Asia & Africa do trade

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Dani Rodrik compares the relationship between currency undervaluation and growth of economies in Asia and Africa:

In Asia, growth is typically engineered by increasing the profitability in manufacturing and other tradables. But in Africa the typical growth spurt is preceded by aid inflows and other transfers, which appreciate the exchange rate, and render future growth less sustainable. This is the so-called Dutch disease.

An IMF magazine advices Africa on how to seize the opportunity for long-term economic growth through a continuing rise in the South-South exports. To grow sustainably, Africa will need to engage in greater value-added production and move away from the short-term benefits of a boom in exports of natural resources.


Currently, manufactured products account for only 20 percent of Africa's total exports, while 80 percent of sub-Saharan Africa imports from Asia are manufactured goods.

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