Macleans Mzumara

Comparative advantage and economic performance of East African Community (EAC) member states

Abstract The researchers have investigated comparative advantage in the East African Community member states. They have also investigated economic performance of the member states. Balassa’s Revealed Comparative Advantage (RCA) index was used to establish member states’ comparative advantage. An analysis of real GDP, employment levels and stability of exchange rates was used to measure their economic performance. The results show Kenya has comparative advantage in 471 product codes, Tanzania in 471 products, Uganda in 437 product codes, Rwanda in 275 products codes and Burundi in 152 product codes. There is therefore evidence that the member states have revealed comparative advantage although in limited products and that economic indicators show they have performed well. However, there is a need that GDP growth rates should exceed population growth rates in order to have sustainable economic growth.

Botswana a Mono-Diamond Economy or Not?

Botswana is a country known for being the world’s largest producer of diamonds in value. The product contributes substantially to the country’s GDP and revenues. It is the major single export of Botswana. However, diamond is a non-renewable natural resource. This article is intended to establish whether Botswana has any comparative advantage in other products other than diamonds in order to have sustainable development beyond mining of diamonds.

Does Mercosur Possess Comparative Advantage

Abstract The researchers investigated comparative advantage in MERCOSUR. The main objective was to find out whether MERCOSUR member states possess comparative advantage. Balassa’s Revealed Comparative Advantage (RCA) technique was applied. Brazil was found to have comparative advantage in 674 product lines, Argentina in 518 product lines, Paraguay in 485 product lines, Uruguay 312 product lines and Venezuela in 83 product lines. The researchers concluded that MERCOSUR indeed has comparative advantage although the number of products in which it has comparative advantage is very limited. They therefore recommended that MERCOSUR should consider admitting more members in order to improve the number of the products in which comparative advantage may be revealed.

Comparative Advantage and Export Development: The Case of Egypt

The authors investigated the comparative advantage of Egypt and highlighted the role played by export development. The authors found that Egypt has revealed comparative (RCA) ≥ 1 in 733 product lines. They have concluded that Egypt has comparative advantage and is specialized in the production of such products. They have recommended that Egypt put in place an appropriate export development strategy to assist it with product development and adaptation.

Is South Africa really a giant of Sub-Saharan Africa in international trade?

The study investigated the comparative advantage of South Africa and the role played by export promotion. South Africa was found to have comparative advantage in 824 product lines. The country was found to be a giant player in SubSaharan Africa to the extent of surpassing other African countries such as Egypt, Mozambique, Botswana and Zimbabwe. South Africa also surpassed countries such as Mexico and Canada. The SubSaharan country should continue to promote its exports in international markets.

Inter-sectoral comparative advantage of Tanzania and impact on international purchasing

The authors have analyzed inter-sectoral comparative advantage of Tanzania and impact on international purchasing. Comparative advantage fairly exists in some sectors in Tanzania. Comparative disadvantage also exists mainly in the foot wear/head gear and transportation sectors. The sectors with high numbers of products have positive impact on international purchasing as they can be a competitive source to procure from. As the case may be, there is still a room in Tanzania to improve on competitiveness. It is recommended that Tanzania comes up with sectoral policies that can enhance competitiveness further. It is also recommended that a more focused export promotion strategy be promoted. Attracting foreign direct investment especially trans-national corporations can assist Tanzania to improve on its competitive advantage mainly through technology transfer.

Inter-sectoral competitive advantage of Madagascar

The author has investigated inter-sectoral competitive advantage of Madagascar through the use of Balassa technique. There is a strong evidence of existence of competitive advantage in the textiles sector in Madagascar. There is also a strong evidence of lack of competitive advantage in the plastic/rubber sector. The majority of the sectors show little evidence of competitive advantage in Madagascar in various degrees. These sectors include: foot wear/head gear; stone/glass; raw hide, skins, leather and furs; chemicals and allied industries; transportation; mineral products; metals; foodstuffs; wood and wood products; and animal and animal products. It is recommended that Madagascar move its resources from less competitive sectors to other sectors such as textiles, machine/electrical, vegetable products and miscellaneous. It is further recommended that Madagascar should work towards attracting foreign direct investment. It should also increase its effort in exploration of new endowments.

An Analysis of Inter-Sectoral Comparative Advantage of Seychelles

The authors investigated inter-sectoral comparative advantage of Seychelles. The sector with the highest inter-sectoral comparative advantage is the Animal and animal products sector followed by the miscellaneous sector. Least is the raw hides, skins, leather and furs sector with no comparative advantage at all. The products that dominate the animal and animal products sector are various types of fish or sea products. However, the top two sectors do have very few products which have demonstrated to have comparative advantage. In general, inter-sectoral comparative advantage in Seychelles is very limited. It is recommended that Seychelles should come up with sectoral strategies to boost comparative advantage. There is a need to diversify from fish products to include other products. Seychelles should also encourage inward foreign direct investment specifically from multi-national firms which can bring in technology and improve on comparative advantage.

Trade liberalization: is it a useful program for agricultural and manufacturing sectors in developing countries?

The authors investigated whether trade liberalization is a useful programme for agricultural and manufacturing sectors in the developing countries. A historical approach was used to measure impact. There are mixed results regarding the impact of trade liberalization. The results which show negative impact are generalized without being very exact the nature of impact. The results which show positive impact of trade liberalization have generally based their evidence on real GDP and per capita income growth rates while ignoring other factors which contribute to their growth. Two schools of thought have emerged namely pro-trade liberalization and those against trade liberalization. Indicators are purposely chosen and the results support that school of thought. It is recommended that studies of trade liberalization use a number of indicators to measure impact. That studies should be able to iso;ate other influences on the indicator before making conclusions. There is a need to come up with uniform indicators to measure impact. A developing country should initiate a comprehensive study of its economy before entering zero tariff agreement with developed country. Developing countries should attract transnational corporations to improve efficiency. Policies which encourage redistribution of incomes should be introduced.