I. Patterns Economic Development in Africa

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1 ECON 184 I. Patterns Economic Development in Africa ECON 184: Patterns of Econ. Dev. January 7,

2 1 Trivia 1. Name this President ECON 184: Patterns of Econ. Dev. January 7,

3 Answers ECON 184: Patterns of Econ. Dev. January 7,

4 Contents 1 Trivia 2 2 Background Political division Colonial legacy Geography Africa today Population Africa s resources Africa s economic patterns Same continent, different stories ECON 184: Patterns of Econ. Dev. January 7,

5 3.5 Development beyond income Why? Trends Poverty and income distribution ECON 184: Patterns of Econ. Dev. January 7,

6 2 Background ECON 184: Patterns of Econ. Dev. January 7,

7 2.1 Political division ECON 184: Patterns of Econ. Dev. January 7,

8 African countries ECON 184: Patterns of Econ. Dev. January 7,

9 ECON 184: Patterns of Econ. Dev. January 7,

10 2.2 Colonial legacy ECON 184: Patterns of Econ. Dev. January 7,

11 Africa in 1912 ECON 184: Patterns of Econ. Dev. January 7,

12 ECON 184: Patterns of Econ. Dev. January 7,

13 2.3 Geography ECON 184: Patterns of Econ. Dev. January 7,

14 Deserts, Mountains and plateaus ECON 184: Patterns of Econ. Dev. January 7,

15 Deserts, Mountains and plateaus (cont.) ECON 184: Patterns of Econ. Dev. January 7,

16 Precipitation ECON 184: Patterns of Econ. Dev. January 7,

17 A mixture of cultures (e.g. languages) ECON 184: Patterns of Econ. Dev. January 7,

18 3 Africa today ECON 184: Patterns of Econ. Dev. January 7,

19 3.1 Population ECON 184: Patterns of Econ. Dev. January 7,

20 Low population density ECON 184: Patterns of Econ. Dev. January 7,

Africa s population and the world Total Population Produced by the SASI group (Sheffield) and Mark Newman (Michigan) In Spring 2000 world population estimates reached 6 billion; that is 6 thousand

21 Africa s population and the world Total Population Produced by the SASI group (Sheffield) and Mark Newman (Michigan) In Spring 2000 world population estimates reached 6 billion; that is 6 thousand million. The distribution of the earth s population is shown in this map. India, China and Japan appear large on the map because they have large populations. Panama, Namibia and Guinea-Bissau have small populations so are barely visible on the map. Population is very weakly related to land area. However, Sudan, which is geographically the largest country in Africa, has a smaller population than Nigeria, Egypt, Ethiopia, Democratic Republic of Congo, South Africa or Tanzania. Land area Technical notes Data source: United Nations Development Programme, 2004, Human Development Report. Population data is from 2002 The population not included is estimated as 2 to 3 million (see Appendix map 2). See website for further information. MOST AND FEWEST PEOPLE Rank Territory Value Rank Territory Value 1 China Saint Kitts & Nevis 42 2 India Monaco 34 3 United States Liechtenstein 33 4 Indonesia San Marino 27 5 Brazil Palau 20 6 Pakistan Cook Islands 18 7 Russian Federation Nauru 13 8 Bangladesh Tuvalu 10 9 Japan Niue 2 10 Nigeria Holy See 1 millions thousands Out of every 100 persons added to the population in the coming decade, 97 will live in developing countries. Copyright 2006 SASI Group (University of Sheffield) and Mark Newman (University of Michigan) Regional population (millions) The size of each territory shows the relative propotion of the world s population living there WORLD POPULATION BY REGION Year Hania Zlotnik, 2005 Map 002 ECON 184: Patterns of Econ. Dev. January 7,

22 3.2 Africa s resources ECON 184: Patterns of Econ. Dev. January 7,

23 Exports: minerals, agriculture,... ECON 184: Patterns of Econ. Dev. January 7,

24 ...but also humans ECON 184: Patterns of Econ. Dev. January 7,

Refugee Origin Produced by the SASI group (Sheffield) and Mark Newman (Michigan) In 2003 there were 15 million refugees and internally displaced persons in the world.

The difference between refugees and internally displaced persons is that the former are outside their territory of origin, whilst the latter have stayed within national borders.

