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Africa as a BRIC

Shanta Devarajan's picture

My colleague and good friend, Ngozi Okonjo-Iweala, gave an inspiring speech at Harvard where she described Africa as the next BRIC (Brazil, Russia, India and China).  Everything she says in the speech is music to my ears (confession—I provided some background materials to her staff)—that Africa’s growth prospects are strong, that reforms seem to have taken hold—and her idea of African Development Bonds is innovative and worthy of discussion.
 
My only concern is the labeling of Africa as the next BRIC.  First, Africa is not a country, whereas each of the BRICs is.  Africa is 47 countries, some of which are quite small (20 countries have populations less than 5 million).  The distinguishing feature of the BRICs is that they are both middle-income and large.  So it’s not clear how any individual African country can aspire to being a BRIC. Countries such as Malaysia or Chile may be more appropriate models for most African countries.

 

More fundamentally, while they have seen rapid economic growth, each of the BRICs still has significant pockets of poverty (with hundreds of millions of people living in them), such as Western China or the Indian states of Bihar and Uttar Pradesh.  In both China and India, recent growth has been unequalizing, and Brazil until recently had one of the most unequal income distributions in the world.  Meanwhile, recent growth in Africa has been reducing the poverty rate by one percentage point a year—indicating it has been relatively widespread.  In short, Africa should aspire to doing better than the BRICs.
 

Comments

Submitted by Lillian on
How about Botswana, South Africa or Gabon? Wouldn't any of those countires qualify as a BRIC, since they are considered upper middle income countries (according to the Bank http://data.worldbank.org/about/country-classifications/country-and-lending-groups#Lower_middle_income)?

Submitted by Akinradewo Modebitoye Orobola on
World Bank Managing Director DR Ngozi Okonjo-Iweala,SAY THE REAL TRUTH NOTHING BUT THE TRUTH, HER SPEECH AT HARVARD,THAT she described Africa as the next BRIC (Brazil, Russia, India and China),WAS HER GOOD FOCUS AND DREAM THAT AFRICA WOULD SAY BYE TO POVERTY. AFRICA HAVE THE RAW MATERIALS, WE HAVE INTELLECTUALS WHO CAN PERFORM MORE THAN WHAT WE ARE EXPECTING TO BRING OUT GOOD RESULT. IF WE GIVE AFRICA GOOD SUPPORT, AND LET THERE BE A STRATEGIC PLANNING AND GOOD IMPLEMENTATION,AND TRY TO CONTROL SOME INFLUENCES THAT CAN DRAW THE WAGEN OF THE PROGRESS BACKWARD, THEN YOU WILL SEE THAT AFRICA WILL BE AT THE TOP. LET THE FOREIGN INVESTOR TRIED AFRICA, THE CHANCE MUST BE GIVEN AND SEE THE RESULT, THERE MUST BE INCREASE IN PLANTING OF CASH CROPS AND MORE ORIENTATION AND PRATICE OF MECHANIZED FARMING. AFRICA, HAVE GREAT PORTENCIALS, OPPORTUNITIES, AND WEALTH THAT IS NOT EVEN YET TAP OR DISCOVERED, ONE DAY WE SHALL GET THERE AND THERE WOULD BE AN END TO POVERTY.

Submitted by AKINRADEWO MODEBITOYE OROBOLA on
World Bank Managing Director DR Ngozi Okonjo-Iweala,SAID THE REAL TRUTH NOTHING BUT THE TRUTH, HER SPEECH AT HARVARD,THAT she described Africa as the next BRIC (Brazil, Russia, India and China),WAS HER GOOD FOCUS AND DREAM THAT AFRICA WOULD SAY BYE TO POVERTY. AFRICA HAVE THE RAW MATERIALS, WE HAVE INTELLECTUALS WHO CAN PERFORM MORE THAN WHAT WE ARE EXPECTING TO BRING OUT GOOD RESULT. IF WE GIVE AFRICA GOOD SUPPORT, AND LET THERE BE A STRATEGIC PLANNING AND GOOD IMPLEMENTATION,AND TRY TO CONTROL SOME INFLUENCES THAT CAN DRAW THE WAGEN OF THE PROGRESS BACKWARD, THEN YOU WILL SEE THAT AFRICA WILL BE AT THE TOP. LET THE FOREIGN INVESTOR TRIED AFRICA, THE CHANCE MUST BE GIVEN AND SEE THE RESULT, THERE MUST BE INCREASE IN PLANTING OF CASH CROPS AND MORE ORIENTATION AND PRATICE OF MECHANIZED FARMING. AFRICA, HAVE GREAT PORTENCIALS, OPPORTUNITIES, AND WEALTH THAT IS NOT EVEN YET TAP OR DISCOVERED, ONE DAY WE SHALL GET THERE AND THERE WOULD BE AN END TO POVERTY.

Submitted by Samuel Maimbo on
I love the arguement that Africa is the next BRIC!. While Africa is not one country, the comparison (or rather hope) is valid). Brazil, Russia, India and China have shown tremendous economic progress not on the back of uniform or even widespread economic development across all states/regions. The internal income disparities remain. Their growth has been led by a few key champion sectors or regions. Such a strategy is what Africa needs to become a BRIC. Our collective acceptance that some countries on the continent are basket cases and that their long term development rests in the spillover effects of other countries in their region making significant economic gains. Let us stop spreading the limited development resources across 47 countries leaving each with crumbs. Let us be bold enough to pick pick winners and make a meaningful effort for notable economic progress.

