shifted from the interchange between the industrial countriesand the primary producing
areas to increasing trade between the hig hly ind ustria lizoo nat ions themselves.
30
The areas of recent settlement have found that, generally speaking, the exportsof
primary materials no longer provide the stimulus for rapid economic growth. The new
technology economises on raw materials and in some cases has substituted industrial
inputs for natural raw materials. No longer does advanced technology automatically
transfer to the periphery as part of the trading process. The comparative advantage lies
with the industrial countries which
have
the reservoirs of scientific and technical know
how: If there is a resource, such as petroleum, useful to the industrial countries, which is
avaílable for exploitation in a peripheral area, then the technology will almost certainly
transfer to that area.
The industrial technology which the regionsof recent settlement now want in order
to develop their import substitution industrialization programmes is not attracted by the
normal processes of trade. The new industrial technology has to be bargained for by
governrnents. The regions of recent settlement, either because of market limitations or
defiéiencies in the modern industrial infrastructure suffer a comparative d isadvantage
which can only be offset by protection for domestic industry against foreign competition.
The technology, whether controllEd by foreign governments or multinational companies
can be oought, but only at a price.
Part of the price of protecting a relatively small or inefficient industrial sector isthe
imposing of a high cost structure on the export sector. There is a danger that the export
sector may be caught
in
a cost/price squeeze, especially if the terms of trade are
moving
against the export 'sector. As one of the costs of forcing the growth of the industrial
sector lies in the servicing of foreign loans, repatriation of dividends, etc. there can be
severe
balance of payments problems unless the export sector can continue to earn the
required surplus in spite of increasing costs resulting from the protection of the industrial–
sector. Unless there is a favourable
movement
in export prices, the only way in which the
industrialization programme can be sustained is through increasing the productivity of the
export sector. This requires technological
advances
in the industries constituting the
export sector. This I think is the rnost important difference between the recent
perfomance of the Australian and Argentina economics. Whereas in Australia the
productivity of the export sector has risen sufticiently to absorb the cost of employing the
new industrial techno logy , Argentina imposed those extra costs without first achieving
the science based technological revolution in the rural sector.
30
Alfred Maizels. Growth and Trade (Cambridge University Press. Cambridge,
1970).
Chapo 4.
188
