Policies for an Oil Exporting Country Prospects for and Challenges - - PowerPoint PPT Presentation
Development Strategy & Policies for an Oil Exporting Country Prospects for and Challenges of Industrialization and Employment Creation in Iran M. Shafaeddin 2015, Tehran Argument Iran depends on Petroleum for income and foreign
Prospects for and Challenges of Industrialization and Employment Creation in Iran
2015, Tehran
exchanges;
employment
for:
–Diversification –Development –Employment Creation??
Upgrading
–A. Trade and Industrial »General »Modalities –B. Technological Policies
–WTO issues
–Sectoral Issues –Dynamic Items
Developing Country:
– Dev. upward of the social system – Identifying basic needs
–Growth: Dev. of basic needs; dynamic Employment & Socio-economic factors
–Positive impact: oil revenues
–Negative impacts
–imports; migration
– F.E. for importation of “supply determined” items – Agricultural products( particularly foods); & wage goods – Institutional & organizational factors
(e.g. manufactured)
determined); price of manufactured goods : cost determined
Capabilities
Capabilities
Coordination System
factors
Context:
– Other firms Specific country/features – Markets: specific Specific environment/gov. Policies of other countries – Gov. Particular product/s – Consumers World econ. Conditions
– Non-price factors: » Institutions; organization; infrastructure
– 5 out of 100 in LDCs & China – Rest: developed countries: mainly USA/EU
– Market failure – Entrepreneurship – Gov. failure Is then the elimination of gov. intervention justified??
Actions
entrepreneurs
– Institutions – infrastructure
Action
state for:
– Decision making – Policy formulation – Policy implementation
Types:
Trade and Industrial Technological Strategic at enterprise levels Macroeconomics
Nature:
– To serve long-run dev. Objectives
– But: avoid:
They are inefficient
– Different: externalities; learning effects; linkages
– Different: externalities; learning effects; linkages
inputs free: condionalities: Performance/incentives; rewards/pressure
– Subsidy; tax holiday; fiscal incentives; phase out
– Other Consumer goods – Intermediate products used in first group – -gradually liberalize first group
– Sophisticated/durable C goods; – intermediate goods for the second group – Some machinery used in production of first group – Liberalize some of second group
– Sophisticated/durable C goods; – intermediate goods for the second group – Some machinery used in production of first group
– Role of firms & market increases – Inter-firm relations ;clustering – Gov-business cooperation
imports of inputs( yarn,etc.)
yarn
– production – Process – Quality
specific activity
– Technology dev. – Skills – Time & Experience – Costly
But: direct participation of Gov. to be decreased over time Avoid rigid/prolong intervention
Technology : Embodied in a machine; tacit; spill-over
– Process innovation – Product innovation – Own design – Upgrading
COUPS-INS:-Ps
INs: Avoid
Requires:
Ps
Control of K flows
– Create value to consumers – Reduce P.E. of Demand – Quality – Timing of delivery – Requirements: Learning; skills; upgrading
– Channels for X – But little tech. spill-over – It should be targeted – Capital flows should be managed/controlled
Share of component in X
6.4
14.5
16.7
Shares of M in peoduction
17-7
23.2
24
22.3 WTO entry
– But first : appreciation that WTO Rules are not dev.
– Then: they should change: Needs Bargaining Power?? – Do LDCs have BP? – Yes Some:
– 23% of X of DCs – 30 %: when intra-trade of EC is excluded – China included:… %....
– Need for flexibility – Consideration of different stages of Dev. – Needs for dynamic trade policy as coungtries develop
– Answer:
Value Share in World An.Av.
Growth rate 2005 2013 2013 2005-13
5120.7 18851 100 10.6 Foods 460.9 1470.4 7.8 9.3 Ag.Raw mat. 138.2 282.7 1.5 5.7 Total Agriculture 599.1 1753.2 9.3 8.6 Ores and Metals 235.6 1295.3 6.5 14.1 Manufactured goods 3697.1 11952.9 63.4 9.5 Total non-fuel 4531.8 15010.3 79.2 9.6 Fuel 373.8 3412.1 18.1 18.5 Discrepancies (215.1) (438.1) (2.7)
Table 4:
It picked-up during 2000-2012
1980-2000 2000-2012 Mg/Xg
1.45 An.Av.Growth rarte: X 4.6 11.6 M
16.8
2000 2012 (Ms-Xs)/Xs
Value($b) Growth rates % Share in X 2012 2000-12
Transport 2.98 14.9 0.99 Personal, cultural & recreational 0.178 n.a. 2.5 Imports Travel 6.6 12.2 1.74 Comunication 0.21 n.a. n.a.
0.33 n.a n.a. Financial srevices 0.48 n.a. n.a. Personal,cultural & Recreational 0.267 n.a. n.a.
Table 2: Definition of DP: NO. Total Dynamic products 46 Manufactured: 13 Capital goods Others 9 Minerals & Metals 12 Foods 11
8
– Other business services – Travel
– transport
– Financial services – Royalties Or: high growth rate: computer information
– Communication – Insurances – Or: very high growth rate: construction
– Personal, cultural, recreational
– Exhaustibility;Low employment – Low linkages; High risks of dependence on oil
– Diversification – Employment creation
– Raise the social system – Identify basic needs in a dynamic context – Dev. As an end; trade and diversification are means – X diversification: a part of diversification of GDP – Diversification. results of Dev.
– Short & medium terms go into oil by increasing the price – Use revenues for development
– Trae, industrial ,Technological, institutional, organizational
– Needs for infant industry protection – But problems of prolonged protection
– Important at early stages – Needs for decrease in favour of market & firms over time
pysical,institutional,organiyational,political
– Utilizing opportunities – Dealing with constraints
For having listened to me At Your Disposal for Questions