Answer to Question #192988 in Microeconomics for chikzo

Question

should local industries in South be protected against world competition

Answer 1

Economic interdependence and globalization have resulted in a framework in which each country's economic survival is increasingly dependent on that of other countries (though to varying degrees).

 As a consequence, contradictory or offensive protective policies between countries pose a significant national security danger. Indeed, trade sanctions are often used as a direct instrument of war and conflict. This emphasizes a crucial protectionist point about the very real danger of economic dependence on other countries.

Trade liberalization policies dating back to the 1990s have had a major impact on South Africa's manufacturing sector. 

These were commonly used at the time as a way of boosting national economies in developing countries that were hampered by high input costs and depressed local markets. 

Open markets, it was claimed, would help generate employment, increase efficiency and competitiveness, and, as a result, increase economic growth.

Protecting the local industries will also increase the employment level and helps to eradicate poverty in the domestic country and also bring stability to the economy.