[intro]What will it take for African states to develop their economies? Is it simply a case of following in the path of developed nations? Last month, Ha-Joon Chang, a specialist in development economics, addressed members of the United Nations Economic Commission for Africa. Chang’s talk focused on the need for developing nations to use industrialisation, government support and an increase in exports in order to strengthen their economies.[/intro]
“Africa needs industrialisation for economic development, that requires an effective industrial policy,” said Ha-Joon Chang, renowned development economist and author. Chang gave the second Annual Adebayo Adedeji Lecture last month during Africa Development Week at the Economic Commission for Africa headquarters in Addis Ababa.
Chang argued that industrialisation has been key to the economic success of developed states throughout history, and African countries should continue to follow this model, using government based programmes that will protect local industries, improve research and development, as well as encourage exports.
During his lecture, Chang stepped back in time and looked at the United States of America (USA) in 1791 and South Korea in 1965 as prime examples of developed nations that used industrialisation to grow their economies successfully in the past,
Chang said that back in 1791, the USA, very much like South Africa today, was dependent on its natural resources and relied on exporting agricultural products, “The country also [had] high wages, compared to those manufacturing nations in the East… The wage issue was so important that one of the founding fathers actually called for protectionism in order to protect local wages against eastern competition.
Protectionism refers to government policies and actions that restrain or restrict international trade, with the intention of protecting local employment and small businesses from overseas competition. Since the USA was so dependent on exporting agricultural projects like cotton and tobacco way back in the 1700s, their main concern was protecting local wages ‘against low wage competition from the countries in the East’.
Chang also used South Korea in the 1960s as another example of a nation that was struggling to find its feet, with the developed world at the time calling the East Asian country a ‘bottomless pit’. “Some people think civil war is an African speciality but [South Korea] had one back in the 1950s. In three years, 4 million people were killed. We lost 75% of railways, this created huge gaps but also political divisions.”
So if these two countries, the USA in the 1700s and South Korea in the 1960s, looked very much like developing African countries today, how did they become two of the most successful economies in human history?
“The short answer, is that these two countries industrialised.”
Chang said that while there are a number of paths to industrialisation success, many countries have been able to grow their economies through infant industry programmes such as trade protectionism, government subsidies, regulation of private sector investment and public investment in infrastructure, education and research and development, for instance.
“The infant industry argument is that governments in backward economies need to protect and nurture their young industries through policies until they grow up and compete with producers from more advanced countries,” said Chang.
“Africa needs industrialisation for economic development and that requires an effective industrial policy,” said Chang during his lecture.
The economist added that developing nations should be wary of advice from developed nations, who have used infant industry programmes successfully to develop their economies and following their realisation of economic success, often dissuade poorer countries from using those policies. He furthers this argument in his books Kicking Away the Ladder. “contrary to the prevailing myth, almost all of today’s rich countries have developed their economies through infant industry programmes… once countries become rich by using those policies, they start telling poorer countries not to use those policies. So you climb up to the top, using a ladder, and when you reach the top you kick the ladder away so that other people cannot follow.”
Chang continuously emphasised the need for government policies to ensure and sustain growth until such time as local markets mature; and warned that even though infant industry protection creates the ‘space’ for improvement in productive capabilities, it does not automatically lead to productivity increase, thus government support is constantly necessary to ensure growth.
“There should be government policies to ensure that the necessary investments are made in raising productive capabilities, investment in machines, workers skills, research and development,” said Chang.
“[W]hat you need is a strategic combination of expert promotion and infant industry programmes. Unfortunately this was not done in many African countries, and infant industry usually resulted in unsustainable balance of payment problems and the consequent macro- economic constraints which then put the brake on the industrialisation process,” he said.
Watch Chang’s full lecture here.
My partner and I stumbled over here by a different web page and thought
I might check things out. I like what I see so now i’m following you.
Look forward to looking at your web page yet again.
Wow, that’s what I was searching for, what a material! existing here at this web site,
thanks admin of this website.
Superb blog! Do you have any tips for aspiring writers?
I’m hoping to start my own blog soon but I’m a little lost on everything.
Would you advise starting with a free platform like WordPress or go
for a paid option? There are so many choices out there that I’m completely overwhelmed ..
Any ideas? Many thanks!
Pretty element of content. I simply stumbled upon your website and in accession capital to say that I
get actually enjoyed account your blog posts.
Anyway I’ll be subscribing to your augment and even I achievement you get
right of entry to constantly rapidly.
