From the TUC

Africa needs manufacturing to develop

05 Jan 2013, by in International

There’s a great article by Rick Rowden in the latest issue of Foreign Policy challenging the suggestion that Africa is on the right economic course. He argues – convincingly in my view – that recent growth is based on exploitation of natural resources, and that what Africa really needs for sustainable development is manufacturing.

There are undoubtedly other elements of development (eg combating tax avoidance, the linked issue of expanding state-funded education and health, good governance and rights), but his key comparison between Africa and South East Asia is compelling. He is also right, I think, that the current global model of development assumes that manufacturing will grow simply as a result of free trade (and supply side initiatives), when in fact too often it is the other way around for Africa.

This is just another facet of the continuing struggle to overthrow the neoliberal Washington consensus, pronounced dead so many times yet still stalking, zombie-like, around the global institutions.

What the world has achieved under the World Trade Organisation is not so much an expansion of global free trade, but the imposition of modernised mercantilism. The EU and the USA have continued 19th century policies of domestic protectionism (although much more weakly than  in the past) while forcing down trade barriers in Africa. And China in particular has enforced very strong domestic protectionism while taking advantage of lower trade barriers to flood Africa with much cheaper manufactured goods than Africa can produce – the true heirs to the Westminster Whigs are on the Politburo in Beijing!

Rowden argues that:

From late 15th century England all the way up to the East Asian Tigers of recent renown, development has generally been taken as a synonym for “industrialization.” Rich countries figured out long ago, if economies are not moving out of dead-end activities that only provide diminishing returns over time (primary agriculture and extractive activities such as mining, logging, and fisheries), and into activities that provide increasing returns over time (manufacturing and services), then you can’t really say they are developing.

TUC