The economics of modern process technology in low-wage countries

Abstract

In recent years the assumption that conventional, capital-intensive process equipment is necessarily the optimal choice in developing countries has been under ever-increasing attack. This paper presents the results of an economic evaluation, carried out at the sub-process level, of a number of alternative technologies for sugar production. The disaggregated analysis suggests that for this industry, and, probably, for cognate industries also, the contention that labour-intensive technologies should be preferred in low-wage countries cannot be sustained.