Why is Africa still suffering from poverty? Africa is now the world’s poorest continent. According to figures released by the World Bank in 2015, 43 percent of the African population lives below the poverty line of $1.25 per day. This is not because Africans are not hardworking, or because they lack entrepreneurial spirit, and it is not because African governments are inactive. The reason why they have not achieved modernization is that they are still stuck in the wrong mindset. Although Africa may have thrown off colonial rule, African countries are still copying Western ideas, even though they are often unsuitable.
There are some examples of successful economies that have maintained stable and rapid development in the course of their transformation, including China, Vietnam, Cambodia and some East European countries like Poland and Slovenia. They may have made some mistakes during this process but they all have some characteristics in common.
First, they have not blindly followed the ideas and systems used by developed countries. Second, they have generally been pragmatic and have focused on development of the most advantageous industries, followed by gradual expansion in other areas.
If African countries want to alleviate poverty, they must be clear what they currently have and what they are adept at, and then they must make full use of these advantages to establish their own competitive industries with help from both the government and the private sector.
In Africa, natural resources and labor resources are the two most abundant resources. Therefore, they should develop resource-intensive industries and labor-intensive industries. Africa’s infrastructure and business environment are generally poor, so they can learn from China and establish special economic zones as export processing areas, in which one-stop services can be developed. At first, international buyers may have little confidence in African goods, but African countries can learn from China’s experience in attracting investment. They can encourage local people who have worked in China to bring back to Africa their technology, capital, international connections and also recognition from international buyers.
Sino-African cooperation has an unprecedented opportunity. According to the third industrial census, the number of people employed by the Chinese manufacturing industry was 124 million, of which 85 million were in labor-intensive processing industries. These industries are bound to provide a valuable opportunity for other countries with lower incomes, including African countries. To seize the opportunity, these countries should be equipped with the necessary infrastructure. The Belt and Road initiative can help with this.
Countries that have succeeded in the transition from reliance on agriculture to modern manufacturing have started with labor-intensive industries. As they become more developed, they move toward a more capital-intensive industrial structure and away from labor-intensive and low value-added industries. This means there is then a need for other countries to step in and provide labor-intensive industries, and this offers an opportunity for developing countries to catch up with others.
Against the background of China’s industrial transformation and the Belt and Road initiative, I hope that African countries will overcome the current obstacles to achieve their transition from agricultural societies to modern industrial societies.
The article was compiled based on a recent speech by Chinese economist Justin Lin Yifu at the Peking University Boya Forum.
Source: Global Times
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