Industrial policies in the context of disputed or occupied territories

Abstract

Over the past centuries industrialization has played a relevant role in the development of nations, especially through its contribution to economic growth and, thus, to raising the standards of living. However, industrial development and how it can be influenced by government decisions has been largely ignored in the context of disputed or occupied territories with a problem of sovereignty recognition. This paper aims to contribute to overcoming this gap, through a methodological approach based on a comparative analysis of the industrial policies conducted in four case studies, namely, the experiences of Northern Cyprus, Taiwan, Tibet, and the West Bank (Palestine). This comparative approach intends to explore the lessons we can take from these diverse experiences. On the one hand, from territories that have achieved a significant degree of success in terms of industrial policies, despite suffering on-going disputes, contributing to their evolution from developing to developed territories. On the other hand, from territories where the disputes are more severe, raising several obstacles to their industrial development, and whose effects it is important to debate and discuss. Our study finds that, in disputed or occupied territories, there are some specificities and similarities among the factors that play a significant role in the success/failure of their industrial policies to achieve broader development goals. These seem to be: the level of political stability and autonomy of the local government in defining and pursuing their development goals; the influence of past and current occupations and their strategic orientation (more segregationist or more integrated ones); the protectionist orientation especially during the first stages of industrialization; the ability to attract foreign investment as a means to transfer innovation and technology to the local economy; and the level of openness of the local economy, conjugated with the ability to increase local industrial productivity and competitiveness and thus to increase exports.