Stiglitz Warns Against Expecting Africa to Repeat Asian Miracle
(Bloomberg) -- Nobel Laureate Joseph Stiglitz said it may be naïve to expect the same kind of economic miracle that occurred in Asia to be repeated in Africa.
“That model that was the basis of the success of East Asia won’t be available to the same extent for Africa going forward,” Stiglitz said at a conference in Helsinki on Saturday. “Everybody wants to imitate what they did and hope that they can get the same results, but today is different -- that won’t work today.”
Stiglitz said the reason lies in the dynamics now driving the global economy. Productivity growth is outstripping demand growth, which means the potential for job creation is limited, he said.
“All these people in manufacturing are going to have to be deployed somewhere else in the economy,” he said.
Meanwhile, the spread of automation means that people in developing countries, where labor costs are generally lower, are benefiting less from growing manufacturing sectors, he said.
Stiglitz, who was awarded the Nobel prize in economics in 2001 for his joint work analyzing markets with asymmetric information, has become an outspoken critic of inequality, arguing that growth and equality should be seen “as complements rather than substitutes.”
He said Africa needs an economic model that contains “elements of manufacturing, agriculture, resources and services.”
“If you do that well, they can have success comparable to export-manufacturing-led growth,” he said.
©2018 Bloomberg L.P.