for

The Basis Sound Industrial Development

of
severe fluctuations both supply and demand Consequently the unit

.
for
prices the exports vary widely from year year The physical volume

to

.
the product available for export
of

Auctuates considerably the

if
also

agricultural crops vary one year

to
because another With
is

,
item from

.
the
and price variations foreign

of
the combination crop fluctuations

,
of
exchange earnings country overly dependent such exports and

on

,
a
consequently are subject extreme instability

to
national income
its

A
.
United Nations analysis has shown that from 1901 1950 the average year

,
–
year variations foreign yield major crops ex

per of
exchange eighteen
in
to
-

, by

ported underdeveloped

23
cent

to
countries was addition added

In
."
stability industrialization which enables the country make products

to
be

competitively export markets usually brings about larger

to

sold
in

total foreign exchange earnings and resulting national income

.of
Industrialization which permits the economic production goods for
imported has equally good
be

an
domestic use which would otherwise
stabilizing effect such local manufacturing

on
reduces demands the coun
—

try foreign exchange resources exports the

of

time earnings from

In

low

,
.
's

the

can

consumption having

of be
of

of

items continue instead curtailed

to

.
Moreover domestic production this kind like any creation
of

additional
,

,
an

wealth itself addition the national income

to
in
,
is

While industrialization should bring about greater economic stability

,
-by

bring
If be

product
of
this desirable effect should generally regarded
as
a

ing about larger national income the industrial development which

a

.
be the

the

of

not meet
its
takes place does basic national income test value
,
-

stabilizing benefits should weighed against their cost the economy

to

.
be
of

Employment the unemployed partially employed can another

or

sound reason for industrialization under certain conditions These condi

.

tions are that the unemployed people could more productively

be

not used
agriculture some other activity and that the particular
or

industrial
in

,
be

projects which they could employed are sound enough make net
to
in

a
, to

The provision
of

contribution the national income markets for local

.

agricultural mineral products

or

or
as

raw materials such timber which

,
or
be

otherwise would largely completely wasted may constitute another

,
for

sound reason industrialization again provided that the projects can

—
of

of

pass the test being net value the national economy Unused re
to

Instability Export Markets Underdeveloped De

of

Countries United Nations

in

,
5

partment
of

Economic Affairs New York 1952

,