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Shanta Devarajan's blog

Right analysis, wrong conclusion?

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During my recent seminar in Geneva, where I was also meeting with the Africa Progress Panel, a couple of members of the audience (which consisted of ambassadors, U.N. staff, civil society and academics) said, “I liked your analysis, but not your conclusions.” 

The seminar summarized many of the points I have been making on this blog:

  • For the decade before 2008, Africa was experiencing sustained and widespread economic growth, thanks to aid, debt relief, private capital flows, high primary commodity prices, and improved macroeconomic policies
  • Despite being the least integrated region, Africa was perhaps the worst hit by the global crisis
  • Contrary to some people’s fears, African governments continued to pursue prudent economic policies during the crisis—even though the visible payoffs to these policies (growth and poverty reduction) had suddenly diminished
  • Conclusion:  Economic policy in Africa, which had been improving before the crisis, and either stayed on course or improved during the crisis, has never been better.

    Since my conclusion followed directly from the analysis, I had three possible explanations for the reaction mentioned above:

L’UEMOA à Quinze Ans

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Mon ami, l’économiste togolais Kako Nubukpo, avec qui j’ai eu l’occasion de débattre lors d’un de mes voyages à Lomé, a fait part de son analyse sur le bilan des quinze années d’existence de l’Union économique et monétaire ouest-africaine (UEMOA) lors d’un entretien pour le site Ouestaf.com.

D’après lui, même si l’Union est parvenue à gérer l’équilibre macroéconomique et budgétaire entre les États membres, la combinaison d’une monnaie forte (du fait de la parité fixe entre le franc CFA et l’euro) avec ce qu’il appelle « la gouvernance macroéconomique » restreint la compétitivité et donc la diversification et la croissance économique des pays membres.

Ces commentaires émanant d’un économiste qui est actuellement consultant auprès de l’UEMOA relanceront peut-être le débat sur les performances et les options économiques des pays d’Afrique francophone.

Teachers and politics

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One of the reasons why schoolchildren in low-income countries, despite being in school most of the time, seem to be learning very little is that the teacher is often not there. In Uganda, for instance, the teacher absence rate in public primary schools was estimated at 27 percent. 

Are African women having too many babies?

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Twenty-five of the 28 high-fertility (more than 5 children per woman) countries are in Africa. This and related facts have revived the concern that Africa will miss out on the “demographic dividend” –the rapid economic growth rates associated with declining fertility, as experienced by many countries in Asia. But Africa is also the continent with the slowest economic growth in the past. And, as The Economist (and others) pointed out, economic growth is probably the best contraceptive. 

The three most important challenges and opportunities for the decade ahead

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 1. Jobs

Throughout the developing world, productive-employment-intensive growth remains a challenge. In Africa, it is almost a crisis, with most of the labor force working in low-productivity, informal-sector jobs, and 7-10 million young people entering the labor force every year. That the unemployment rate in South Africa—the continent’s largest economy—has remained around 25 percent is particularly troubling.

My top three and Bono's top ten

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For the World Bank's internal website, I was asked to list the three most important developments of the past decade.  To elicit a broader discussion, I am sharing it on this blog.  In a subsequent post, I will list the three most important challenges and opportunities for the coming decade.  One or two of my items are also reflected in Bono's excellent piece in yesterday's New York Times, "Ten for the Next Ten."  Here are my top three:

Peace and War in South Sudan

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An article in Saturday’s New York Times entitled “Violence Grips South Sudan as Vote Nears” reminded me of a 2008 research paper by Ibrahim Elbadawi, Gary Milante and Constantino Pischadda which models the relationship between Juba and Khartoum as a “game” leading up to the referendum in 2011. 

Climate Change as a Development Opportunity

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There is considerable evidence that Africa is the continent that will be hit the first, most and worst by climate change. 

Agricultural productivity, already among the world’s lowest, could in several African countries fall by 50 percent in 10 years because of higher and more variable temperatures, which in turn could lead to faster desertification, rising sea levels, and more frequent droughts, floods and typhoons. 

Domestic demand, net exports and Africa’s growth

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At the recent Africa Economic Conference, UN under-secretary general and executive secretary of UNECA, Abdoulie Janneh, said "[Africa’s] previous growth, while benefiting from improved macroeconomic management, was largely dependent on commodity exports and resources flows from outside the continent." 

Aid and Corruption

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Many of the objections to my blog post, “Another reason why aid to Africa must increase”  centered around corruption.  “I disagree.  Africa needs to get rid of corruption…” said one commentator, while another said, “Aid to African countries must follow country steps in good governance, democracy, fighting corruption, etc.”

I think we can agree on the following two facts:

 

But even with these two facts, it doesn’t necessarily follow that aid should be cut off from countries with high corruption. 

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