Photo Jonathan Blair

Thursday, February 4, 2016

Development experts' heads are stuck in the manufacturing sand

Try to forget industrialization: it's essentially over and it won't happen again. The challenge is to grow rich and not too unequal with service economies.

When you have time (it is 46 minutes-long), check this podcast from Brookings, which features one of their fellows, John Page, a former Chief Economist for Africa at the World Bank. Its hook is that about 85 million of China's "bottom-end" manufacturing jobs will have migrated away by 2030 and that Africa's challenge is to capture as many of those jobs as possible. The point is to plug a book by Brookings, UNU-WIDER and the African Development Bank called "Learning to Compete in Industry."

Now, in 2030, there will be 1.6 bn people in Africa, about half of whom will be older than 15 years old. Among the latter, assuming participation rates similar to todays (70-80%), the region's labour force will be about 600 million strong. This means that while 85 million jobs look like a lot, if Africa were to capture ALL OF THOSE JOBS--an extremely unlikely outcome--that would still represent only 13% of the region's labour force. Adding those jobs to the current paltry levels of industrial employment, in other words, would just not make African countries "successful industrializers." Most likely, in fact, these economies will morph—some already have—from mining and agricultural primary goods producers to service economies, without the historically "standard" industrial episode in the middle.

This study, in other words, like much of current development scholarship, is stuck with the assumption that development and industrialization are synonymous and that the first simply will not happen without the second.

Obviously, that assumption may be right, but if it is, Africa is doomed.  because the very evidence mentioned by promoters of industrialization makes it clear that industrialization on any significant scale will not happen in the region. At the very least, however, we should check, which we are not doing, in spite of all our ritual evocations of "evidence-based" research.

What we may find once we start looking may not be that depressing, by the way. Indeed, there is no theoretical reason why service economies can't become more productive. The most compelling explanation of growth today--endogenous growth--sees ideas as its core driver. Why should ideas only impact productivity in the manufacturing sector? Or, from a research perspective, why should we keep thinking of development as if it could only happen as it did in the past, both old, in the West and Japan, and recent, in China?

Oh, and by the way, the industrialization mirage is not just misleading for Africa, it is even more of an illusion for countries—hello Canada—that have long ago become service economies.

To repeat, the challenge is not to find a time machine to reach back to the 1950s (and call it a "revolution") when the path to industrialization crossed indeed manufacturing land, but to see how service economies can deliver reasonably equitable growth in developing countries.

Wednesday, February 3, 2016

Can Brazil's Olympics survive the Zika emergency?

Nearly overnight, the Zika virus has caught the world’s attention. Will Brazil be able to ease concerns before August?

Jean Daudelin

Three recent developments are changing the Zika crisis: global media awareness, new possible vectors, and doubts — at the epicentre of the crisis — about Brazil's capacity and honesty. Together, they threaten the upcoming Rio Olympics.

At the end of November 2015, I peddled a piece about the Zika/microcephaly crisis that was already severe in Recife, the large Northeastern Brazilian city where I am currently working. No one but this site,, would have it: not the Globe, not the Huffington Post, not Foreign Policy, no one else. Worse still, it took a few more weeks for the global media to catch up: the New York Times, measure of "all things fit to print," published its first piece on Dec. 29.

Today, Zika is front-page news every day the world over. This is mostly good as it keeps prodding governments and the increasingly nimble global infectious disease community. As usual, the danger is that, were the epidemic to be less serious than currently speculated, the overblown coverage could lead to public cynicism and, subsequently, less urgency from politicians, less money for research, and public nonchalance when a truly severe one hits: call this the "swine flu" scenario. Fortunately, public health organizations and experts have become very adept at balancing warnings with caveats. In the face of global infectious diseases, panic is not the default mode any more.

The second development is only bad, as researchers — still tentatively — point to new vectors for the disease. Until now, the Aedes family of mosquitos (aegypti and albopictus) were considered the only culprits, which is already scary given the global distribution of those bugs. Now, however, there is a growing worry that their Culex cousins, who reach farther North and South could also be infected and in turn infect the people they bite. Culex is the family of your "friendly" spring and summer mosquito, but also of the West Nile Virus vector. In addition to expanding the potential range of the infection, this would imply a significant increase in vulnerability as, unlike Aedes aegypti, which is still the main apparent culprit for Zika, many Culex mosquitoes are active in the evening and at night. Perhaps most worrying, there is growing evidence that Zika could be sexually transmitted, thus turning your sexual partners, just back from a trip in the South, into a potential vector even in the middle of Winter, and we don't know yet for how long.

There is no real flip side to the third development either, with growing doubts about Brazil's capacity to deal with the crisis and, most worryingly, to honestly tell the world how bad things are. In the last week or so, both Brazil's Health Minister and President Dilma Rousseff have said that the battle against the mosquito was being lost. Rousseff's declaration was framed as a call to arms, but without a single good news on the eradication front, and with Brazilian microcephaly statistics showing growth rates of five to seven percent per week in suspected cases, one is compelled to take her statement literally.

Worse still, the states of São Paulo and Rio, which are crucial to the national effort, appear to be less than candid about the local scale of the problem. El País revealed recently that the government of São Paulo had lied about the number of microcephaly cases on its territory, not reporting 200 cases and thus conveying the impression that the epidemic was largely confined to the poor Northeast of the country. The fact that Rio is currently refusing to test Olympic waterways for viral infection, while not directly Zika-related, nonetheless conveys a worrying lack of transparency about health risks.

Behind Rio's reluctance, obviously, lies the nightmarish scenarios of an Olympic Games participation disaster or of an unprecedented cancellation of the event. Brazil is clearly lobbying hard to save the Games, but its very efforts reinforce global skepticism: as reported by the New York Times, when the WHO declared Zika a global health emergency earlier this week on Feb. 1 but refused to follow the US Centre for Disease Control and recommend that pregnant women avoid countries where Zika is endemic, "some global health experts contended the W.H.O.’s decision was more about politics than medicine."

In the end, full transparency or deceptive manoeuvring of that sort may not matter much: given the massive press coverage Zika currently receives, the tremendous platform the Olympics would provide for the diffusion of the virus, and the increasingly clear inability of Brazilian authorities to get a grip on the epidemic, many countries may follow New Zealand's lead and, at the very least, support those athletes who decide to stay home. Now, this only makes things worse: a public relations disaster for Brazil, it will increasingly suck up government attention and efforts. All-out cancellation would probably be better: with Olympic distraction out of the picture, all energies could focus on the mundane jobs of eradication, vaccine development, and care for the poor kids who end up crippled by the disease.

[This post was first published by]