The difference between a poor country (say, $2000 per head) and a middle income one (say, $12000 per head) is simple: one has a manufacturing sector and one does not. Something like forty percent of Kenya's GDP comes from the 5 percent of the workforce: those in light and medium industry. That sector is crucial. Most African nations won't have a self-sustaining education and health system until they build some sort of industrial tax base. What's needed to get there? Reliable roads and electricity are a start. Reducing the red tape faced by business can help too. But realistically, I believe real wages in Asia will probably have to rise before it becomes profitable to produce in Africa. The faster China and India get rich, the sooner we'll see a transformation in Africa. In the meantime, preferential trade and tax treatment by the US and Europe for African goods could help foster industry and technology transfer.
Saturday, August 30, 2008
Chris Blattman on Travelling and Development
An excellent short interview with Chris Blattman on travelling on economic development as well as a more general point on development. I really liked the following bit on what it will take to lift more African countries out of poverty:
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment