The Huajian shoe factory in the Eastern Industrial Zone in Ethiopia. Photo: .
Ethiopia is being hailed as one of the most successful growth stories in Africa. Because of the country鈥檚 rapid economic growth, the high degree of state intervention in the economy, and the state鈥檚 focus on industrialization, people have started to compare Ethiopia to the Asian 鈥榯igers鈥� (; ; , ; ) 鈥� four countries in East Asia (Hong Kong, Singapore, South Korea and Taiwan) that underwent rapid industrialization and maintained exceptionally high growth rates in the post-WWII era.
However, this emerging literature on Ethiopia-Asia comparisons has not yet sufficiently addressed one of the most important aspects of Ethiopia鈥檚 industrialization strategy 鈥� the attraction of foreign direct investments (FDI) into the manufacturing sector.
The rationale of my was this gap in the literature. In it, I ask the question: Should the African lion learn from the Asian tigers with respect to FDI-oriented industrial policy?听
In short, my answer is yes. While Ethiopia鈥檚 policies are bringing about short-term economic success and showing promise for further industrialization, the state could arguably bargain harder with foreign investors, like it did in South Korea and Taiwan.Read More »
Over the past decade the expansion of digital-financial inclusion through innovations in financial technology (fin-tech) has been identified by the World Bank, the G20, USAID, the Bill & Melinda Gates Foundation, and other major international institutions, as a key way to promote development and alleviate poverty in the Global South (; ; ). Perhaps the most influential and widely reported publication pushing forward this narrative is an article examining M-Pesawritten by US-based economists TavneetSuri and William Jack鈥�and published in the prestigious journal Science鈥�entitled ‘The Long-run Poverty and Gender Impacts of Mobile Money’. M-Pesa isa mobile phone, agent-assisted platform for transferring money from one person to another. It was originally developed with funding from DFID and has quickly become a darling of the digital-financial inclusion movement. In this particular article,the authors make the far-reaching claim that 鈥榓ccess to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty鈥� ().
Suri and Jack鈥檚 article in Sciencehas sent ripples through the global development community and has served鈥�as perhaps was intended鈥�to solidify support for upping the promotion of digital-financial inclusion initiatives across the Global South. Importantly, the article鈥檚claims of unprecedented poverty reduction have been uncritically picked up by all of the international development agencies and microcredit advocacy organisations, as well as by many mainstream economists, so-called 鈥榮ocial entrepreneurs鈥�, tech investors, and media outlets. Much like microcredit in the 1980s, fin-tech and digital-financial inclusion is now very widely seen as a 办别测鈥�if not the key鈥�to reducing global poverty and promoting local development.
In this post we summarise our recent article entitled 鈥業s Fin-tech the New Panacea for Poverty Alleviation and Local Development?鈥� (), which challenges Suri and Jack鈥檚 findings, and urges the global development community to take a second, more critical look at their study. We argue that the article contains a worrying number of omissions, errors, inconsistencies, and that it also employs flawed methodologies. Unfortunately, their inevitably flawed conclusions have served to legitimise and strengthen a false narrative of the role that fin-tech can play in poverty alleviation and development, with potentially devastating consequences for the global poor.Read More »
The remains of one of SOMINKI鈥檚 industrial gold mines (author photo).
The World Bank interpreted the failure of mineral extraction to drive structural transformation in the early decades of African Independence as due to badly managed state-owned enterprises (SOEs), excessive state intervention in the economy, and government corruption. To right these wrongs, since the 1980s, the Bank has loaned hundreds of millions of dollars to the governments of mineral-rich (and mostly low-income) African countries to privatise and liberalise their mining sectors. Spurred on by the most recent commodity super-cycle beginning in the late 1990s, foreign direct investment poured in, and for many low-income African countries today, 鈥渢he mining sector represents one of the most crucial sources of investment and income in their economies鈥� (Farole and Winkler 2014: 177). A major theoretical assumption underpinning this process has been a belief in the superior expertise and efficiency of experienced transnational corporations (TNCs) compared to corrupt and mismanaged SOEs. In this post, I unpack and question the validity of this assumption, by drawing on some of the findings from my doctoral thesis on mining reindustrialisation in South Kivu Province of the Democratic Republic of the Congo (DRC). 听听听 Read More »
Omar al Bashir has fallen in Khartoum. Beyond regime change–managed by the military– there’s a deeper economic crisis.
