Thursday, July 19, 2007

Rodrik on Kinds of Growth Spurts

Dani Rodrik compares Asian vs. African growth accelerations with respect to over- and under-valuation of the exchange rate. He explains:

"In Asia, growth is typically engineered by increasing the profitability in manufacturing and other tradables. But in Africa the typical growth spurt is preceded by aid inflows and other transfers, which appreciate the exchange rate, and render future growth less sustainable."
Read the whole thing here.

Substitute "remittances" for "aid" and it would appear that we are once again in the wrong continent.

2 comments:

Up n said...

India, the world's largest workers' remittance recipient country, accounted for 62.5% of the inflows to South Asia, while the Philippines accounted for 58% of remittances to East Asia and the Pacific in 2001.

Bangladesh, Pakistan, Philippines, Sri Lanka, and Thailand were also among the top 20 developing country recipients of workers' remittances in 2001.

All these figures are underestimates, as remittances are also sent home in unofficial ways.

Source: ADB
Microfinance Institutions Could Handle Overseas Workers' Remittances to Profit and Help the Poor
By Ian Gill

MANILA, PHILIPPINES (30 June 2003)

cvj said...

Hi UPn, thanks. Sometime back, I also read somewhere that China is next only to India in terms of absolute size of remittances. Of course, they have other things going for them besides remittances, including a more developed local manufacturing base, which is why they are growing much faster than us.