Transcript Sub-Saharan Africa and Europe in a globalizing world

Sub-Saharan Africa and
Europe in a restructuring world
François Bourguignon and Pierre Jacquet
Paris School of Economics and Agence Française de Développement
AFD-EUDN Conference, December 2009, Paris
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Sub-Saharan Africa in a multi-polar world
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Commodity exports not sufficient to sustain
SSA's catching-up: need for diversification.
SSA development handicaps: productivity
gaps, population growth, hard and soft
infrastructure deficit.
SSA unlikely to become a development pole
by itself without outside support
Development prospects depend on
relationship with existing and emerging
global economic poles
The potentially privileged position of Europe
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Outline
1.
Development performances of SSA
and its present global economic
integration
2.
Inward and outward oriented
strategies to accelerate SSA
development
3.
What European policy towards SSA?
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1. Development performances of SSA and
its present global economic integration
i.
ii.
iii.
iv.
v.
Aggregate performances
Trade integration
Factor flows
Aid to SSA
Global powers' initiatives towards
SSA
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i. Aggregate performances
GDP per capita growth rates by world regions: 1970-2008
8
Developing countries
6
Developed countries
4
2
0
1970
1975
1980
1985
1990
1995
2000
2005
-2
Sub-Saharan Africa
-4
-6
5
Sub-Saharan Africa: Terms of trade and GDP per capita
growth, 1980-2007
160
8
140
6
120
4
100
2
80
0
60
-2
GDP per capita growth
40
-4
20
-6
0
1980
-8
1985
1995
1990
2000
2005
Year
6
Growth rate (%)
Index (2000=100)
Terms of Trade (2000=100)
Sub-Saharan Africa: Sectoral composition of GDP, 19702008
60
Services
50
Per cent
40
Industry (inc. Manufactuiring)
30
Agriculture
20
10
0
1970
1975
1980
1985
1990
1995
2000
2005
Year
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Sub-Saharan Africa: mean per capita GDP growth
rates by type of country
1970-1978
1979-1994
1995-2007
Sub-Saharan Africa (unweighted mean)
2.0
-0.7
1.7
Resource-rich countries
Resource poor countries
1.6
2.1
-1.6
-0.3
1.9
1.6
Landlocked countries
Coastal countries
2.0
1.9
-0.6
-0.7
1.8
1.7
Fragile countries
Non-fragile countries
1.4
2.6
-1.7
0.4
1.4
2.1
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ii. Trade integration
Sub-Saharan Africa: Openness and share of world trade
2,5%
40
Openness (X+M)/2*GDP
2,0%
30
SSA Exports
SSA GDP
1,5%
25
20
1,0%
15
10
0,5%
5
0
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
0,0%
1981
% of World Exports and World GDP
35
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Geographical structure of SSA trade
Subsaharan African Imports - 2008
Rest of World
Europe
Africa
China
Japan
USA
40%
35%
% of SSA GDP
30%
25%
20%
15%
10%
5%
0%
ALL SSA
Resource
Non-resource
Coastal
Landlocked
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SSA Trade specialization, 2008
250
Fuel
Manufactures
Agr. Raw Materials
Food
Ores & Metals
Exports
Imports
Current dollars, in Billion
200
150
100
50
Exports
Imports
SSA without South Africa
Exports
Imports
Resource rich
Source : Comtrade. The category “non-resource rich” includes South-Africa
Non - Resource rich
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SSA manufactured trade by destination countries:
1998-2008
25
1998
20
SSA imports of manufactures
US$ billion
US$ billion
SSA exports of manufactures
2008
70
60
1998
50
15
40
10
30
2008
20
5
10
-
-
EU - 27
USA
SSA
China
Other
Source : Comtrade. The category “manufactures” does not include non-ferrous metals.
EU - 27
USA
SSA
China
Other
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iii. Foreign factor flows
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SSA migration by region of destination
Stocks of SSA migrants outside SSA: 1990-2000
3.5
3
Millions
2.5
2
1990
2000
1.5
1
0.5
0
America
Europe
EU 15
Region of destination
Asia and Oceanis
Total
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iv. Aid to SSA
Official Development Assistance to Africa by donor:
1990-2007
35
30
$ Billion
25
1990
1995
2000
2005
2007
20
15
10
5
0
Multi-lateral
EU
US
Others
Total
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v. Global powers' SSA initiatives
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EU : after 30 years (GSP, Lomé, Cotonou) of a policy
based on trade preferences and development
finance, shift toward reciprocal trade agreements
cum regional integration through the EPAs.
SSA comeback as a strategic stake (access to
resources, global politics) since the early 2000s
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AGOA: Apparel and non-apparel preferences
EBA: Preferences open to least advanced countries
FOCAC: the China-Africa partnership
Issues
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Crucial role of rules of origin :AGOA vs. EU's EBA
Questions on the impact of preferences
Is WTO compatibility an issue ?
Is China more or less effective than the West ?
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vi. Partial summary
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A region highly diverse but with common
problems
A region very open and globally dependent
on trade in primary commodities
Dismal growth performances in the 1980s
and 1990s. No autonomous growth engine
at work
Very strong links with Europe (trade and
market access, aid, migrations)
Important role for ODA (programmable aid
about 5% of SSA GDP)
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2. Inward- and outward-oriented strategies
to accelerate SSA development
i.
ii.
iii.
Limitations of the "business as
usual" or the "rentier" scenario
Import substitution through proper
regional integration
Diversifying exports through trade
preferences
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i. Limitations of the "business as usual"
or the "rentier" scenario
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Commodity exports' rent and remittances
cannot support ambitious development:
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Limited development potential of non-traditional
tradable sectors:
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Fragility; dependency on global demand; nontradable bias; demographic growth; weak global
prospects
Low competitiveness; small domestic market size;
lack of hard and soft infrastructure
Investing in governance and human capital
necessary but not a substitute to a traderelated 'growth engine'
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ii. Import substitution through proper
regional integration
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Past SSA experiences with Regional Integration
Agreements (SADC, ECOWAS, UEMOA, ..)
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Transforming present agreements into proper
custom unions:
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Free trade areas vs custom unions, overlaps, trade
diversion
Uniform tariffs and relative protection of a few
sectors; effective regulation of competition;
infrastructure investments; foreign investors
Asian development
WTO rules
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iii. Diversifying exports through trade
preferences
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Revisiting AGOA and EBA types of agreements
with US and EU economic poles:
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Chinese investors using SSA as an export base
is not necessarily a problem:
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Extend country coverage, soften rules of origin
Tariffs in US and EU are low anyhow; competition
among foreign investors; spillover effects on
domestic markets identical
Present experiences of Special Economic Zones
supported by Chinese firms
Combining regional integration and trade
preferences
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3. European policy toward SSA
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Why is SSA strategic ?
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Access to energy and natural resources
Demographics
Game of influence through development
effectiveness
Why should Europe invest more in SSA ?
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Natural geopolitical space
EU and SSA are natural markets for each other
Labor and personal mobility
Laboratory for innovation in sustainable
development
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3. European policy towards SSA (2)
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Evolving relative position of Europe in SSA
Define global, consistent policy toward SSA
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Trade preferences, support for regional
integration, more flexible rules of origins
Substantial scaling-up in volume and quality
of development assistance
Consistent immigration policies
Promotion of a conducive global governance
framework:
 Allowing SSA policy space for economic
diversification (through trade policy,
subsidies, forms of “industrial” policies…).
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