to boost exports a country can devaluate its currency, but often it is the people who suffer the consequences, as their work and the country's resources are also devaluated and the BOP situation might become even worse as imports become more expensive.

Thanks Dear Sir

Devaluating our currency is definitely an instant way to boost export. However, it comes with undesirable consequences. It might not only hurt our own people, but it also upset our trading partners. Just like what China do to the US.

To boost export, today several developing countries downstream their foremost industries. These industries are usually the ones with comparative advantage. This strategy allows them to gain more added value as they export end products instead of raw materials or intermediate outputs. Eventually, this strategy will help them improve their ballance of payment. Surely, government assistance is needed for securing new technology as well as funding

I agree with Yudhi, devaluation has many challenges and often leads to a sell-out of resources, meaning it creates a neo-colonial trade structure. A country like India might be able to avoid this through import substitution, but decades have shown that this did not really work: it made the Indian economy relatively little competitive.

Product and market diversification along with currency devaluation may work. There is a need to improve trading relations with neighboring nations and more emphasis may be on import substitution strategy. Imports of capital products to improve productivity and competitiveness of export oriented local industry may promoted.

Thanks for your contribution my dear friends

In India, various schemes like Make in India,Skill India etc. have been started by our Govt. to promote import substitution,and to encourage entrepreneurship.

Hope,it will work,and will bring the desired results.

In Peru, it is still an unresolved problem, however the foreign exchange deficit is being tested with the application of the SIAL approach, which is already applied in Mexico; created in France, it identifies traditional products and from there it is put in value, that is to say, the identity artifact of the product is strengthened, proper to the place, the process of ancestral production is strengthened and the tourist circuit is generated, added to it the products end, whether food, dishes, etc. A viable alternative to improve the trade balance may be this, insofar as India has ancestral products with sufficient capacity to generate tourist circuits that in turn expand their radios of cumulative confidence. Of course it must be a measure of many others, it should be an integral, interdisciplinary proposal.

Be Indian, bye Indian is a slogan I already came across when I came to India for the first time more than 30 years ago. Here in Fiji the Government asks us the "Buy Fijian made". Of course a country like Fiji has more opportunities to do import substitution, but limitations are obvious.

Import substitution policy used to be pursued by developing nations in their attempt to boost their industries, while at the same time to reduce their dependency on foreign import. This policy was inspired by Prebisch & Singer thesis which drove peripheral economies to promote state-backed industrialization through the infant industry argument. This policy was undoubtedly required heavy government subsidy as well as trade protection. However, this policy was abandoned in the 80's and 90"s due to heavy pressure by the IMF and the World Bank with their structural adjustment program. Now, here we are in a free trade world. Since we are all bound by at least one free trade agreements, it would be hard to return to import substitution policy.

import substitution industrialization (isi) worked mainly when high tariff walls were established to protect industries in the country. This lead to decline of efficiencies and technological innovations, as competition with outside producers went down. The national industries were protected too much. Over time consumers started to bother when they got second hand technologies at prices that were often higher than better technologies outside the country, which became very expensive as a result of high tariff barriers.

ISI never worked in the second half of the 20th century, full stop. Even less so today than in the past. In Latin America, it collapsed under its own weight in the early 1980s. This led to a lost decade, where a large chunk of the existing productive capacity was destroyed because it was economically and technically obsolete since the beginning and could only survive thanks to the rent received from the government and paid by the taxpayers and the consumers. In Africa, I do not have example of successful "African Socialist" experiments, but I may miss something. South Africa may be an exception, it was isolated from World markets for both geographical and political reasons and may have been substituting imports due to its isolation, but I am not sure. The so-called Asian miracle was not based on traditional Prebish-Singer industrialisation policy, because it was export-oriented. Being export oriented avoids the ISI disease of protected industries becoming technically and economically obsolete, because the benchmark for success and continued government support is increasing exports.

Today, it is even more difficult because you need to achieve both mass production and flexibility in order to be able to become and remain competitive, finance R&D and market your products to a global audience. It makes little sense to put taxpayer money in subsidising a line of products that may become totally obsolete during the next decade (the life cycle of most final goods, like petrol cars, computers, consumer electronics, has been greatly shortened since the days of Prebish and Singer). It does not mean that industrialisation policy is not possible anymore, but it must take into consideration the global value chain perspective where countries do not aim at producing the entire final product anymore (unless you are China, obviously: this is the objective of their 2025 industrial policy). So, in the end, governemnt support is probably best when focused on the upstream part: education (esp. sciences and technology) and infrastructure, be it hard (roads, ports and telecom) or soft (governance, rules of law, economic stability).

I did not want to say that "it worked" but what the assumed mechanism were: protection of national industries through high tariff walls, which then led that national industries became noncompetitive, ...

companies were able to produce, but technological standards decline, often companies were overstaffed. What Mr Hubert wrote is that they were not able to benefit from economies of scale through export production was not this much an issue for big countries such as India in the first place, but became also a challenge when India wanted to become also an exporter of manufactured products.