ABSTRACT

Developing countries have entertained the belief that industrialisation is critical to their ideals of advancement. They have pursued two routes aimed at accomplishing it. The first pivoted on import substitution while the second focused on export promotion. In actuality, these strategies need not be mutually exclusive and the more hopeful of the developing nations adhere to the view that, in the fullness of time, the first will naturally shade into the second. After all, as we have just noted in the last chapter, South Korea was effectual in weaning its economy from reliance on import substitution to one guided by the lights of export promotion and, not coincidentally, attached much weight to shipbuilding in the process. In fact, shipbuilding became something of an object of veneration among the proponents of Third World industrialisation. It was celebrated for its ability to furnish domestic tonnage along the lines advocated by the United Nations Conference on Trade and Development (UNCTAD) (i.e. through a variety of import substitution) while simultaneously offering the promise of export earnings. Other would-be benefits were also evident. In view of its status as a mature industry, entry barriers are relatively low; insufficient, at any rate, to obstruct the emergence of a determined interloper. Equally alluring, the neophyte producer can quickly aspire to international competitiveness once it brings its labour-cost advantages to bear and that prospect opens up enormous possibilities for the penetration of export markets. By dint of concerted effort, mobilisation of a latent labour force and an element of protectionism, planned shipbuilding has the potential - like few others in the manufacturing sector - to propel the late-entry producer to the forefront of the global pack within a comparatively short period of time. Again, South Korea stands as the supreme example, but a host of others, ranging from Brazil to Yugoslavia, stand as only slightly less illustrious exponents of this creed.