Trade and Inclusive Growth
Keywords:Trade, Inclusive growth, Investment, International integration
This paper attempts to explain the linkages between trade and inclusive growth or long-term sustained growth along with productivity and employment avenues for both households and firms within a country. Kamel (2013) defined Inclusive growth as growth that is accessed and shared equitably by all segments of society. Inclusive growth then may be understood as a holistic concept at once addressing growth, poverty and inequality. This paper explores the linkages between trade, Investment and Inclusive Growth. A country’s level of participation in the regional and global economy and whether or not it is a part of global value chains largely determines impacts on poverty and inequality. This paper attempts to understand and explain the complex relationships which work in transmitting benefits from trade led growth to households. This transmission mechanism is explained through three aspects viz. trade policy related changes, trade facilitation policies and FDI policies. In this process the paper also examines whether South-South trade is better aligned with the needs of developing countries. The paper concludes that International Integration can promote Inclusive Growth when workers and firms are able to select for themselves which activities they want to engage in and when firms can adopt superior foreign technologies and expertise.
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