25 Refugee Origin Produced by the SASI group (Sheffield) and Mark Newman (Michigan) In 2003 there were 15 million refugees and internally displaced persons in the world. This map shows the origins of both combined. The origins are the territories these people came from. The difference between refugees and internally displaced persons is that the former are outside their territory of origin, whilst the latter have stayed within national borders. The movement of these people is based on their fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion (UNHCR, 1951). Land area Technical notes Data source: United Nations Development Programme, 2004, World Development Report. Data are from Refugees and internally displaced people are included here. See website for further information. ORIGIN OF REFUGEES AND INTERNALLY DISPLACED PERSONS Rank Territory Value Rank Territory Value 1 Serbia & Montenegro Puerto Rico Bosnia Herzegovina Colombia Iraq Sri Lanka Afghanistan Angola Azerbaijan Western Sahara Gaza Strip & West Bank Sudan Burundi Liberia Georgia Sierra Leone Bhutan Tajikistan Croatia Mauritania 0.9 refugees and internally displaced persons as a % of resident population It is awful to leave your country family and friends, your job everything all of your memories of life is there you have to leave everything. Akram, 2005 Copyright 2006 SASI Group (University of Sheffield) and Mark Newman (University of Michigan) thousands of internally displaced persons (bottom), and refugees (top) Territory size shows the global proportion of refugees and internally displaced persons originating there Central Africa Southeastern Africa Northern Africa Southern Asia Asia Pacific ORIGINS Middle East Eastern Asia South America Eastern Europe North America Western Europe Japan Map 014 ECON 184: Patterns of Econ. Dev. January 7,

26 Minimal infrastructure ECON 184: Patterns of Econ. Dev. January 7,

27 3.3 Africa s economic patterns ECON 184: Patterns of Econ. Dev. January 7,

Small player in the world economy Purchasing Power Produced by the SASI group (Sheffield) and Mark Newman (Michigan) Purchasing power is a measure of what can be bought in the territory in which that

28 Small player in the world economy Purchasing Power Produced by the SASI group (Sheffield) and Mark Newman (Michigan) Purchasing power is a measure of what can be bought in the territory in which that money is earned. It is cheaper to live in some places than others. Taking differences in local costs into consideration, this map shows that 46% of world wealth adjusted for purchasing power is in North America and Western Europe. The regions with the most purchasing power per person are North America, Japan and Western Europe. Despite the lower prices found in Central Africa, the people living there still have the lowest purchasing power. The proportion of world wealth found in Central Africa is greater when measured in purchasing power than when measured using exchange rates. Land area Technical notes Data are from the United Nations Development Programme s 2004 Human Development Report. Gross Domestic Product is measured in Purchasing Power Parity (PPP) US$, thus PPP US$1 has the same purchasing power in every territory. See website for further information. HIGHEST AND LOWEST INCOMES WHEN ADJUSTED FOR PURCHASING POWER Rank Territory Value Rank Territory Value 1 Luxembourg Zambia Norway Niger Ireland Ethiopia United States Madagascar Denmark Guinea-Bissau Switzerland Dem Republic Congo Equatorial Guinea Burundi Iceland United Republic of Tanzania Canada Malawi Austria Sierra Leone 520 Gross Domestic Product adjusted for purchasing power parity in US$ per person 2002 The PPP rate is the exchange rate which would mean that the money you exchange would buy exactly the same basket of goods in both countries... Copyright 2006 SASI Group (University of Sheffield) and Mark Newman (University of Michigan) GDP in US$ purchasing power parity per person per year, in thousands Territory size shows the proportion of worldwide wealth found there when GDP is adjusted for local purchasing power DISTRIBUTION OF PURCHASING POWER Central Africa Southeastern Africa Northern Africa Southern Asia Asia Pacific Middle East Eastern Asia South America Eastern Europe North America Western Europe Japan Biz/ed, 2006 ECON 184: Patterns of Econ. Dev. January 7, Map 170

29 SSA and EAP ECON 184: Patterns of Econ. Dev. January 7,

30 GDP per capita (constant dollars) year Sub-Saharan Africa East Asia and Pacific ECON 184: Patterns of Econ. Dev. January 7,

31 SSA and other developing countries Figure 1.1. Comparative per Capita Income Growth Paths: Sub-Saharan Africa vs. Other Regions GDP per capita index, 1960= East Asia & Pacific Low income Sub-Saharan Africa ECON 184: Patterns of Econ. Dev. January 7,

