Economic History That Africa Must Not Repeat: The Economic Success of the Asian Tigers Is Often Held Up as an Example to Africa, but as Dr Lawrence Akwetey Writes Here, Africa Should Study the History of the near Collapse of the Asian Tigers in 1997 in Order Not to Repeat Their Sad Ordeal

By Akwetey, Lawrence | New African, October 2005 | Go to article overview

Economic History That Africa Must Not Repeat: The Economic Success of the Asian Tigers Is Often Held Up as an Example to Africa, but as Dr Lawrence Akwetey Writes Here, Africa Should Study the History of the near Collapse of the Asian Tigers in 1997 in Order Not to Repeat Their Sad Ordeal


Akwetey, Lawrence, New African


After the G8 summit in Gleneagles and the deal on debt relief, the question that comes to the fore is whether such promises (sometimes backed by no action) constitute the real panacea for Africa's problems. Is it more aid or trade that Africa really needs?

[ILLUSTRATION OMITTED]

Debt, aid and trade promises have been made to Africa many times before; in fact, some of the promises remain unfulfilled until they are topped up with yet more promises.

But whether these promises are fulfilled or not, fundamental rudiments of development economics say that until Africa is able to embark on a "staged model of economic development", nothing much will happen to the continent. There are five stages involved in this model which, incidentally, have been used by both Western and East Asian countries to reach where they are today.

The first stage is Foreign Direct Investment (FDI). Traditional African society suffers from a weak capital base and static economy. Tons of aid, debt relief or trade concessions will not provide the needed capital base or scientific approach to production in Africa. There is also insufficient domestic savings from either individuals or governments to undertake the size of infrastructure upgrade and capital formation to make the establishment of modern factories possible.

The only way is for African countries to re-double their efforts in attracting significant FDI. The process is described by development economists as a "Large Scale Internationally Managed Support System" (LSIMSS). This has been hugely successful in Malaysia and Singapore.

This also worked for Western Europe and Japan during the post-war period when $400bn, in today's money, was made available to them under the US-assisted Marshall Aid plan. Why can't the G8 countries do the same for Africa instead of the over-publicised debt relief deal? If it worked for Japan and Western Europe, transforming them into manufacturing giants, why bother using aid or debt relief, which will not help build a single modern manufacturing plant, as a panacea for Africa's economic development woes?

The second stage is "economic take-off". In traditional African society, the pre-conditions for economic take-off require technical application of the sciences (technology and skills). There must also be new political structures (political stability) and good infrastructure to attract FDI in sufficient quantities to enhance economic production.

FDI has enormous potential for helping the accelerated development of various sectors of a country. In Ghana, for example, when the Akosombo Textiles factory was established in the 1960s through FDI, the company built a hospital for both workers and residents of the Akosombo township.

It also improved the existing infrastructure or built new ones altogether--roads, water supply, communication, electricity, etc. It also established social facilities such as golf and sports centres for the community. It even built a football team from scratch, Akotex, which played in the country's premier league, and did very well for many years. Most importantly, the company provided thousands of jobs, paid corporation tax to the government and produced manufactured goods for domestic consumption and export. This is the way, in my opinion, to tackle poverty and economic stagnation in Africa. Imagine if Ghana had 100 more of such FDI projects around the country? This is what Africa needs to substantially reduce poverty--not aid or debt relief.

The third stage is growth. With "take-off", growth becomes a normal condition as the powers of growth strengthen each other. There is higher formation of capital, increasing entrepreneurs' initiatives, and the political constellation is attuned to economic objectives. It surely is better for Africa's economic development than aid or debt relief.

The fourth stage is the "drive to maturity". For this to happen in Africa, it will depend entirely on technological support. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Economic History That Africa Must Not Repeat: The Economic Success of the Asian Tigers Is Often Held Up as an Example to Africa, but as Dr Lawrence Akwetey Writes Here, Africa Should Study the History of the near Collapse of the Asian Tigers in 1997 in Order Not to Repeat Their Sad Ordeal
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.