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Africa

Friday Roundup: Economically shrinking G7, Africa's youth, Chinese labor, Sandy's costs, and Industrial Policy

LTD Editors's picture

This week a new forecast and analysis from the OECD highlights how, by around 2025, China's and india's combined GDP will likely exceed that of all the current Group of 7 rich economies. Read it here.

Mo Ibrahim, entrepreneur and billionaire, talks in a video clip about how the promise and risks inherent Africa's demographic bulge require bringing youth to the table when discussing not just jobs, training and places in top schools, but they should also be in on governance discussions.

Market Access: A Key Determinant of Economic Development in Sub-Saharan Africa

Harry Garretsen's picture

Sub-Saharan Africa (SSA) is home to the world’s poorest countries. The region’s geographical disadvantages are often viewed as an important deterrent to its economic development. A country’s geography directly affects economic development through its effect on disease burden, agricultural productivity or the availability of natural resources. However, the new economic geography (NEG) literature, initiated by Krugman (1991), highlights another mechanism through which geography affects prosperity.

Africa means never saying goodbye

Justin Yifu Lin's picture

I visited three African countries – Ethiopia, Rwanda, and South Africa– during my first week as Chief Economist at the World Bank in June 2008. Many visits to other African countries followed, but Ethiopia holds for me a special interest. I’ve just visited again, for a fourth time. While I am sure I will go back again after I depart the Bank on June 1 this year, this was my final visit to Africa as Chief Economist.

Over four years, I’ve seen Ethiopia gradually embrace structural transformation and its practical application. Leaders there are acutely aware that, if they are to maintain a robust growth rate (GDP growth has been around 10.5% on average over the past few years), they must move away from agriculture, the dominant sector, toward industrial upgrading and technological innovation, often by imitating economies just a few rungs up the economic ladder.  Ethiopia’s agriculture sector is important and should not be neglected, but that alone won’t get the country onto a path toward middle income and finally to high income status.

Do Informed Citizens Receive More, or Pay More?

Philip Keefer's picture

One widely-accepted political economy research finding is that informed citizens receive greater benefits from government transfer programs. The evidence for the impact of information comes from particular contexts—disaster relief in India and welfare payments in the USA during the Great Depression.  Do other contexts yield similar results?  New research on the distribution of anti-malaria bed nets in Benin suggests:  “No.”  Instead, local health officials charged more informed households for bed nets that they could have given them for free.

The Benin context differs in three ways.  First, the policy is not the distribution of cash, but of health benefits.  Households’ access to information then influences not only their knowledge of government programs to distribute such benefits, but also the value they place on them. 

Second, the political context also differs.  In younger democracies, like Benin’s, citizens are more likely to confront additional obstacles, besides a lack of information, in their efforts to extract promised benefits from government.

Is 2012 Africa’s Year of the Dragon?

John Wilson's picture

At the 2012 World Economic Forum’s Annual Meeting in Davos last week, a record 2,600 global leaders discussed a frenetic mix of economic and social issues facing the global community. A number of panels (some of which were overlooked with all the talk of the unfolding Eurocrisis) focused on the important transition Africa is making from an underdeveloped continent to one characterized by sustained growth -- backed by strong trade and investment flows. 

Leaders discussed the need for greater market integration to increase intra-African trade and better cooperation on infrastructure to facilitate investment and trade. Alpha Condé, President of Guinea, called for the establishment of Pan-African ministries to drive greater integration and coordination on the continent. “At the next African union meeting, we must consider establishing three of four ministers for all of Africa,” he said. “These new posts should at least cover energy, infrastructure, and trade in Africa.”

The Nuts and Bolts of Trade: Stepping up to Manufacturing in the Development Ladder

John Wilson's picture

With the global recovery slow to pick up speed, the latest World Economic Outlook (WEO) isn’t exactly an uplifting read. However, for those of us with an eye on the developing world there are some bright spots: the low-income-countries (LICs) in Africa, for example, have returned to their pre-crisis growth rates and their economies are expected to expand by a respectable 6.5 percent in 2012. 

Despite this seemingly good news, there are some dark clouds on the horizon. The WEO attributes the quick rebound to the fact that the African LICs were, “largely shielded from the global financial crisis owing to their limited integration into global manufacturing and financial networks.”  Although limited international exposure is a boon in the short-term, it also signals trouble down the road.

In Nigeria, One Size Doesn’t Fit All

Volker Treichel's picture

I blogged a few months ago about a paper Justin Lin and I were writing that focused on applying  the Growth Identification and Facilitation Framework in Nigeria.  The paper has just recently been completed and is now available online.

In the meantime, attacks on the UN house in Abuja have highlighted the extreme social tensions experienced by Nigeria. Many of these tensions may be related to the country’s persistent poverty. In fact, notwithstanding high and sustained growth over the past decade, Nigeria’s job creation has barely kept up with the relentless growth of its workforce, and youth unemployment has further risen.  Moreover, formal sector employment has fallen, as a result of privatization and civil service retrenchment, while employment in informal family agriculture has increased. 

Nigeria urgently needs to increase employment intensity and sustainability of its growth performance, and our paper can be a useful tool for developing a strategy to do so. 

What's special about open data in Kenya?

Tariq Khokhar's picture

On July 8th 2011, President Mwai Kibaki launched the Kenyan Open Data Initiative, making key government data freely available to the public through a single online portal. The 2009 census, national and regional expenditure, and information on key public services are some of the first datasets to be released. Tools and applications have already been built to take this data and make it more useful than it originally was.

This is, so far, the story of open government data in many other countries; what's special about Kenya?

Open Data Is Not Enough

Raka Banerjee's picture

Since its inception, the World Bank’s Open Data initiative has generated considerable excitement and discussion on the possibilities that it holds for democratizing development economics as well as for democratizing the way that development itself is conducted around the world.  Robert Zoellick, in a speech given last year at Georgetown University, expounded on the many benefits resulting directly from open data.  Offering the example of a health care worker in a village, he spoke of her newfound ability to “see which schools have feeding programs . . . access 20 years of data on infant mortality for her country . . . and mobilize the community to demand better or more targeted health programs.”  Beyond this, Zoellick argued that open data means open research, resulting in “more hands and minds to confront theory with evidence on major policy issues.”

The New York Times featured the Bank’s Open Data initiative in an article published earlier this month, in which it referred to the released data as “highly valuable”, saying that “whatever its accuracy or biases, this data essentially defines the economic reality of billions of people and is used in making policies and decisions that have an enormous impact on their lives.”  The far-reaching policymaking consequences of the data are undeniable, but the New York Times touches upon a crucial question that has been overshadowed by the current push for transparency: what about quality? 

What Industrial Policy?

Keijiro Otsuka's picture

Recently, economists began proposing the strategy for industrial development in low-income countries.  But there are few explicit recommendations as to what role governments should play in fostering industrialization.  Related question is whether we can draw useful lessons from successful experience of industrial development in East Asia for other regions, such as sub-Saharan Africa (SSA).

The paper entitled “A Cluster-Based Industrial Development Policy for Low-Income Countries” (Policy Research Working Paper 5703) proposes an industrial policy consisting of four pillars of recommendations based on roughly 20 case studies of industrial clusters in Asia and sub-Saharan Africa.

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