Thyge Enevoldsen

South-South Trade and Development: Manufacturers in the New International Division of Labor . By Steen Folke, Niels Fold, and Thyge Enevoldsen. New York: St. Martin's Press, 1993. xiv, 267 pp.

List of Tables, Figures and Maps - Preface - List of Acronyms - PART 1: APPROACHES - Introduction: South-South Trade: The Global Context - Development of South-South Trade since the 1960s - South-South Trade and Cooperation: The Political Setting - South-South Trade and Development: Theoretical Viewpoints - South-South Trade in Manufactured Goods since the 1960s - PART 2: CASES - South-South Trade in a Regional Perspective: Three Cases - South-South Export of Manufactures as Part of Global Export-Oriented Industrialization: The Case of Malaysia - Transfer of Technology in South-South Trade: Indias Export of Capital Goods to Tanzania - Conclusion: Problems and Potentials in South-South Trade - Bibliography - Index

69.95.

This chapter contains a fairly comprehensive analysis of the development of South-South trade in manufactured goods from the 1960s to the 1980s.1 The analysis focuses on the exports of 74 developing countries, including virtually all the major countries in this trade.2 Thus, to the extent that data availability has made it possible it approximates a total survey. For each country the composition and development of manufactured exports has been studied with main emphasis on exports to the South, but including also exports to the North for comparative purposes.

South-South Trade in Manufactured Goods since the 1960s

The last two decades have witnessed a tendency towards a new international division of labour, spearheaded by the Newly Industrialising Countries (NICs). Traditionally the developing countries in the South1 have exported raw materials to the developed countries in the North in exchange for manufactured goods, whereas the NICs have developed a very considerable export of manufactured goods (textiles, clothing, electronics) primarily to the North.2

Introduction: South-South Trade — The Global Context

The emergence of South-South cooperation as an important concept in the discussion of development strategies is closely related to the liquidation of colonialism in the 1950s and 1960s. Although the subject was discussed and various practical efforts were launched in a regional, Latin American context during the 1950s it was with the establishment of the Non-Aligned Movement (NAM) and later the group of 77 (G77) in the 1960s that South-South cooperation in its global context was put on the international agenda. In addition the concept materialised in the regional context in numerous forms of cooperation schemes among groupings of developing countries that were established in the same period.

South-South Trade and Cooperation: The Political Setting

South-South trade has existed for centuries in the form of exchange of commodities (grain, salt and so on) among neighbouring countries and regions. During the colonial epoch South-South trade was extended and transformed to suit the colonial production system; for example trade in raw materials to other locations for refinery or processing. But the main emphasis was on South-North and North-South trade: the classical division of labour, the exchange of raw materials from the South for manufactured goods from the North.

Conclusion: Problems and Potentials in South-South Trade

Regional trade flows vary very much in scope, form, and content and the ways they influence the development strategies — positively or negatively — of the countries involved. In line with the whole context of this book we shall delimit the subject to include solely the regional trade in manufactured goods despite the fact that agricultural goods and other raw materials are traded regionally as well. Further, we are specifically interested in regional trade flows of manufactured goods within some kind of institutional framework, that is, in the framework of regional cooperation schemes among developing countries. These schemes mark a deliberate effort — at least formally — by the involved nation states to integrate their mutual trade in broader considerations on industrialisation and development, both at the national and the regional level. In addition, traditional ‘neighbour-trade’ exists among different countries but as such it is not the result of deliberate South-South cooperation (at the state level) although the relations may have a considerable impact on development.

South-South Trade in a Regional Perspective: Three Cases

Long-distance trade between regions in what constitutes the present day’s Third World has existed for centuries going back to before the first arrival of European tradesmen in the area.

Development of South-South Trade

In a South-South perspective the story of India’s export of capital goods to Tanzania is a rather sad story — both viewed from the exporter’s and the importer’s side. But it is also enlightening. Although, as always, a number of circumstances are specific there are lessons to be learnt also for other countries engaged or engaging in South-South trade in capital goods. Moreover, the experience is not exclusively negative; it also demonstrates that against all odds a South-South transfer of technology is possible.1

Transfer of Technology in South-South Trade: India’s Export of Capital Goods to Tanzania

In January 1990, by coincidence, two very different articles on South-South trade were published simultaneously in two different journals, namely Greenaway and Milner (1990) in The World Bank Research Observer and Hulugalle (1990) in IDS Bulletin. The former has an essentially negative and the latter a much more positive attitude to the active promotion of South-South trade. A brief presentation of their main arguments can serve as a point of departure for our discussion of theoretical viewpoints on South-South trade and development.

South-South Trade and Development: Theoretical Viewpoints

During the 1960s Malaysia’s manufacturing industry was gradually transformed; from activities mainly concentrated around tin mining and simple processing of rubber, manufacturing of consumer goods was developed through a moderate import-substitution policy. This trend was strengthened by the collapse of the federation with Singapore in 1965 (inaugurated in 1963), which brought an end to the ‘domestic’ market opportunities for manufacturing industry established in Singapore due to expectations of a wider regional market. Instead of being supplied from the relatively more advanced Singaporean industry, the Malaysian state embarked upon a massive development of its physical and institutional infrastructure to attract industrial investors, foreign as well as domestic.