32 Table 1.1. Regional Growth Comparisons Region N Real GDP per capita (1996 PPP$) Gross primary enrollment rate, 1960 SSA (23) Other developing (25) LAC (6) SA (1) EAP (7) MENAT (11) INDUST (16) Initial values Ending values Endowments Gross Life Road primary Life Frag- Share of expect- density, enrollment expect- menta- pop in ancy at 1969 (km Real ancy at Road tion, llocked birth, per sq GDP per rate, birth, density, Avg. # of countries 1962 km)* capita borders (%) Share of Natural Resource Econ** a b Source: World Development Indicators, Note:* Number of countries in parentheses. a: Congo, Dem. Rep., Sudan and Ethiopia have been treated as landlocked countries. b: Only one country sampled, Turkey. The average is Middle East and North Africa is zero. ** An economy which generates more than 10% of its GDP in primary commodities exports is classified as a natural resource economy. This is calculated as a share of the total number of countries in each region. ECON 184: Patterns of Econ. Dev. January 7,

33 3.4 Same continent, different stories Figure 2.6. Smoothed Average Growth in Real GDP per Capita Nigeria Dem. Rep. of Congo year year Botswana Mauritius year year Source: WDI 2006, PWT 6.1 and GDN ECON 184: Patterns of Econ. Dev. January 7,

34 Different trends Income Per Capita PPP adjusted, 1996 international $ Mauritius Côte d'ivoire year 1624 Source: WDI 2006, PWT 6.1 and GDN ECON 184: Patterns of Econ. Dev. January 7,

35 ...despite proximity Income Per Capita PPP adjusted, 1996 international $ Botswana Zambia year 902 Source: WDI 2006, PWT 6.1 and GDN ECON 184: Patterns of Econ. Dev. January 7,

36 3.5 Development beyond income ECON 184: Patterns of Econ. Dev. January 7,

37 Human Development Index (HDR 2009) H: Human development index 2007 and its components Human development index value Life expectancy at birth (years) Adult literacy rate Combined gross enrolment ratio in education (% aged 15 and above) (%) (PPP US$) Education index GDP index GDP per capita rank minus HDI rank b HDI rank a VERY HIGH HUMAN DEVELOPMENT 1 Norway c 98.6 d 53,433 e Australia c d,f 34, Iceland c 96.0 d 35, Canada c 99.3 d,g 35, Ireland c 97.6 d 44,613 e Netherlands c 97.5 d 38, Sweden c 94.3 d 36, France c 95.4 d 33, Switzerland c 82.7 d 40, Japan c 86.6 d 33, Luxembourg c 94.4 h 79,485 e Finland c d,f 34, United States c 92.4 d 45,592 e Austria c 90.5 d 37, Spain i 96.5 d 31, Denmark c d,f 36, Belgium c 94.3 d 34, Italy j 91.8 d 30, Liechtenstein k.. c 86.8 d,l 85,382 e,m New Zealand c d,f 27, United Kingdom c 89.2 d,g 35, Germany c 88.1 d,g 34, Singapore j.. n 49,704 e Hong Kong, China (SAR) o 74.4 d 42, Greece j d,f 28, Korea (Republic of) c 98.5 d 24, Israel l 89.9 d 26, Andorra k.. c 65.1 d,l 41,235 e,p Slovenia c,j 92.8 d 26, Brunei Darussalam j ,200 e GDP per capita Life expectancy index ECON 184: Patterns of Econ. Dev. January 7,

38 H: Human development index 2007 and its components Combined gross enrolment ratio in education Human development index Life expectancy at birth Adult literacy rate GDP per capita Life value (years) (% aged 15 and above) (%) (PPP US$) expectancy index Education index GDP index HDI rank a LOW HUMAN DEVELOPMENT 159 Togo y Malawi j 61.9 d,g Benin j 52.4 d,g 1, Timor-Leste ae 63.2 d,g 717 q Côte d'ivoire y 37.5 d,g 1, Zambia j 63.3 d,g 1, Eritrea j 33.3 d,g 626 q Senegal i 41.2 d,g 1, Rwanda y 52.2 d,g Gambia o 46.8 d,g 1, Liberia j 57.6 d Guinea y 49.3 d 1, Ethiopia i Mozambique j 54.8 d,g Guinea-Bissau j 36.6 d,g Burundi y Chad j 36.5 d,g 1, Congo (Democratic Republic of the) y Burkina Faso i , Mali i , Central African Republic y 28.6 d,g Sierra Leone j 44.6 d Afghanistan y 50.1 d,g 1,054 d,ag Niger i GDP per capita rank minus HDI rank b ECON 184: Patterns of Econ. Dev. January 7,

