Strategies for development
The strategies adopted for development vary from the developed to developing nations. Some of the important common strategies of development discussed below are as follows:
a) The Agricultural Transformation Strategy
Countries attempt to transform the structure of their economies by adopting modern agrarian technologies, with significant improvement in agricultural yields. Often, the newer technologies are relatively more capital intensive. If appropriately supplemented by an industrialisation programme, excess labour (from agriculture) may be absorbed in the industrial sector, and enhance the country’s productivity.
b) The Export Orientation Strategy
Countries, specifically certain Asian economies like South Korea, and more recently China, have successfully derived large gains from this strategy. In some countries, export orientation, or dependence on exports, could even be higher than domestic demand. Also referred to as outward orientation, this strategy runs the risk of being severely impacted by the vagaries in the international economic climate. Countries that adopt this strategy need strong exchange rate management programmes.
c) The Import Substitution Strategy
Several developing economies adopted this strategy to pursue goals of selfsufficiency. This strategy is more pronounced in the agricultural sector dominated economics driven by the innate need for food and nutritional security. Often this strategy also entails strong thrift (savings) programmes, supplemented by policies that facilitate foreign direct investment.
Several developing economies adopted this strategy to pursue goals of selfsufficiency.
This strategy is more pronounced in the agricultural sector dominated economics driven by the innate need for food and nutritional security. Often this strategy also entails strong thrift (savings) programmes, supplemented by policies that facilitate foreign direct investment.
d) The Urbanization Strategy
An urbanization policy often entails a coherent migration programme. If executed well, this strategy plays a vital role in bringing huge gains in economic efficiency (in terms of resource utilization) and all-round productivity improvements (increasing returns to scale of operation, improved network, and infrastructure). During the 1950s and the early 1960s, there was vigorous emphasis on industrialization and urbanization. But, gradually, country after country realized that the answer to the problems of development was not necessarily urbanization and industrialization. They realised that the whole development process should be so articulated that urbanization should promote rural development, and that rural development should back up urban development.
e) The Decentralization Strategy
In recent years, many countries in the world have talked of decentralization. It is believed that decentralization would hasten the development process. In actual practice, the centralization process weakens popular participation, which is an indispensable element of development. The votaries of decentralization, believe that a decentralized system which allows participatory development from below is a must for a developing society. However, many also believe that a proper blend of centralized and decentralized systems is necessary for faster development, giving the argument that “centralization in autarchic forms is bad, and so is decentralization in anarchic forms.”
f) Socio-Economic Planning Strategy
The post World War II period saw the resurgence of economic planning as a major strategy of development. The Russian experience of centralized planning boosted the morale of these developmental economists. Centralized planning gradually led to decentralized planning for faster development of regional and local areas. In India, planning has percolated to even state, district, and village levels. Decentralized planning has been emphasized on the grounds that it provides better allocation of resources, and faster development at the grassroots level.
g) The Growth with Distribution Strategy
The controversy of growth measured in terms of GNP, or per capita income as a strategy of development, as against distributive justice, or quality of life is well known. India, and several other countries, such as China have a similar view point. Growth first, and distribution second, with the belief in the tickle down effect suits the interest of the ruling elites of the LDCs, and the interest of the aid-giving countries as well. It was further believed that once growth began, everyone’s interest could be taken care off. But, the question of social justice, the upliftment of the poor, and the issues relating to the quality of life was almost lost. Therefore, the strategy of growth with distributive justice has occupied centre stage in discussions in developing countries.
It is by no means to contend that countries face similar problems or achieve similar successes from adopting a particular strategy. Nor can one presume that a country that has successfully gained from a chosen strategy might be equally successful with others. Different countries at different points of time lay somewhat more, or less emphasis on
some particular strategy or another. The experience with outcomes from those strategies depends, not just on the initial economic conditions, but on the social, cultural, and religious contours, too. Often, the pace of adoption of a strategy may be critical in determining success in implementation.