recent supply chain, climate change disruptions have taught us that resilience is as important as competitiveness & that on earth all comparative advantage can shift and is transient even in a globalized and integrated world.
5/10. The world of the 1969-1990 where evidence of a negative bias towards import substitution was build in world where developed countries were lower in the development curve. At present even China is moving up the product sophistication curve and leaving Vietnam, Cambodia etc
6/10. to occupy the space for the production of less sophisticated products, while they migrate to more sophisticated products. Lower wages can be a big incentive to produce as @mthimz says for export markets with no resource or market proximity or absolute advantage
7/10. Abandoning import substitution which will never happen in practice in spite of the subtle instilling of an inferiority complex in Africa especially is like saying let’s abandon democracy because it has delivered people we don’t like? It’s the form, institutions that support
8/10. these two concepts that matter. What is poor is the “manner” in which they have been done. It’s also important to understand that efficiency & cost is not the only consideration that consumers have to have WTP (willingness to pay).
9/10. Import substitution programmes must be appropriately structured & re-enforcing clusters (aka value chains) supported appropriately as we have seen in Kenya and Tanzania to localize production in an inclusive way involving communities & outgrowers in Agric for example
10/10. The journey to export competitiveness in practice starts with import substitution & local consumption. Coke the most successful product known to man started as local product in local pharmacy. If it wasn’t supported as a local product it would never made it as an export
