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Globalization and Development in Sub-Saharan Africa

image of Globalization and Development in Sub-Saharan Africa
This publication critically reviews the effects of globalization on sub-Saharan Africa over the last three decades. The large gains expected from opening up to international economic forces have, to date, been limited, while there have been significant adverse consequences. Foreign direct investment in the region has been largely confined to resource—especially mineral—extraction, even as continuing capital flight has reduced financial resources available for productive investments. Premature trade liberalization has undermined prospects for the economic development of productive capacities in many sectors – including manufacturing and agriculture -- are not sufficiently competitive to take advantage of improvements in market access.

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Trade and development

In line with the 1981 Berg Report, much World Bank research has suggested for a long time that Africa would gain most by specializing in agriculture. Removal or reduction of subsidies and protection in the North would give farmers in SSA the opportunity to significantly increase their shares in these markets, and would allow them to benefit from their comparative advantage in agriculture. Yet, the evidence of African agricultural competitiveness remains dubious for most crops. Reliance on trade liberalization and static comparative advantages in agriculture or resource-based industries is also at odds with the development experience of almost all earlier development or rapid growth experiences, which have invariably involved pursuing industrialization and diversification strategies (Chang 2003).

English

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