In April 11th after听outside of the compound of the Military High Command in Central Khartoum, the Minister of Defense and First Vice President of Sudan,听听Ahmed Awad Ibn Auf made a televised broadcast to the nation, announcing the arrest of President Omar El-Bashir and an unspecified number of other high ranking officials primarily associated with Islamist Movement. Ibn Auf听, and a three month state of emergency including a curfew. His demands have been rejected by the Sudanese Professional Association and other groups like Girfna, which have declared that only a civilian transitional government would be acceptable. The Sudanese Professional Association have published a Declaration of Freedom and Change which outlines a plan for a four year transitional government made up of civilian technocrats. Chants of tsgut bas (Just fall) changed overnight to sgut (fallen).
By Ushehwedu听Kufakurinani, Ingrid Harvold听Kvangraven and Maria听Dyveke听Styve
When the sad news came of Samir Amin鈥檚 passing on August 12th, 2018, a plethora of beautiful obituaries were published in his memory (see for example听,听,听听or听). These have made it more than evident not only how important his scholarship and work through the World Social Forum听is, but also what an extraordinary person he was. We never had the privilege of meeting Samir Amin in person, but he was very kind to grant us an interview over Skype for an听听we put together in 2017 on the contemporary relevance of dependency theory (since published by the听). Now we wish to unpack his contributions to our understanding of political economy and uneven development, and explore how his ideas have been interpreted and听adopted in different contexts,听and their relevance today.
Getting access to credit is a critical challenge for small-holder farmers all over Sub-Saharan Africa . A new breed of financial-technology firms (fintech) promises to address this issue, claiming that digital technologies can lower the barriers for borrowers and cut transaction costs for lenders. As part of our, we have been examining these claims, studying how tech companies translate them into business initiatives and exploring the implications for knowledge production, economic growth and value redistribution.
In rural Kenya, fintech innovations are premised on greater efficiency and transparency and inspired by narratives of digital disintermediation. Similarly to what argued for migrant remittances by Vincent Guermond in a previous post of this blog series , digital lenders harness data (extracted through digital infrastructures) and algorithms to make farmers more legible and, therefore, more predictable. In order to expand their pool of data, Kenyan fintechs are increasingly embedding themselves into inter-connected digital infrastructures, or platforms. These platforms provide farmers with end-to-end solutions, and thereby bundle together financial services with the provision of agricultural inputs and information extension services. In so doing, lenders recalibrate and harmonize their risk-assessment procedures, and construct an ideal type of farmer whose financial behaviours and importance in the local value chain can be clearly pinned down.Read More »
How are things 鈥渄atafied?鈥� This blog post aims to answer this question by offering a critical reflection on a wide range of recent initiatives that attempt to 鈥渄atafy鈥� remittances, i.e. leverage migrants鈥� and recipients鈥� money as a means to facilitate access to digital financial products and services for individuals and households, with a specific focus on Ghana. A handful of scholars have started to critically assess the political economy of the 鈥渇inancialisation of remittances鈥�, calling into question an agenda that is animated not by the needs of migrant men and women but rather the political and financial concerns of a broad coalition of global and national actors relating to the socio-spatial expansion of markets (Datta, ; Cross, 听; Kunz, ; Hudson, ; Zapata, ). Here, I want to focus on the yet neglected aspect of the construction of these remittance markets, rather than treating financialization as 鈥渁n explanation in and of itself鈥� (Fields, :119).
Late developers are nowadays confronted with the problem of having to earn foreign currency to finance structural transformation under extremely unfavourable conditions. The dependency on forex is rooted in the international financial architecture and represents a major pitfall for countries trying to catch up. However, this structural impediment to transformation is not paid much attention to by the dominant development economics.Read More »
黑料社区 