I like reading through a post that can make people
think. Also, thanks for permitting me to comment!
hey there and thank you for your info – I have definitely picked up anything new from right here.
I did however expertise a few technical issues using this web site, as I experienced to reload the site a
lot of times previous to I could get it to load properly.
I had been wondering if your web hosting is
OK? Not that I am complaining, but slow loading instances times will often affect your placement in google
and could damage your quality score if ads and marketing with Adwords.
Well I’m adding this RSS to my e-mail and could look
out for a lot more of your respective fascinating content.
Ensure that you update this again very soon.
It’s actually a cool and helpful piece of info. I’m happy that you simply shared this helpful information with us.
Please stay us up to date like this. Thanks for sharing.
If some one desires to be updated with hottest technologies therefore
he must be go to see this web page and be up to date all the time.
Hey terrific blog! Does running a blog similar to this take
a great deal of work? I’ve no understanding of computer programming
but I had been hoping to start my own blog soon. Anyway, if
you have any recommendations or tips for new blog owners please share.
I understand this is off topic nevertheless I just needed to ask.
Thank you!
Thank you for the good writeup. It in fact was a amusement account it.
Look advanced to more added agreeable from you! However,
how can we communicate?
Wow that was strange. I just wrote an incredibly long comment but after
I clicked submit my comment didn’t appear.
Grrrr… well I’m not writing all that over again. Anyhow, just
wanted to say wonderful blog!
When someone writes an article he/she maintains the
image of a user in his/her mind that how a
user can know it. Therefore that’s why this piece of writing
is great. Thanks!
Hey there! This is kind of off topic but I need some guidance from an established blog.
Is it difficult to set up your own blog? I’m not very
techincal but I can figure things out pretty quick.
I’m thinking about making my own but I’m not sure where to start.
Do you have any points or suggestions? Appreciate it
Lego Ninjago has been a big hit with both children and adults.
They combine an action-packed story with building fun. awesome LEGO Brick sets Lego is a big part of adult life.
I didn’t think I would ever say this. It’s
amazing how Lego can be both innovative and nostalgic at the same
time. The LEGO Nintendo Entertainment System has transported me
to my childhood gaming years!
All of these web sites are licensedd and regulated overseas and accept Korean players.
Here is my webpage: Baccarat
Even though new to the game, this casino is owned by Eddie Robbins III, the founder
of the trusted websites BetOnline, SportsBook, and Wild Online Casino Games.
This facility allows Korean players to depsit without registering with a fizcal bank account.
My web-site: Baccarat Game
We wnt to send you to a sportsbook where you can bett on Austin-based Complexity’s Counter-Strike group as quickly as the Mavs.
myblog – Korea Sports Betting
The quantity you’ll qualify for will depend on your credit score, your economic stability, aand the lender’s policies.
My site … more info
Korean Baccarat Site vaqriations aat Bitstarz have been optimized
to perform smoothly on all mobile devices.
Bet365 poker is also an selection, along wth reside streaming casino games
and alll the best slot titles.
Here is my blog post – http://www.neonix.co.kr/board_imsn74/276150
If some one needs expert view on the topic of blogging after that i suggest him/her to pay a visit this blog,
Keep up the pleasant work.
Officials have been trying to safe spacces at government coaching centers aand education facilities as effectivelyy ass hotels.
my web site: Sports betting in South Korea
i prefer wall clocks with hanging pendulums because they look nice at home.,
You ought to actually take into consideration engaged on developing this blog into a serious authority on this market. You evidently have a grasp deal with of the subjects everyone seems to be searching for on this website in any case and you may certainly even earn a buck or two off of some advertisements. I’d discover following recent matters and raising the amount of write ups you place up and I assure you’d start seeing some wonderful targeted site visitors within the close to future. Just a thought, good luck in no matter you do!
Aw, it was an incredibly good post. In concept I would like to put in place writing similar to this moreover – spending time and actual effort to have a really good article… but what / things I say… I procrastinate alot and no means often get something accomplished.
It¡¦s actually a great and helpful piece of information. I¡¦m glad that you just shared this helpful information with us. Please stay us informed like this. Thank you for sharing.
You created some decent points there. I looked on the internet for any problem and discovered most individuals will go along with with your website.
What?s Going down i’m new to this, I stumbled upon this I have discovered It positively useful and it has aided me out loads. I’m hoping to give a contribution & aid different users like its helped me. Great job.