Actual difference in growth over 25 years = initial conditions * annual rate of growth25 (years)
Which gives;
Actual difference in growth over 25 years (per person) = 1.007 * -1.0425
Which gives;
Actual difference in growth over 25 years (per person) = -2.68
In terms of a percentage point, the actual difference in growth over 25 years (per person) is 268%. Sub – Saharan Africa compared to South Asia shows that Africa has fallen behind in growth (per person) over 25 year by approximately 62%. This is considerable!
The article states that Sub – Saharan countries have been facing with the following problems/disadvantages; physical geography and resources, weather conditions, economic policy, demography and government corruption.
Physical geography has been an important factor, in several ways.
According to the data, landlocked countries grow slower than coastal countries by 0.7 percentage points an annum. Africa scoring the lowest at –0.3, compared to South Asian 0.0. Access to the sea is important for international trade apart from moving countries closer to the markets which they are trying to trade with, it has the immediate effect of reducing transportation costs.
Temperature has also been a contributing factor, as according to data provided, tropical countries grew 1.3 percentage points slower than countries that are situated in temperate zones. East and South East Asian countries rather taking the route of tropical agriculture, they decide to focus on large expansion of manufactured exports. Their focus brought about by their determination to improve conditions for profits and labour intensive manufactured exports. This was a good economic policy as in doing so, East and South East Asian countries have avoiding the problems a linked with tropical agricultural. Allowing them to escape the poverty trap of the tropics. Due to the nature of weather conditions in the tropics, farming is of low productivity – “poor soil, unreliable rainfall, pests, and other tropical ills so deeply harm tropical agriculture in large parts of Africa.” This article challenges the economic policy of using farming as a means to escape to higher incomes via agricultural sectors. An economic policy used by African countries.
Another factor that has lead to Sub – Saharan Africa being left behind in development is their lack of economic openness, as the article explains, open economies grew 1.2 percentage points per year faster than countries which where not open. However, South Asia and Sub – Saharan Africa are equally as worst off in terms of openness.
What has been instrumental in causing African development to lag behind has it demographic situation. Considering the data provided, the demographic section of the data illustrates the increasing gap between South and South East Asian countries the greatest - The main contributing factor, being life expectancy (-1.3). This surpasses the percentage point obtained by South Asia by 2.6 times. It is apparent that this is the most imposing obstacle Sub – Saharan countries must overcome.
In effect, breach of contract, expropriation of property, inefficiency in public administration, corruption and conflicts (wars and civil-wars), have stagnated relative positive growth. And have had the effect of moving it in the opposite direction. Void of social stability and political legitimacy (undermined by dictatorships), hopes of over coming problems of resources and geography, demography or implementing shrewd economics policy (that will increase growth at sustainable levels), cannot be realised until the issues of responsible and legitimate governance is addressed. As the article rightly sights, governments must play a fundamental part in economic growth through “prudent fiscal policy.”
