Thursday, January 13, 2011
African Lions and Asian Tigers
Two recent articles discuss the good economic news coming from sub-Saharan Africa. In the next five years, seven of the ten fastest growing economies are likely to be in sub-Saharan Africa (see Economist article below). Much of the growth in investment and trade in Africa is linked to a rising Asia.
The Economist (1-6-2011) A more hopeful continent: The lion kings? Africa is now one of the world’s fastest-growing regions
WSJ (1-13-2010) A Continent of New Consumers Beckons
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The article “The Lion Kings?” explained how Africa has shown drastic economic improvement within the last decade, and even managed to higher growth rates than every BRIC country besides China. Previously only one African country has appeared on the list of the worlds ten- fastest growing economies compared to Asia’s nine. Analysts even predict that up to 7 countries on this list will be African countries within the next ten years. While these numbers are impressive to many economists, the article also mentions that these numbers are easier for Africa to obtain than Asia, because poorer countries have more potential for “catch up growth.” A lot of the growth in Africa has come from high commodity prices and increased demand for natural resources, combined with new governments saving more than in the past. The article also mentions that since commodities do not provide jobs and can fluctuate, African countries are not guaranteed to continue their growth. However, their current improvement is impressive none-the-less.
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