countries, like Taiwan and South Korea, started focusing their development outward, resulting in an export-led growth strategy. Many of the Latin American countries continued with import substitution industrialization, just expanding its scope. Some have pointed out that because of the success of the Asian countries, especially Taiwan and South Korea, export-led growth should be considered the best strategy to promote development. Significance Export-led growth is important for mainly two reasons: The first is that export-led growth improves the country's foreign-currency finances, as well as surpass their debts as long as the facilities and materials for the exports exist. The second, if more debatable reason, is that increased export-growth can trigger greater productivity, thus creating even more exports in a positive, upward spiral cycle. The nomenclature of this concept appears in J.S.L McCombie et al. (1994): yB denotes the relationship between expenditures and income in foreign-currency trade; it marks the balance of payments constraint yA is the growth capacity of the country, which can never be more than the current capacity yC is the current capacity of growth, or how well the country is producing at that moment (i) yB=yA=yC: balance-of-payments equilibrium and full employment (ii) yB=yA<yC: balance-of-payments equilibrium and growing unemployment (iii)yB<yA=yC: increasing balance-of-payments deficit and full employment (iv) yB<yA<yC: increasing balance-of-payments deficit and growing unemployment (v) yB>yA=yC: increasing balance-of-payments surplus and full employment (vi) yB>yA<yC: increasing balance-of-payments surplus and growing unemployment (McCombie 423) Countries with both unemployment and balance-of-payments problems are supposed, according to the dominant economic paradigm, to orient their policies towards export-led growth aiming to achieve either situation (i) or situation (v). Types of exports There are essentially two types of exports used in this context: manufactured goods and raw materials. Manufactured goods are the exports most commonly used to achieve export-led growth. However, many times these industries are competing against industrialized countries' industries, which often have better technology, better educated workers, and more capital to start with. Therefore, this strategy must be well thought out and planned. A country must find a certain export that they can manufacture well, in competition with industrialized industries. Raw materials are another export option. However, this strategy is risky compared to manufactured goods. If the terms of trade shift unfavorably, a country must export more and more of the raw materials to import the same amount of commodities, making the trade profits very difficult to come by. Criticism and counter