Bhutan

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1) What is a primary-export-led development strategy? This is a growth/development strategy which is undertaken mainly by less-developed countries. It concentrates in producing primary products in order to export them to other countries. Less-developed countries are more appealed to this strategy as it does not require skilled labour and they have a comparative advantage in it due to its nature. As for the goods which they need for development but don’t have a comparative advantage in, they import it from other countries using the finance gained from the exports. 2) If the United States is relatively abundant in skilled labour (H) and Bhutan is relatively abundant in unskilled labour (L), which good will Bhutan export and which will it import? Why? Based on the Hecksher-Ohlin model which states ‘a country has a comparative advantage in producing goods that require as an input a factor the country possess in abundance’. Bhutan will export cotton and import computers from the United States. This is in accordance with the H-O model since Bhutan is abundant in an input factor of cotton...

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