immiserizing growth


Also found in: Wikipedia.

immiserizing growth

a situation in which a DEVELOPING COUNTRY's attempt to increase its growth potential through EXPORTS actually results in a retardation of that potential. This is very much an exceptional situation confined only in theory to a country whose export speciality (some mineral or agricultural crop) accounts for a preponderant share of world trade in the product. The country needs to export more to earn the foreign exchange to finance the capital imports that it requires to underpin domestic growth. If all its export effort is concentrated on its speciality, this could lead to an ‘oversupply’ of the product, resulting in a deterioration of the country's TERMS OF TRADE. As a result, the country's foreign exchange earnings will now buy fewer imports, and domestic growth potential will be impaired. See ECONOMIC DEVELOPMENT.