The large number of migrants from conflict zones are arriving in Europe is expected to increase. Three factors appear to be the primary determinants of the flow: 1. severity of violence in areas of migrant origination, 2. proximity to areas of relative economic opportunity and 3. the economic means of the migrants. I apologize if this is intuitively obvious, but I want to focus on Sub-Saharan economic growth, job creation and the link to migration, even if most of these migrants do no originate from Africa. This post was also spurred by an email from a colleague who shared an IMF regional economic outlook report with an analysis of population age and job growth. The report was cautiously optimistic indicating that as the wealthier economies see their workforce age, their percentage of workers in key age brackets will decrease while Africa will see the number of workers in these age brackets continue beyond 2030. The period 2035-2060 projects Africa to be the only region adding significant numbers to the global workforce. The research underlines that trade and economic integration create an opportunity for African economies to increase per capital GDP. Policies and actions are needed by governments to assure outcomes on the more positive side. Sub-Saharan GDP growth is highly dependent on commodity prices. Linkages between extractive industries and indigenous businesses of all sizes are inadequate to create the number of jobs needed. Along with developing these linkages, other sources of economic growth that are needed: more productive jobs in manufacturing and services. Can countries in a commodity-dependent economy make the sustained, huge public investments needed to turn finite resources into more permanent resources? Can they “turn” gold, oil, land and water into more infrastructure and a better educated, healthier workforce fast enough? This is the prerequisite for achieving inclusive growth, and having the growing ranks of the African workers benefit from trade and economic integration in ways other than looking for the exits….
Growth poles have captured the imagination of the World Bank. The concept presents a framework upon which many of the Bank’s private sector development activities are designed. Like good frameworks for understanding private sector growth, economic development or the industrialization of countries, the concept is flexible and lends itself to tremendous diversity in its application from agricultural production and transformation zones like at Bagré in Burkina Faso all the way to the post-modern special economic zones of Southeastern China (Shenzhen, Zhuhai, all the rest…). The next growth pole being developed in Burkina Faso will be the Sahel Growth Pole in a region known for its gold mines and its animal husbandry sector.
At the Bank, our private sector development focus in Burkina Faso concerns helping the government develop growth poles around tangible and intangible assets in well defined geographic areas. The Bagré Growth Pole is being developed around a 16MW hydroelectric dam. There is the potential to put 10,000-20,000 hectares under irrigation. We are financing irrigation and other economic infrastructure in the zone.
I am also developing another growth pole operation in the North/Sahel region.
I am leaving Almaty, and as I’ve accepted a position as the World Bank’s Senior Private Sector Development Specialist in Burkina Faso.
Almaty, July 31, 2012. The last photo...
In three years, Kazakhstan has a short distance to go to accede to the WTO. This will surely occur as Russia has become a member. The external tariffs will decrease below the current EurAsEC Customs Union levels.
Regional economic integration still faces challenges that keep broad-based, diversified economic growth from happening. Uzbekistan needs to adopt a liberal economic agenda for this to happen. Tajikistan and Uzbekistan’s poor relations need to improve. In the near term, I sense that some Central Asian countries have a taste to pursue negotiated regimes with large trading partners on a bilateral basis. Hopefully, policies will not adopt a “whatever comes to mind” approach, and increasingly embrace rule-based systems with proven economic benefits.
USAID’s economic development work in Central Asia is increasingly focusing on integrating Afghanistan into world markets via Central Asia or with Central Asian markets as an end unto itself.
Burkina Faso has some similar problems as a landlocked country dependent on its neighbors for reaching markets and a reliance on commodities. I will post more when I arrive….
That is the question. It was put to me several times over the last few months as colleagues sought the best chance for integrating Afghanistan with larger neighboring markets: China, India, Pakistan, Russia, Kazakhstan etc. Looking at the pace of improvements in economic integration in Central Asia, I am hesitant to commit to one corridor or another. The pace of regional economic integration, improvements in supply chain performance and the modernization of how countries in the region trade evidences irregular progress over the past 10 years. The countries governments and capacity to reform are diverse, despite the need for similar kinds of reforms across South and Central Asia. Running trade facilitation projects in Central Asia has proved that opportunities need to be taken when and where they appear. Is one action going to encourage a major investment in transport infrastructure? Is the new chairman of Customs in Uzbekistan a reformer willing to speed up clearance of goods in and out of the Termez crossing? These incidences are difficult to predict, but, most often, are the drivers progress in areas like implementation of Single Window systems for import/export, adoption of best practices in border management, decreasing delays for transit cargoes and putting in place new systems that help Central Asian businesses make more money.
Corridors 5 and 6 are references to specific transport corridors on with the Central Asia Regional Economic Cooperation Program focuses.
I’ve been busy running the Regional Economic Cooperation Project for USAID/Central Asia since I returned from India. The project is putting on some big trade facilitation events over the next couple of months. More hard-hitting analysis of how to implement economic reforms, global climate change and all things multilateral, financial and Central Asian to follow…
Morning Delhi Street Scene
USAID Central Asia's Export Partnership Initiative
A colleague and I wrote remarks for the the ADB CAREC Senior Officials Meeting in November 2011. He delivered our remarks while I sureptitiously filmed on my Dell Streak 5. I am an enthusiast of the ADB’s CAREC program as it has been reasonably effective at getting Central Asian countries to discuss economic cooperation issues: trade facilitation and policy, transport and power sector development. Approximately $2o billion in infrastructure investments will have been made within the cadre of CAREC by 2020.
Efforts at regional cooperation and economic integration move slowly in Central Asia. Some countries appear openly hostile to these concepts with political decisions taking precedence over those certain to increase the wealth of citizens of CAREC member countries. The Regional Trade Liberalization and Customs Project that I managed for USAID until the project’s close in September 2011 worked with public organizations like customs services, ministries of trade and associations of freight forwarders and logistics service provides. We created a lot of research on trade facilitation and trade policy matters. Hopefully, these considerable intellectual output of the project will continue to be available online. I collaborated closely with CAREC and other donors like the World Bank and GiZ in the implementation of this project, as well as with enthusiastic Central Asians in the public organizations. There are many angles of pushing regional economic cooperation in Central Asia that are possible such as integrated border management, facilitating supplier/customer relationships between Central Asian firms, pre-customs data exchange and implementation of transit cargo regimes between countries. Single Window systems are necessary to decrease the cost and time for moving goods across borders.
When I get to the office on Monday, I will continue working on new projects that collaborate with Central Asian businesses to help them network and find solutions to export-related problems. These include finding and booking lower cost transport services, finding trade financing, developing joint ventures with CAR businesses. These efforts will result in new customer/supplier relationships among Central Asian firms, stronger trade support organizations, joint ventures and new investment.
The competitiveness of partner firms will improve.