Why Has East Asia Grown Much Faster Than Africa?

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WHY HAS EAST ASIA GROWN MUCH FASTER THAN AFRICA?

INTRODUCTION

Many nations in Africa observed an impressive growth rate in the early 1990. These were relatively greater than those obtained in the Asian Countries. However, between the 1960s and 1990s, Africa has witnessed a continuous decline in growth and this has raised concerns about what Africa could learn from the miracle of the East-Asian countries. This decline is general for most if not all African countries but emphasis is place on sub-Saharan Africa than on North Africa because the latter is grouped under a different regional economy in the same class with the Middle East.

A notable example of comparisms between the growth pace in sub-Saharan Africa and East Asia is that between Nigeria and Indonesia. Prior to the 1970, Nigeria was growing faster than Indonesia but this trend changed markedly in the last quarter of the Twentieth century despite the similar experience of oil boom in a predominately agricultural economy (Collier and Gunning, 1999). We further note that the deterioration in Africa was witnessed both in political and economic terms.

This raises further concerns when viewed from the perspective of global economy given that globalization of the world economy is perhaps the most important trend that affects the current environment for economic development. It offers great opportunities for poor countries to accelerate their economic development. But, it also poses new and substantial challenges for economic management. (Aryeetey E. et al 2005) Within this context, there has been a tendency to contrast Africa’s growth "tragedy" over the last three decades with the economic "miracle" of East Asia. There are certainly likely to be lessons from the East Asian experiences that policy-makers in sub-Saharan Africa could adapt to their own situations. Lessons can be learnt both from the era of rapid growth in East Asia as well as from the ongoing economic crisis.

AN OVERVIEW
The Southeast Asian nations Indonesia, Malaysia and Thailand would seem to offer the most relevant lessons for Sub-Saharan Africa. Southeast Asia and Africa had similar levels of income in the 1960s and 1970s. This can be seen in the graph below, which highlights the changes in GDP per capita in Southeast Asia and Africa since 1970. The two regions also had relatively similar social and political conditions at that time. The graph powerfully illustrates the sustained growth in Southeast Asia for twenty-five years as well as the marked decline in Africa’s fortunes since the early 1980s.

Source: Calculated from World Development Indicators (World Bank, 1997).

Over the years there has been a debate of whether the slow growth rate in Africa is due to internal or external factors. Be that as it may, a better judgement of the issues is one that recognises influence of both domestic and exogenous factors in determining Africa’s growth rate. Most crucial is the issue of low level of investment in Africa. This goes in line with the simple Harrod-Dommer growth model which posits that with a constant capital-output ratio, an economy needs to save and invest in order to grow. We therefore look at the endogenous and exogenous factors that has inhibited Africa’s growth rate relative to that of East Asia.

DOMESTIC FACTORS

Slow growth rate in Africa has been originally associated with some geographic and demographic characteristics. Firstly, most countries in Africa are landlocked and have little access to the sea, besides this the tropical climate experienced in Africa provides a breading ground for mosquitoes which has led to high occurrence of the Malaria infection. This disease has killed millions of Africans. An estimated 300-500 million cases each year cause 1.5 to 2.7 million deaths (ARCHI, www...).

Furthermore, Africa is known for its high fertility rate. Although it also experienced high infant mortality rates, the improvement in health provisions...
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