““The basic reason why poor countries are poor is that they lack the technological capital that rich countries have, which makes output per worker dramatically higher. To get rich, poor countries must therefore undertake a process of “technological catch-up,” in which they acquire technology from rich countries and use it to accelerate the productivity of their own workforce. Exports help this catch-up process in two ways. When a country is poor, foreign technology is expensive and must be paid for in scarce hard currency. Exports (initially of agricultural products, handicrafts, and cheap manufactures) can earn the foreign exchange needed to buy the capital equipment that enables higher-value production.””
