2014-african-transformation-report

30African Transformation Report 2014 | Tracking economic transformationInterest ineconomictransformationultimately stemsfrom its potentialTable 1.1to improvepeople’s livesrising in the comparator countries,the opposite has been true in Africa.Another way of looking at the evolutionof the technology of exportsis to focus on the top 10 exportsof individual countries. In the comparatorcountries the general trendhas been for the top 10 to be transformedfrom primary, resourcebased,and low technology—tomedium and high technologyexports. In Sub- Saharan countriesthis transformation has yet to occur(table 1.1).H—human economic well-beingInterest in economic transformationultimately stems fromits potential to improve people’slives. Human well-being is abroad and complex topic involvingmany factors, including percapita incomes; employment;poverty; inequality in incomeand wealth; access to affordablehealth care, education, and othersocial services; equal economicSub- Saharan Africa—stuck in low-technology exportsTechnology exports over time—Sub- Saharan Africa versus comparator countriesPrimaryproductionopportunities for all; genderequality; justice; peace; security;the environment; and so on. TheUnited Nations Development Programme’sHuman DevelopmentIndex tracks human well-beingusing a broad range of variables.Here, we confine ourselves to variablesclosely related to economictransformation.GDP per capita and the share offormal employment in the laborforce are summary indicators ofhuman economic well-being associatedwith economic transformation.High rates of economic growth(given the rate of populationgrowth) lead to higher levels of GDPper capita. A high GDP per capitaindicates that the economy couldin principle support each citizenat a high income. 11 Whether theincome is widely shared, however,depends on the nature of economicgrowth and factor payments, theunderlying distribution of assetsand political power, and the socialTop 10 exports in 1976 Top 10 exports in 2010ResourcebasedLowtechnologyMediumtechnologyHightechnologyPrimaryproductionResourcebasedLowtechnologyBrazil •• ••••• •• • •••• •••• ••Chile •• •••••••• • •••••••• •MediumtechnologyHightechnologyMalaysia ••• •••••• • •••• • •••••Korea, Rep. • •••••• •• • •• • •••• •••Singapore • •••• ••• •• • ••• ••••••Thailand ••••• •• • •• •• •• •••• ••Burkina Faso •••••••• •• ••••••• •••Cameroon •••• ••••• • ••••• •••••Ethiopia •••••••• •• ••••••• •• •Kenya •••• •••••• •••• ••••• •Mauritius • ••• •••••• • ••• ••••••Senegal ••••• ••••• •• ••••••• •Zambia •• •••••• • • •• ••••••• •Note: For countries where commodity values for 1976 or 2010 were not reported, commodity values were replaced with the nearestlagged or forward value, but not more than four years away from the missing year.Source: UN Comtrade, Revision 2, Digit 3 (using ACET’s reclassification based on Lall’s Classification of Commodity Exports).policies of the country. But a highrate of well remunerated employmentis the most effective way fora high GDP per capita to translateinto improvement in people’s lives.If opportunities for well remuneratedemployment (in jobs or self-employment)are expanding withrising GDP per capita, economicgrowth will be inclusive, prosperitywill be widely shared, and povertyand inequality will be reduced.GDP per capita. The trend in GDPper capita in Africa over the 40years since 1970 leaves much to bedesired. By 2010 GDP per capita inSub- Saharan Africa was only about60 percent higher than in 1970(1.6 times the level in 1970). TheACET 15’s performance was a bitbetter: GDP per capita was slightlymore than double (2.3 times) thelevel in 1970. In stark contrast, GDPper capita in the comparator countriesin 2010 was five times the levelin 1970 (figure 1.2k). 12 But note theslow yet steady increase in Africasince 1995. Reflecting the pickup,poverty in Sub- Saharan Africa,though still high, came down from59% in 1990 to 48% in 2010 (from25% to 9% for the comparators) andis set to fall to 42% by 2015. 13Employment. If an economy istransforming, we would expectto see more of the labor force informal employment as the sharesof modern agriculture, manufacturing,and high-value servicesin GDP expand and as entrantsto the labor force become moreeducated. So the share of formalemployment (whether in jobs orself-employment) in the labor forceis a reasonable measure to trackthe employment impact of economictransformation. 14 It encapsulatesthe goal of raising the rate ofemployment as well as formalizingor modernizing it. 15The problem is that many Africancountries do not have good dataon employment. Labor surveys are