Chapter 8: International Economics: Basic Theory and Core Institutions

Summary

Important background information

What do you do?

Pursue a protectionist pathWith tourism and agriculture as the primary economic sectors of Abkhazia, there is very little manufacturing, technology, or other major industries. It is important to develop these industries. If Abkhazia opens itself to the international market, it may become dependent on imports in those industries, which could dramatically slow development. Abkhazia should protect itself from those dangers by establishing barriers to trade and building the domestic economy.
Do nothingTake advantage of world markets. With a strong agriculture sector, you can embrace your comparative advantage and strengthen the economy through trade. This will allow Abkhazia to develop more quickly, and the growing economy will allow Abkhazia to develop other sectors and ultimately seek a strong, diversified economy.