Rostow's Stages Of Economic Growth

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I. Rostow’s Theory Professor W.W. Rostow an American Economic Historian published his narrative or model as referred by various other economists, namely ‘Rostow’s stages of economic growth’ in 1960. He confined his ideas on the ideology of capitalism and described them as a Non- Communist Manifesto. Looking linearly into history, Rostow segments the entire process of progress in his narrative. The graph below shows the stages of growth as described by Rostow: He looks at growth as a linear process where every economy lies somewhere on the linear curve and then gradually progresses. Rostow states that growth is not a function of economic indicators but also various social and institutional factors. The following are the stages with the essential…show more content…
A rush at this stage would lead to Liebenstein shock. At this stage productive investments flow into the economy leading to radical changes in 3 non- industrial sectors, namely, agriculture (increase in productivity), expansion of social overhead capital (development of means of communication) and expansion of foreign trade ( for sustaining the growth). This stage is documented by easy availablity of credit, moving towards apt fiscal and monetary policies and an increase in aggregate demand. A transition is seen interms of undertaking expenditure to provide an impetus to various sectors which would develop multipliers in the economy, from which the super multiplier would emerge and not on grandeur and warfare. STAGE 3 : Takeoff. The two stages, 2 and 3, are not mutually exclusive. Stage 3 is a deliverable of stage 2. This stage is the time when the economy witnesses the ‘ Big Push’ as suggested by Rodan. The new production functions are now developed. Lead sectors emerge due to increase in demand, enhanced productivity, induced investments and expansion of output in other sectors dur to technological advancements. Rostow suggests 3 conditions for making the process self-…show more content…
India is a big importer of Burmese commodities. The construction of the Indo-Myanmar Friendship Road, by the Indian Army , has proved to be major strategic and commercial transportation route. This has opened the gates to south east Asia for the Indian economy. Unlike India, Myanmar has had a hot-cold relationship with China. Recently, China has had conflicts in the Kongang region of Myanmar, the main reason being unclear. 1% or less of China’s total trade accounts with that of Burma. Relations between Myanmar and Thailand mainly focus on economic issues and trade. Settlement of aligned border is a problem faced by the two economies. Labour trafficking across the two borders is common since the past few decades. After the crackdown of the Thai government early this year, it has become difficult for smugglers to function in the Bay of Bengal. There is a lot of migration between the Burmese and the Bangladeshi borders. However international realtions between the two neighbours are calm in nature. Bounds between Russia and Myanmar are diplomatic since independence and strenghtened after the fall of the Soviet Union. Russia along with China, has helped ease the pressure of UN on Burma. In 2007, Myanmar and Russia signed a nuclear deal to enhance Burmese military power. Myanmar is a part of ASEAN, but its presence wasn’t much appreciated because of

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