Transcript Dirk Willem te Velde_Future of econ transformation_SET

THE FUTURE OF ECONOMIC TRANSFORMATION
COMMENTS
Dr Dirk Willem te Velde – Director SET, ODI
23 / 6 / 2015
SETTING THE CONTEXT
•
Economic transformation (moving resources to high-productivity activities, both within and between sectors) is
essential for improving the quality of growth that is broad-based, resilient against shocks, and increased
opportunities for further growth
•
Economic transformation is a developing country-led development agenda (e.g. AU, SDGs, ACET,
developing country governments).
•
Supporting Economic Transformation (SET) is an ODI programme funded by UK DFID to support countries
in their quest for economic transformation. Illustrations:
•
3
–
Data analysis for economic transformation (SET data portal)
–
Analysing opportunities and challenges for ET (Kenya services, Tanzania industrialisation five year plan)
–
Understanding ET policies (Nepal hydropower, Nigeria new administration)
This PPT: tackling an apparent conundrum of a pessimistic ET outlook vs. positive current ET experiences e.g.
in East Africa.
“We are systematically
underestimating the extent of
economic transformation in
African countries”
SOURCE:
RECENT NATIONAL ACCOUNTS REBASING IN AFRICA
WHAT HAS CHANGED (APART FROM +US300 BILLION)?
% Change in levels of GDP
pp change in manufacturing share GDP
100
80
Nigeria
Ghana (2006)
Ghana (2006)
(2010)
Nigeria (2010)
Nigeria (2010)
Kenya (2009)
Kenya (2009)
Uganda
(2009/10)
Uganda
(2009/10)
Zambia (2010)
Zambia (2010)
Tanzania (2007)
Tanzania (2007)
60
40
Kenya (2009)
20
0
pp change services share
Uganda(2009/10)
2006 2007 2008 2009 2010 2011 2012 2013
Source: National Statistical Agencies
-2.00% 0.00% 2.00% 4.00% 6.00%
-10.00% 0.00% 10.00% 20.00% 30.00%
“Recent data suggest some
African countries have
successfully mastered some
manufacturing capabilities”
SOURCE:
RE-IMAGINING A POSITIVE ROLE FOR AFRICAN MANUFACTURING
1.10%
Share of SSA in world manufacturing
1.05%
•
Annual real manufacturing growth 1997-2012 (WDI data) high:
SSA (3.4%), Tanzania (7.9%), World (2.3%),
7
1.00%
0.95%
0.90%
Rebasing suggests greater role for manufacturing
0.85%
•
In between sector (McMillan) high growth, but not measured
0.80%
•
Chinese SEZs have created 20.000 jobs in Africa (incl manufacturing)
•
Increasing economic complexity: top increases (2000-2012) in complexity in Uganda (rank 2 out of 121),
Tanzania (10), Kenya (12), but not Nigeria (78), Zambia (85), or Zimbabwe (91)
•
And SSA far away from Rodrik’s “manufacturing peak”, see X
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
•
TANZANIA – HAUSMANN PRODUCT SPACE (1995)
8
TANZANIA – HAUSMANN PRODUCT SPACE (2013)
Products with lost of
linkages / embodying
productive knowledge
9
“Role and scope of services in
GDP, employment and value
chains is growing: creating
quality services linkages for
agriculture & manufacturing
productivity is crucial”
SOURCE:
ROLE OF SERVICES IN ECONOMIC TRANSFORMATION IS CHANGING
Share of services in value
added 1960-2013
Share
of
services
in
employment (pre/post 2005)
High growth services least
employment intensive (Kenya)
2.5
Education
2
60
South Africa
Employment intensity
70
80
Change in share in GDP
(2013-2009)
Health
60
India
1.5
Public administration
Information
Accomodation
1
and
Communication
Professional
Wholesale trade
services
Manufacturing
Transport
Data after 2005
40
Tanzania
40
50
Kenya
0.5
Rwanda
Uganda
30
20
Data before 2005
Financial services
Real estate
Level of income
1960
1970
1980
1990
2000
2010
6
7
8
9
10
-2.0%
11
-1.5%
-1.0%
-0.5%
0
0.0%
0.5%
1.0%
1.5%
Source: World Development Indicators, Kenya Statistical Abstract 2014
Note: Change in GDP share (2013-2009), percentage point, and employment intensity (2009) as wage employment divided by value added.
2.0
A DIFFERENT LOOK AT SERVICES REQUIRED
CONTRIBUTION OF SERVICES TO VALUE ADDED IN EXPORTS
(2000 AND 2011) (E.G. VALUE CHAINS)
25%
21%
20%
19%
19%
18%
18%
2011
16%
16%
15%
15%
14%
14%
13%
12%
200011%
12%
9%
10%
7%
5%
0%
Kenya
Tanzania
Uganda
South Africa
Rwanda
Ghana
Source: SET data analysis using EORA input-output database
Nigeria
India
“If SSA wants to get the most
out of future ET opportunities
(within and between sectors), it
needs effective use of selective
policies within appropriate
institutional settings”
SOURCE:
IMPLICATIONS FOR ECONOMIC TRANSFORMATION POLICY
Public Actions to
Support Structural
Change
Source:
McMillan, Page
and te Velde
2015),
Public
Actions to
Support
Structural
Change
Non-Selective Interventions
Investment Climate Reforms
FinancialInterventions
Sector Development
Exchange
Non-Selective
Selective Interventions
Investment Climate Reforms
Export Push Policies
Strengthening
State-Business
Selective
Financial
Sector Development
Exchange Rate
Protection
Relations
Strengthening State-Business
Relations
Rate Protection
Industrial Policies
Selective Industrial Policies
Spatial Industrial Policies
Spatial Industrial Policies
National
Development
National Development
Banks
Public
Public Actions
to
Actions to
Support withinSupport
withinsector Productivity
sector
Growth
Productivit
y Growth
Building fundamentals
Building fundamentals
Banks
Management Training
Management Training
Investments in Basic Production
Attracting Foreign Direct Investment
Knowledge
Investments
in Basic
Attracting Foreign Direct