39 ECON 184: Patterns of Econ. Dev. January 7,

40 HDI summary H: Human development index 2007 and its components Combined gross Human Life enrolment development expectancy Adult literacy ratio in GDP per index at birth rate education capita Life (% aged 15 expectancy Education value (years) and above) (%) (PPP US$) index index GDP index HDI rank a Africa af 63.3 af , Asia af 82.1 af , Europe af 99.2 af , Latin America and the Caribbean , Northern America af 96.5 af Oceania af 93.0 af Arab States , GCC , Central and Eastern Europe and the CIS , CIS , East Asia and the Pacific , Latin America and the Caribbean(UNDP RB) , South Asia , Sub-Saharan Africa , OECD , European Union (EU27) , Very high human development , Very high: OECD , Very high: non-oecd , High human development , Medium human development , Low human development World af 83.9 af , ECON 184: Patterns of Econ. Dev. January 7,

41 3.6 Why? ECON 184: Patterns of Econ. Dev. January 7,

42 Conflicts are a common theme in Africa ECON 184: Patterns of Econ. Dev. January 7,

43 ...but also diseases Malaria risk , 1966, 1994 Tropic of Cancer Tropic of Capricorn High risk of Malaria ECON 184: Patterns of Econ. Dev. January 7,

44 Remoteness ECON 184: Patterns of Econ. Dev. January 7,

45 THE WORLD BANK ECON 184: Patterns of Econ. Dev. January 7,

46 Institutions? Democracy and Income, 1990s Freedom House Measure of Democracy ZAR TZA ETH MWI GNB UGA BDI MDG MLI ZMB MOZ G05 G02 RWA BEN CAF GMB SLE TGO SDN STP MNG BGD NPL GHA LSO HTI G03 G01 LAO VNM SEN COM GNQ HND IND NIC PAK COG DJI CIV CMR BTN BOL ALB GIN CHN CPV PNG PHL GUY LKA ZWE JAM ECU G07 GTM JOR MAR EGY IDN SYR NAM ROM PER G04 IRN G11 G12 PAN COL PRY FJI TUN SWZ CUB LTU G09 LVA BGR G08 THA TUR G10 EST CHL ZAF RUS MEX G06 G13 G14 G15 G16 G17 G18 MUS ISR BHS JPN ARG KOR TWN ATG SYC SGP KWT OMN BHR SAU QAT LUX Log GDP per Capita (Penn World Tables) See Appendix Table A1 for data definitions and sources. Values are averaged by country from 1990 to GDP per Capita is in PPP terms. The regression represented by the fitted line yields a coefficient of (standard error=0.019), N=147, R 2 =0.35. The "G" prefix corresponds to the average for groups of countries. G01 is AGO and MRT; G02 is NGA and TCD; G03 is KEN and KHM; G04 is DZA and LBN; G05 is BFA, NER, and YEM; G06 is GAB and MYS; G07 is DOM and SLV; G08 is BRA and VEN; G09 is BWA, DMA, POL, and VCT; G10 is HUN and URY; G11 is CRI and GRD; G12 is BLZ and LCA; G13 is KNA and TTO; G14 is GRC and MLT; G15 is BRB, CYP, ESP, and PRT, G16 is FIN, GBR, IRL, and NZL; G17 is AUS, AUT, BEL, CAN, DEU, DNK, FRA, ISL, ITA, NLD, NOR, and SWE; and G18 is CHE and USA. ECON 184: Patterns of Econ. Dev. January 7,

47 Aid? Source: Moss (2007) ECON 184: Patterns of Econ. Dev. January 7,

48 3.7 Trends Compare: Nigeria, Ghana, Botswana and South Africa. 3.8 Poverty and income distribution Gapminder: ECON 184: Patterns of Econ. Dev. January 7,

49 Sources Most maps come from Fancy maps from Railways and exports: Cooper, F. (syllabus.) Malaria: Sachs et. al. (syllabus.) Conflict: The Economist. Tables and graphs: Ndulu et. al. (syllabus) Democracy and Income from Acemoglu et al (2008) AER. Tables and 3.1 from Nnadozie (2003) ECON 184: Patterns of Econ. Dev. January 7,

I. Patterns Economic Development in Africa

ECON 184 I. Patterns Economic Development in Africa ECON 184: Patterns of Econ. Dev. March 31, 2009 1 1 Trivia 1. How many countries are in Africa? 2. Most populated country in SSA? 3. Richest country?.