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Export Q2

Export-oriented growth is crucial for economic development, enhancing efficiency and living standards through job creation and consumption options. However, developing countries face significant challenges in transport connectivity and logistics, which hinder their export potential and economic growth. Improving transport infrastructure and involving the private logistics sector are essential for these countries to enhance their global competitiveness and achieve sustainable development goals.

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Ziphokazi Zide
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9 views

Export Q2

Export-oriented growth is crucial for economic development, enhancing efficiency and living standards through job creation and consumption options. However, developing countries face significant challenges in transport connectivity and logistics, which hinder their export potential and economic growth. Improving transport infrastructure and involving the private logistics sector are essential for these countries to enhance their global competitiveness and achieve sustainable development goals.

Uploaded by

Ziphokazi Zide
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Export-oriented growth is essential for economic development.

While there are


multiple perspectives on its effects, neoclassical theory suggests that export
performance helps increase efficiency as it helps achieve greater economies of scale
and supports resource use. These opportunities represent a valuable opportunity to
strengthen the country's position in international markets. A major advantage of
international trade is that it is a key strategy for raising living standards by creating
jobs and providing citizens with additional consumption options. Achieving these
goals, however, requires a shift in perspectives from stakeholders, particularly in
countries with limited resources. These opportunities could be threatened by core
resources such as the quality of transport infrastructure and logistics services, which
would hamper the efficiency of cross-border movement of goods while reducing
economic opportunities (UNECA, 2016).

Transport remains an important development factor in every country. Insufficient


transport infrastructure affects productivity, promotes weak market integration and
affects export levels. The importance of transport infrastructure for national
economies is well documented in the literature. It leads to increased productivity,
redistribution of labour and capital, supports the reorganization of global production
networks and makes it easier to cope with different markets. Accordingly, transport
and its interconnected multimodal systems are vital in measuring a country or
region's connectivity while playing a fundamental role in accelerating growth. In
these areas, logistics has recently been recognized as an essential resource for
achieving growth and supporting an increasing number of exports. The general
perspective is that logistic services promote countries' participation in global
competitiveness if they show good levels of efficiency(UNECA, 2016).

It is well known that developing countries face challenges in transport connectivity


(org. This is the case for some African countries, where these deficiencies hamper
opportunities for economic growth, industrialization and development. Likewise,
countries in Asia, despite everything, face difficulties with roads and railways existing
corridors. In contrast, Latin American developing countries have concerns about port
facilities and high logistics costs. In addition to hampering the productivity of
domestic and foreign companies, these restrictions may also hamper the sustainable
goals sought for these economies. Despite these challenges, only a few studies can
have focused on measuring the impact of transport quality and logistics resources as
an infrastructure of services that facilitate exports from developing countries from a
business perspective. For example, greater consideration of the private logistics
sector as a key development component can represent valuable benefits for these
countries considering financial constraints. Many current policies result in optimal
use of infrastructure resources, while involving the logistics sector in facilitating trade
reforms requires the development of their services to enhance export capacity.
Involving the private logistics sector in the transportation arena is more important
than ever for developing countries, where there is still a gap compared to more
advanced countries (WorldBank.2021).

Exports are goods and services produced by one country and sold to another. The
number of exports represents the demands of globalization and countries'
participation in different markets. Export relevance as a core component for a
country's development. For example, it was found that trade in developing countries
was important through cross-border trade. The positive impact of exports on the
economic growth of less advanced countries was also demonstrated. However,
based on the export-led development hypothesis, it was found that middle-income
economies' exports showed a weak correlation with economic growth, while those of
low- and high-income economies had a smaller effect. Despite these results, the
author warns of the importance of exporting to all economies, regardless of income
level. Previous work has emphasized the relevance of export diversification. It is
believed that developing countries should diversify their exports to become more
prosperous. The author noted the non-linear effect of exports to developing
countries. The ratio of manufactured exports to gross domestic product (GDP) had a
positive impact on economic growth. In addition, it was pointed out that resource
allocation for exports to developing countries should be part of a maximization
strategy to avoid weak domestic economic integration. The commodity mix of
exports from less advanced economies influences the growth of these countries. In
general, these studies seem to agree on the role of exports in stimulating economic
growth (UNCTAD .2019).

The quality of transport infrastructure is an essential part of international


competitiveness, the provision and maintenance of which mainly depends on the
government. It is expected to promote improved development in the countries based
on network effects and the efficiency of the intermodal system.
Transportation plays a crucial role in the flow of goods, which can be hampered by
substandard infrastructure, reducing the country's ability to integrate into the global
economy. Well-developed infrastructure minimizes these adverse effects between
regions. It offers better locations for economic activities, lower transport costs and
supplements the production factors labour and capital in developing countries.
Infrastructure (including roads, rails and airports) has recently been found to benefit
South Asian economies by increasing overall exports and reducing the trade deficit
while supporting regional economic ties (UNCTAD .2019}.

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