Something like “thou shalt not build a car factory before thou hath a clothing factory” or “thou shalt not cut food import if thou hath not enough farm to feed thyself”.
I know that complete self-sufficiency might not be attainable and/or desirable, but nevertheless what are some do’s and don’ts for country that are trying to become more self sufficient?
byu/Judean_Rat inAskEconomics
Posted by Judean_Rat
5 Comments
dont impose tariffs on machinery that are needed to become a self-sufficient economy (eg-electronic components for a car factory)
Self-sufficiency is not a desirable goal.
Once a country has chosen any degree of self-sufficiency, they have already chosen a self-defeating goal. So the only advice is stop.
It’s like asking a doctor, “I am deliberately eating extra saturated fat to give myself heart disease. But I want to be healthy, so please offer me dietary advice for better health.”
Choosing economic self-sufficiency is like choosing heart disease.
For most countries, it isn’t really possible at current standards of living. The first thing to look at is resources: water, energy, food production ability
Marginal move towards self-sufficiency is increasing domestic control of strategic assets (resources) and having strong value-add domestic manufacturing supply chains. Or control a critical part of critical global supply chains (this could also include geography and trade routes).
Main one that comes to mind is the Dutch Disease: countries that rely on a natural resource to trade may find they under invest in other industries. This also causes currency appreciation if they export and that causes other domestic industries to suffer in terms of exports.
The problem here is that “more self sufficient” is not really a clear goal. It’s more a *tool* to achieve some other goal.
There must be a reason *why* people think that more self-sufficiency is a good idea. That other goal may be wise or may be foolish, or it may be good for some groups and bad for others. That’s another important question.