Growth Options for Zimbabwe
UNIVERSITY OF ZIMBABWE
GRADUATE SCHOOL OF MANAGEMENT
MASTERS IN BUSINESS ADMINISTRATION
Group 10
Bright Chidyagwai R074349A
Raymond Mharapara R074352B
Sarathiel Chaipa R901942L
Lovemore Muronda R074359Q
Lovemore Hakuna R0019347
Fanuel Sigodho R9913490
Course: Business and Its Environment
Course Code: MBA 504
Lecturer: Mr. M. Kwaramba
Due Date: 02 December 2007
QUESTION: Zimbabwe’s comparative advantage is restricted largely to resource-based activities. What are the advantages of such a situation and what scope is there for shifting into another growth path?
Introduction
Zimbabwe is richly endowed with several different types of resources, such as gold, platinum, nickel, tin, copper, trees for timber, water bodies etc. This gives the country a comparative advantage, which is largely resource-based. The theory of comparative advantage states that, a country should export products it can produce at a lower comparative cost than those with whom it trades with (Samuelson & Nordhaus, 1988:689). Zimbabwe, for some years, was the bread-basket of southern Africa, relying more on agricultural products for trade within the Southern Africa Development Community (SADC). The country has been week regarding exports on manufactured products.
Comparative advantage, generally would dictates the industrial policy of a country, unless there are strong reasons not to. We define industrialisation as the process of building a country’s capacity to process raw materials and to manufacture goods for consumption or further production. There are five determinants of industrialisation namely: • Size of as country: The size of a country refers to the population size together with the spatial distribution of the country. Countries with high population and high per capita incomes would industrialise faster than small ones. • Geography: This refers to the resource endowment of a country and how it is located.
GRADUATE SCHOOL OF MANAGEMENT
MASTERS IN BUSINESS ADMINISTRATION
Group 10
Bright Chidyagwai R074349A
Raymond Mharapara R074352B
Sarathiel Chaipa R901942L
Lovemore Muronda R074359Q
Lovemore Hakuna R0019347
Fanuel Sigodho R9913490
Course: Business and Its Environment
Course Code: MBA 504
Lecturer: Mr. M. Kwaramba
Due Date: 02 December 2007
QUESTION: Zimbabwe’s comparative advantage is restricted largely to resource-based activities. What are the advantages of such a situation and what scope is there for shifting into another growth path?
Introduction
Zimbabwe is richly endowed with several different types of resources, such as gold, platinum, nickel, tin, copper, trees for timber, water bodies etc. This gives the country a comparative advantage, which is largely resource-based. The theory of comparative advantage states that, a country should export products it can produce at a lower comparative cost than those with whom it trades with (Samuelson & Nordhaus, 1988:689). Zimbabwe, for some years, was the bread-basket of southern Africa, relying more on agricultural products for trade within the Southern Africa Development Community (SADC). The country has been week regarding exports on manufactured products.
Comparative advantage, generally would dictates the industrial policy of a country, unless there are strong reasons not to. We define industrialisation as the process of building a country’s capacity to process raw materials and to manufacture goods for consumption or further production. There are five determinants of industrialisation namely: • Size of as country: The size of a country refers to the population size together with the spatial distribution of the country. Countries with high population and high per capita incomes would industrialise faster than small ones. • Geography: This refers to the resource endowment of a country and how it is located.
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