Economic Development Strategies

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How do the two main economic development strategies relate to economic growth/ development strategies and based on that discussion, what is actual today with regard to economic development? Development Economics Arman Poghosyan Yerevan, 2011 Growth and development are usually discussed in the same context while the goals of each are very different. Growth is mainly the process of expanding the size of community through the use of natural resources, economic resources and land. While development, on the other hand, is the process of improving living standards of community. Growth is critical for any community, but it doesn’t necessarily lead to development. Though usually there is no development without growth. One way to develop without growing is through two main economic development strategies, which are import substitution strategy and export promotion strategy. These two strategies were used by many countries to develop their economy. The choice between these two competing strategies is often difficult and subject of discussion of policy makers. And this choice often can be crucial. Import substitution strategy promotes domestic industry by substituting externally produced goods and services. Generally, countries applying import substitution strategies start with producing goods that don’t need an advanced technology. These goods usually are basic necessities such as food, water and energy. This strategy encourages development within a nation in order to save on foreign exchange, provide jobs and reduce dependency from already developed countries. The idea is to learn from developed countries. It’s not for catching up with the rich, although there were some catching up, but it is another story. It’s for creating a developed economy which can face economic shocks and respond to them. Import
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