Monday, October 17, 2005

Exports still driving demand in south-east Asia

The Economist, October 13th, 2005
"In search of elusive domestic demand"

The author suggests that exports remain the primary driver of economic growth in south-east Asia, and domestic demand continues to remain stagnant. For example, exports stood at 168% of Singapore's GDP last year. The author seems to believe that for economic growth to be truly sustainable, it must, at least in part, be driven by domestic demand.

Is this a valid assumption? Is the author's belief that international trade is “fickle,” inaccurate? Finally, if international trade is fickle, why might domestic demand not be so?

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