Second, Rowden ignores the experience of India, which has pulled millions out of poverty and vaulted up international league tables without engaging in a massive push for industrialization. In contrast to the East Asian model, India has boomed for 30 years without industrialization. The pace of India's GDP growth is exactly the same pace as Developing Asia for the last 20 years -- but with a 10-year lag. Manufacturing accounted for 11 percent of India employment in 1995 and 11 percent in 2011. It is services that are driving Indian growth. We argue that India is 20 years ahead of sub-Saharan Africa on this, and that growth in the region can accelerate for the next generation without industrialization leading the charge.
Rowden states that, absent such an emphasis on manufacturing and other value-added activities, a sub-Saharan country will be saddled with "still largely a primary agricultural economy with little movement towards the increased manufacturing or labor-intensive job creation that are needed for Africa to "rise."
In fact, if there is a myth in Rowden's piece, this is it. Justin Yifu Lin, the Taiwan-born chief economist of the World Bank, recently emphasized in his own book, The Quest for Prosperity, that every economic miracle -- including that of his Taiwanese homeland -- starts with the primary sectors doing well first.
Even Britain, the cradle of the Industrial Revolution, had to achieve an 18th-century agricultural revolution first. Russia's development in the late 19th and early 20th centuries followed a similar pattern.
Indeed, the mistake of too many African countries in the 1960s was in believing western and Soviet economic propaganda that promised post-independence leaders they could leap-frog straight to industrialization. This flew in the face of both western and Soviet history as even Stalin only industrialized on the back of what had been a very successful agricultural, mining, and resource sector.
The consequence was that African governments built up debt during the last commodity boom of the 1970s to pay for industrialization that was premature given infrastructure constraints (human and physical capital was lacking). Mining and resources in general today are helping Africa pay for the infrastructure improvements (from human to physical capital) that will enable the continent to expand industry.
SUBJECTS:
