Some Thoughts of the Dilemmas Regarding the Influence of Foreign Trade of the Economic Development of Less Economically Advanced Countries

Abstract

Modern international trade is developing faster than global production, which affects the economic development of countries. The benefits of participation in the international division of labour, however, are significantly higher in developed countries than in developing countries. Less economically advanced countries which specialise in the production and export of raw materials are subjected to particularly high volatility in export earnings as well as adverse terms of trade over the long term. Thus, the foreign trade of those countries, given the petrification of their economic structure, cannot exert such a favourable influence on their economic development as it does in the case of developed economies. In this article the author considers in general terms the role of trade liberalisation which is being implemented in developing countries as part of their development strategy. The conclusions formulated in this paper indicate the necessity of moving away from the uniform and universal principles of a development policy designed for a whole group of these countries and instead taking into account their individual stages of development and their specific economic situation. The findings also point to the need for accepting the adequacy of the principles of dynamic comparative advantage in shaping the outlook of their economic structures.