Logo

Synopsis Why have exports from poorer countries failed to increase more rapidly following trade liberalization? What can be done to improve performance? Research on the response of firms in the private sector to economic reform can underpin new approaches to export promotion for poorer developing countries. For a long time, protective trade policies, poorly performing state-owned industries and state controls over the private sector were blamed for poor export performance in Africa and south Asia. Now that some of these problems have been remedied, other obstacles have come to light. The effect of economic liberalization and adjustment on the performance of poor countries has been cause for concern. Trade liberalization should increase incentives to export and facilitate business enterprise by encouraging private ownership through privatization and by attracting foreign investment. Macro-economic stability ought to boost business confidence and performance. All these factors should promote exports, offsetting job and income losses caused by the closure or reorganization of inefficient enterprises and industries yet, although some degree of reform and stability it is without export growth that was expected.