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 Thursday, February 22, 2007

Comparing East Asian Tigers and the Sub-Saharan African Couuntries


Michael Nyamute

Read here full article in Published in East African Standard

Divergent development paths charted by the so-called Tiger economies of South-East Asia and Sub-Saharan Africa over the past 50 years have been a subject of much analysis.

The two regions were more or less at the same level of development in the early 1960s. During decolonisation in the 1950s and 1960s, many nations in Asia (particularly South East Asia) and Sub-Saharan Africa were based on subsistence and underdeveloped agrarian economies.

Today, however, many South-East Asian countries have export-oriented manufacturing industries and commercialised agriculture, while -Saharan Africa countries are still steeped in subsistence agriculture, with tiny non-competitive industrial sectors. The reasons for this are many and varied.

The Netherlands government is funding a five-year research project to examine the divergence and hopes to come up with recommendations that can inform development cooperation policies.

Even as the project gets underway, it would be good to examine some of the reasons for the divergence in economic development between the two regions.

In comparing the experience of South-East Asian economies (Tiger Economies) and Sub-Saharan Africa over the past 40 to 50 years, one needs to ask the salient question: What did the Tiger economies do differently?

It was certainly not better political systems!

Some countries were more autocratic and dictatorial than many in Sub-Saharan Africa! And it was not resource endowments.

Clear vision

So what was different?

Five issues may explain.

First, Singapore, South Korea, Hong Kong, Taiwan, Malaysia, Thailand, Indonesia and Philippines surged ahead of Sub-Saharan Africa countries because of clarity of purpose and direction.

The leaders clearly defined the mission and vision around which they rallied the people. Lee Kwan Yew did it in Singapore and Mahathir Mohamed in Malaysia.

In addition, the leaders did not stop at articulating a clear mission and vision.

They walked the talk.

Implementing plans has always been the undoing of most African governments, Kenya included. A government has to make a case with a clear direction and then rally people around it.

Changed status quo

Further, the leaders and the people made it clear that they were fed up with being labelled Third World. Getting dissatisfied with the status quo plays a major role in firing up a people to improve their lot.

Second, the Asian Tiger economies realised that to make headway, they had to fix the basics, including infrastructure.

No economy can go far without the necessary physical infrastructure (transport and communication) and institutional infrastructure (policy frameworks, legal and judicial systems, law and order). Good policies and rules are necessary, but not enough: They must also be enforced efficiently and honestly.


Third, availability of manpower and labour production is crucial. A country cannot develop without adequate and relevant human skills. And education is key to developing necessary manpower.

However, education must not only be accessible to a wide population, but also be relevant to the needs of the economy. They singled out education as a means of improving productivity.

But emphasis was placed on universal elementary and compulsory high school education. Money was also spent on improving college and university system. Korea is a case in point.

Rapid expansion of basic education and decline of inequality contributed to its ability to achieve sustained and broad-based growth with income distribution maintained at an acceptable level.

The challenge for Sub-Saharan Africa is to switch from low wages to rising labour productivity as a source of comparative advantage. This means developing an educated workforce, quality technical skills and efficient infrastructure to lower transaction costs.

Work ethic

Fourth, is the question of discipline and work ethics. A disciplined and hard-working population translates into higher productivity.

Discipline translates into respect for law and order and respect for public and private property. A rowdy culture cannot take a country far. A first class road network will still grind to a halt due to bad driving habits.

There is a lot to learn from Singapore where even chewing and throwing gum on the street is an offence.

Finally, agriculture has a crucial role in economic development.

The Asian tigers modernised and mechanised agriculture and hunger and food shortages ceased being problems.

The governments then devoted their energies to industrial and service sectors.

What challenges do the two regions face in this new millennium?

  1. low wages will cease to be a significant source of comparative advantage and countries must focus on improving labour productivity.

  2. good governance and strong institutions will become crucial.

  3. the world economy is shifting from manufacturing to services. Countries must seize the new opportunities.

  4. a free Press must be nurtured.

To fulfill the role, it should be free from covert and overt censorship and fear.

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