Managerial good practices as Export Diversification
Production
public goods Knowledge
  Agricultural
innovations
Developing Global
ValueDiversification
Chains
Managerial
good practices
Export
public goods
Promotingas
Competition

14
Selective Interventions
Export Push Policies
Increasing Agricultural Productivity
Agricultural innovations
Promoting Competition
Investment
Developing Global Value Chains
Increasing Agricultural Productivity
IMPLICATIONS FOR ECONOMIC TRANSFORMATION POLICY
Public Actions to
Support Structural
Change
Source:
McMillan, Page
and te Velde
2015),
Public
Actions to
Support
Structural
Change
Non-Selective Interventions
Investment Climate Reforms
FinancialInterventions
Sector Development
Exchange
Non-Selective
Selective Interventions
Investment Climate Reforms
Export Push Policies
Strengthening
State-Business
Selective
Financial
Sector Development
Exchange Rate
Protection
Relations
Strengthening State-Business
Relations
Rate Protection
Industrial Policies
Selective Industrial Policies
Spatial Industrial Policies
Spatial Industrial Policies
National
Development
National Development
Banks
Public
Public Actions
to
Actions to
Support withinSupport
withinsector Productivity
sector
Growth
Productivit
y Growth
Building fundamentals
Building fundamentals

Management Training
Management Training
Investment
Increasing Agricultural Productivity
Agricultural innovations
Promoting Competition
POLITICAL
ECONOMY!
Banks
Investments in Basic Production
Attracting Foreign Direct Investment
Knowledge
Investments
in Basic
Attracting Foreign Direct

Managerial good practices as Export Diversification
Production
public goods Knowledge
  Agricultural
innovations
Developing Global
ValueDiversification
Chains
Managerial
good practices
Export
public goods
Promotingas
Competition
15
Selective Interventions
Export Push Policies
Developing Global Value Chains
Increasing Agricultural Productivity
The Supporting Economic Transformation (SET) is an ODI
programme funded by UK DFID to support countries in their
quest for economic transformation through data and policy
analysis and covening. The views expressed are those of the
researchers and do not necessarily represent the views of ODI
or DFID.
For further information: Leah Worrall, SET programme manager
203 Blackfriars Road, London, SE1 8NJ
T: +44 207 9220 300
www.odi.org
[email protected]
DIFFERENT SECTORS/ACTIVITIES HAVE DIFFERENT ATTRIBUTES
TANZANIA
0.14
Sisal
Labour with less than primary education
0.12
Fisheries
0.10
Cashews
0.08
Sorghum
Pulses
Oilseeds
Coconuts Millet
Other crops
0.06
0.04
Tobacco
Cattle Sugarcane
Coffee
Vegetables
Fruits
Retail and wholesale trade
Cotton
Rice
Cassava
Rice milling
0.02
Other milling
Non-metals
Textiles and clothing
0.00
0.00
Metals
0.50
1.00
1.50
Output multiplier
2.00
2.50
3.00