The flying geese paradigm

The Flying Geese Paradigm (FGP) is the graphic presentation of the three time series curves of import, production and export of a product. It is a dynamic situation in which a follower, in pursuit of development, emulates the industries of advanced economies in a manner compatible with its own factor and technological endowments at a given specific time.

In simple terms, it means that an underdeveloped country starts to import foreign goods. Over time, the entrepreneurs in the country understand the function and benefits of making the product themselves. They set up plants to manufacture the product either on their own or in collaboration with foreigners. This undertaking is called import-substitution production. As the production process gets more familiar and streamlined, the output is increased. Also, more investment is made to set up more plants. Beyond the domestic consumption threshold, the output is exported, thereby making foreign exchange for the country. This whole cycle of evolution is known as the FGP.

The FGP doesn’t seem to work in this country especially in the case of Proton. After 27 years of operation, they are still unable to come up with their own product. What they are doing is literally rebadging foreign made cars. This means they are still stuck in the first phase of importing cars. Exporting their own cars remains a pipe dream.