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Seeds for Higher Growth in Rwanda

Birgit Hansl's picture

Rwanda’s economy is growing at a healthy rate--7.5 percent in 2010, two percent higher than the East African Community (EAC) and even more than Sub Saharan Africa (SSA).

During 2010, the services and industrial sectors progressed in their recovery, while growth in the agricultural sector slowed down marginally.  The country’s macroeconomic framework was remarkably stable, given the difficult external post-crisis environment and Rwanda’s position as a highly import-dependent, land-locked country. This was mainly achieved through a prudent fiscal stance with strong focus on priority expenditures, assisted by continued grant financing from donors.

Africa on the brink of a take off

Shanta Devarajan's picture

Dear friends,

Today we are trying something new.

I wanted to share with you the reasons why I think we can be optimistic about Africa's development prospects, but rather than writing something up, I thought of using video.

Please, share your feedback, not only on whether you agree that Africa is on the right track, but on the video itself. If you like it, I would like to do more of this short video "Development Talks" with the readers of this blog.

Let me know what you think.

 

Commodity prices and African economies

Shanta Devarajan's picture

Once again, commodity prices are on the rise

Unlike in 2008, when oil importers and exporters experienced symmetric shocks (one negative, the other positive), this time it appears as if both oil exporters and some oil importers in Africa are experiencing positive shocks. 

The reason is probably that, along with oil prices, other minerals such as gold and copper, cotton, and cocoa prices are also up—so even an oil importer may have on net a favorable terms of trade shock.  In addition, although some world food prices are rising, most food is domestically produced and not traded, so the negative effect of that may also be muted.  Of course, the situation may change if oil prices rise even further.

The following summary table, taken from the complete data set prepared by my colleague Cristina Savescu, gives the ten countries with the biggest positive and negative terms of trade shocks between December 2009 and December 2010, as a share of 2009 GDP.  

Terms of trade change December 2009-December 2010 as a percent of 2009 GDP:

Seven steps to structural transformation

Shanta Devarajan's picture

 

 

 

 

 

 

 

 

 

 

 

 

 

My colleagues Justin Lin and Celestin Monga have proposed a six-step plan for identifying industries that could help developing countries industrialize. 

The first step in the plan is to find countries that have a per-capita income that is roughly double yours and have a similar endowment, and observe what they are producing.  These industries would then serve as the basis for possible government intervention to either protect or create, depending on the country’s situation.

However, the six-step plan seems to gloss over the fact that countries, even seemingly successful ones, produce certain goods for political rather than economic reasons. 

Les leçons tirées de l'intégration européenne sont-elles pertinentes pour l'Afrique?

Dirk Reinermann's picture

Read this post In English

Alors que j’ai récemment quitté l'Afrique du Sud pour m’installer en Belgique, une question s’impose à moi : l’Union européenne et ses six décennies d'intégration constituent-ils un exemple pertinent pour l'Afrique ? Ou alors est-ce comme comparer des pommes avec des mangues ?

Delivering Aid Differently – The New Reality of Aid

Wolfgang Fengler's picture

This month Homi Kharas and I published a book titled “Delivering Aid Differently – Lessons from the Field”. We launched the book yesterday at the University of Nairobi.  Here is a summary of the main messages:

We live in a new reality of aid. Rich countries delivered US$ 3.2 trillion of aid to poor countries between 1960 and 2008, and it is a US$ 200 billion dollar industry today. Despite disputes and convulsions, the core of the aid industry has changed little over the past few decades. Now the new pressures on the aid systems may be too strong to resist fundamental change.

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