Meanwhile, recent growth in Africa has been reducing the poverty rate by one percentage point a year—indicating it has been relatively widespread. In short, Africa should aspire to doing better than the BRICs Shanta Thats a very interesting and quite a powerful point. Why do you think Africa is seemingly better progress at the Bottom of the Pyramid? Aly-Khan Satchu www.rich.co.ke

I enjoyed reading the Harvard speech and also concur with your comments Shanta. My comments: there are shortfalls in aid commitments to Africa for infrastructure development and we need increased efforts towards credible institutional building as a developmental and regional integration pillar. Beyond that I think more could have been said about the role of agricultural development- that is if Africa is to sustain its development into a major global force. I find that the UNCTAD Technology and Innovation Report of 2010 provides some useful recommendations for Africa.

Submitted by Oladiran Ajayi on
I agree with you. I wonder though whether a country like Nigeria is suitably placed to be in the BRIC category?

Submitted by Muyiwa Akinyosoye on
Africa as the new BRIC......? While it’s been noted in many World Bank reports that the key to unlocking Africa’s underdevelopment is through infrastructure development, much remains to be done in the area of financial support. Arguments can swing either way on how this support should be channelled. While some continue to favour aid from richer countries in the form of bilateral and multilateral aid, others are in favour of Africa doing all on their own. Whether one agrees or not, multilateral and bilateral donor aid continues to play a vital role in Africa’s stride towards development. Being able to ascend and even surpass countries that constitute today's BRIC will involve aggressive and innovative investment strategies. Africa has what it takes, the question is, is she willing to grasp opportunities that come her way? Though aid remains one path through which funding can help drive infrastructure growth and development, the amount required for accelerated economic growth remains well in excess of current needs. According to a World Bank report, the private sector has been credited the best medium to bridge the funding gap the continent is currently experiencing. Implicit in the report is the suggestion that private investment should come in the form of Public-Private Partnerships. While there are merits in this argument, a number of risk factors serve as a deterrent to this strategic direction. The private sector will remain reluctant, to a large degree, in investing in regions of the world where there are risk factors well in excess of their managerial ability. Political instability and economic uncertainties rank highest amongst these factors. Without any doubt, private sector involvement is still the way to bridge the gap. Gaining the right level of confidence towards their involvement will require some degree of partnership with multilateral donors, making ‘true’ investments a reality. The support is by no means trivial or simple. It will require ‘thinking-out-of-the-box’ approach involving both conventional and unconventional problem solving tactics. The likes of MIGA providing political insurance may simply not be enough to attract the right level of investment. While external risks continue to remain a major deterrent, there are other risk factors, often overlooked and internal to organizations, multilateral donor agencies including, that pose threats to how investment decisions are taken. Unlike external risks which play a large role with private sector involvement, internal risk factors play a more pivotal role on how investments decisions are taken within organizations. Less likely considered by many or recognized if at all, their impact tend to play a defeating role in strategic outcomes. Related to this will be how partnerships are perceived and administered with private investors towards meeting global poverty reduction programs. Internal and external risk working collectively are termed strategic risks. Risks considered significant enough to undermine an organizations main objective and in some cases, they been known to contribute to an organizations demise. A postgraduate research is currently looking on how these strategic risk elements, comprising both external and internal risk factors, could have any effect on organizations like the World Bank in meeting their primary objective as an entity towards reducing poverty and promoting economic development in emerging countries. Rightly suggested, the path to effective and meaningful economic development is to see a rise in infrastructure development. The most logical way, considering the significant investment involved, is to engage the private sector. Encouraging participation by promoting favourable business climate in host countries is just the beginning. Support from multilateral donors through effective and strategic partnerships will further aid the process, fostering the right level of investment on the continent. On this note, I encourage World Bank, EU and similar multilateral donor agency staff including their contractors with vested interest in Africa’s development to take part in an online survey towards establishing sources of strategic risks affecting multilateral donor agencies. http://www.eSurveysPro.com/Survey.aspx?id=830d22c4-1f15-4ec6-94c4-d6bcfb9ff602

Submitted by AKINRADEWO MODEBITOYE OROBOLA on
I LOVE MY TOWN-"ONDO EKINMOGUN",I LOVE MY NATION "NIGERIA",I LOVE MY CONTINENT "AFRICA", YES AFRICA IS MOVING,IF BRAZIL ,RUSSIA,INDIA, CHINA,e.t.c CAN MOVE FORWARD, WHY WILL AFRICA NOT GOING TO BE THE NEXT BRIC? WE ARE MOVING,AND PROGRESSIVELY CLIMBING THE STEPS OF ECONOMIC DEVELOPMENT.I AGREE WITH MUYIWA AKINYOSOYE, TO UNLOCK AFRICA UNDERDEVELOPMENT MANY FACTORS HAVE TO BE TAKEN INTO CONSIDERATION,MOSTLY INFRASTRUCTURE DEVELOPMENT AND FINANCIAL SUPPORT WITH MULTILATERAL AND BILATERAL DONOR,AIDS HAS TO INVOLVE AGGRESSIVE AND INNOVATIVE INVESTMENT STRATEGIES TO PROMOTE THE OPPORTUNITIES OF ECONOMIC GROWTH AND DEVELOPMENT IN AFRICA IF WE CAN DEVELOP OUR RESOURCES IN AFRICA ECONOMICALLY,THERE WILL BE ECONOMIC INCREASE TO MAKE MEANINGFUL AND POSITIVE ECONOMIC RESULT OR GAIN. THANK YOU.

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