Exports don't have to be manufactures

There’s a line of thought in developmental economics that a country must do manufacturing, must export manufactures, in order to be come rich. That there aren’t sectors in which a currently poor country can do so means that poor countries never can become rich.

Yes, that’s a rather extreme characterisation of the argument but it really is one that’s out there.

We insist that this is not true. It’s might well be helpful, probably will work - industrialisation and manufactures exports that is - but it’s the insistence that it’s necessary we disagree with:

Freshii is coming under fire for outsourcing virtual cashier jobs to Nicaraguans paying $3.75 per hour.

The restaurant chain replaced some of its in-store cashiers in Ontario with workers in Central America who run the cash through a video link, as reported by The Toronto Star. Some of these workers are reportedly being paid less than the price of the food chain's dishes.

Manufactures might be a good way to bundle up the embedded labour so as to export it. But anything that adds value to labour, over and above that in the domestic economy, and is able to export it does exactly the same job. It adds value to domestic labour and exports that value.

That is, manufacturing isn’t a necessary part of the development process at all. We’d even put down a claim, a marker - soon enough there will be entire economies that develop purely by producing and exporting services.

Adding value is development, whatever adds value is development.