26 March 2014
Africa is growing, with The Economist noting that 6 out of 10 of the world's fastest growing economies for 2000-10 were in Africa. But how optimistic should we be? UNU-WIDER's new research priorities for 2014-18 are transformation, inclusion, and sustainability. All three played important roles in the conference 'Inclusive Growth in Africa', 20-21 September 2013, held in Helsinki.
Can Africa follow Asia in structural transformation?
Can African economies replicate, or even find an African 'echo', of the kind of structural transformation which paved the way for East Asia's emergence from poverty? Africa's failure to move large numbers of people out of low-productivity occupations into more productive areas for the economy--in particular from subsistence agriculture into manufacturing--has been identified by many as the root of the problem. The keynote speaker at the conference, Erik Thorbecke, described African conditions pre-2000 as a 'migration of misery' with workers pushed out of agriculture, rather than being pulled to more productive non-agricultural employment.
Now sub-Saharan Africa (SSA) conforms to a more normal structural transformation pattern, Thornbecke concluded as a result of updating the World Development Report 2008 dataset, and taking a sample of 14 SSA countries for 2010-11. But encouraging growth rates in many countries in Africa still leave much to be done in terms of inclusiveness.
Margaret McMillan also presented data suggesting that since 2000 African economies are increasingly illustrating a more standard picture of structural transformation. This radically revises the conclusions of her earlier work with Dani Rodrik (Rodrik and McMillan 2011). Andy McKay confirmed that growth has been positive since 1995 in 20 of24 countries (91% of the SSA population)--and in 11, the growth had been by a total of more than 50%. The exceptions were DRC, Cote d'Ivoire, Madagascar and Zimbabwe.
Inclusive growth--need for clarity and choices
Thewo ambitious keynote addresses framed the debates. Martin Ravallion showed that (after two centuries of reflection by economists) the generally accepted view is that poverty can and should be eradicated, and that public policy should address this challenge. The growth elasticity of poverty reduction remains a key issue, particularly how to get the poorest people in countries with high initial poverty out of extreme poverty. Erik Thorbecke outlined a vision of pro-growth poverty...