This paper begins by giving a historical background of Suntwestan. Thereafter, examines the industrialization experiences of East Asian economies which will be used as a guide to Suntwestan’s industrialization trajectory. This newly upgraded lower middle income country was a typical Low Income Country for a long time, but the last twenty years has seen this small country making great strides in development with Gross Domestic Product growth rates averaging at 7.2 % per annum, with stable exchange and inflation rates. The political environment has also been quite peaceful attracting foreign investors, especially in the mining sector.
Despite the high scores of development and the numerous Foreign Investments coming into Suntwestan, the country’s Human Development Index remains to be among the lowest in the world with high levels of poverty and unemployment among its citizens. Suntwestan is characterized by high income inequality, poor health care and inadequate education delivery. In addition the productivity of its citizens remains low because of low education standards, poor health of workers and lack of investment in physical capital as well as lack of access to technology.
Furthermore, population and dependence burdens remain very high with an annual crude birth rate of about 50 births per thousand of the population. Consequently, the majority of the population falls under 15 years. This means that the working age population is greatly affected because the majority of citizens are below working age. Other factors worth noting are the prevalence of imperfect markets and limited information in Suntwestan. The lack of accurate information system for both producers and consumers in this country lead to imperfect information, misallocation of resources and misinformed purchasing decisions. That is to say, this country lacks factors that would enable its markets to work efficiently. For example, Sutwestan lacks a functioning banking system which...