Commodities have been a major driver of Africa’s growth story in recent years. But you may be surprised to hear that natural resources could have contributed far more than they actually did to Africa’s 5% average GDP growth over the last decade. Although Africa’s primary sector has expanded, its global share of natural capital dropped from 11.5% in 1995 to 8.5% in 2005.

Though China has recently been a dominant force in trade and investment on the African continent, India and Korea are fast becoming serious challengers. How can African countries make more of these evolving trends? And what role can the traditional partners in the OECD area play?

The 2008 economic crisis shook up the landscape of financial flows to Africa and brought to the fore two major trends: an upsurge in foreign direct investment (FDI) and a parallel rise in remittances from abroad. Indeed, remittances outpaced both aid and FDI inflows with a compound growth rate over the past decade of 7.7%.

The vision of a world without extreme poverty is not a utopia, but a reachable goal. Yet realising the vision demands that we meet urgent challenges, and that includes overhauling our development goals.

A local non-government organisation is supporting rural development in Orientale Province in the north-east of the Democratic Republic of Congo (DRC). Called ACIAR (Help for Intercultural Communication and Rural Self-help*), its plan is to revive the coffee sector in the Ituri region as an inclusive response aimed at repairing the social and economic damage caused by a conflict that lasted from 1998 to 2004.

Insecurity and conflict hinder human, and economic development. The Saharo-Sahelian region today presents some of the most daunting global security threats, which seriously undermine the stability and development of the region. The 2012-2013 crisis in northern Mali, though centred in one nation, epitomises the wider, cross-border dimension of these challenges. Here we point to some of the available policy responses towards their resolution.

Development efforts are often hampered by poor or non-existent data. While attempts are being made to address this, much more needs to be done to improve official data by developing countries themselves, particularly as new development goals are set for the post-2015 period.     

©G20 Russia 2013

The Russian Federation took over the G20 presidency on 1 December 2012, a time when all international organisations and countries had downgraded their growth forecasts for the year ahead. Against this background and the need for urgent and co-ordinated policy action to put the recovery back on track, we decided to refocus the G20 agenda on the issue of growth and jobs, and to work on very concrete actions and commitments for G20 leaders to discuss and possibly endorse at the Saint Petersburg summit in September 2013.

©Christian Charisius/Reuters

The world economy has become more complex, with global value chains and myriad interconnections among producers across continents. This has an impact on trade and investment policy, as well as on development, and exposes the shortcomings of the usual way of measuring trade.

Return from the dead?

Old ways of thinking won’t bring developed countries back to economic life. Weighed down by the legacy of the crisis, they also face deep challenges like a faltering labour supply and slowing innovation. 

More...

Click to enlarge

Will this be Asia’s century? When it comes to growth and social progress, there have been heady leaps forward, with every prospect of continued dynamism over the next five years. But according to the Southeast Asian Economic Outlook 2013, if there is a blot on the map, it is in tackling poverty and the wide development gaps that bedevil the continent.

Development aid fell by 4% in real terms in 2012, following a 2% fall in 2011. Though this decline must be reversed, it is not the only issue to address. Also being questioned is how that aid is measured in the first place. As Jon Lomoy explains, while it is high time to revisit the concept of official development assistance, the outcome of the discussion will influence the effectiveness of development policy over the next decade or more.

©Reuters/Jason Lee

Asia’s Challenges

The forces driving Asia’s rapid growth–new technology, globalisation, and market-oriented reform–are also fuelling rising inequality. Some income divergence is inevitable in times of fast economic development, but that shouldn’t make for complacency, especially in the face of rising inequality in people’s opportunities to develop their human capital and income-earning capacity.

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©DR

Trusting in crowds

“Crowdsourcing” pools the strength of the many to perform complex tasks–everything from funding a film to sequencing DNA. At its heart is trust–not a blanket belief in great institutions, but rather the confidence among individuals that each will do the right thing. Its power is being increasingly felt today, even in the world of international development.

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You paint a positive picture of Turkey’s economy in terms of growth of GDP and employment (OECD Observer No 290-91, Q1-Q2 2012). Nevertheless, the interview states that for the future of the Turkish economy, “labour market reform is key, especially to encourage the shifting of resources from the informal to the formal sector: a more flexible labour contract is needed and minimum wage setting should be decentralised”

Click to enlarge. By StiK, especially for the OECD Observer.

© REUTERS/Finbarr O'Reilly

With over 200 million people between the ages of 15 and 24–a figure that will double by 2045–Africa’s fast-growing population is the youngest in the world. In the coming decades, hundreds of millions of young Africans will pour on to the job labour market as they leave schools branding qualifications of various levels.

In May 2012 the OECD Ministerial Council endorsed the OECD Strategy on Development, describing it as an essential tool for adapting the organisation’s work to fast changing realities. What are the factors behind the new strategy and what are the aims? 

©Reuters/Finbarr O'Reilly

The OECD is cooperating with governments and companies to combat the scourge of conflict minerals and has issued a guidance that several African countries have endorsed. There are encouraging signs of progress.

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Aid from major donors in the OECD area to developing countries fell by nearly 3% in 2011, ending a long trend of annual increases: until 2011, aid had been increasing for more than a decade, and by 63% between 2000 and 2010, the year it reached its peak.

©Yannis Behrakis/Reuters

What can we do in the years to come to ensure food security? In the opinion of Action contre la Faim, a number of avenues could help promote secure access to food for everyone. 

Tackling the challenge to build well-functioning tax systems in developing countries requires concerted international co-operation among developed and developing countries, international organisations, business and civil society. 

In a relatively short time, microfinance has become a major tool of international development. But too many potential entrepreneurs still have little or no access to financing. Innovation and government policy have a central role to play in correcting this imbalance. 

©Reuters

Hunger affects about 1 billion people around the world, and as the economic crisis continues, the push for growth can actually make matters worse.

Marie Gad

In many African countries, where unemployment rates can run as high as 30%, there is strong potential for entrepreneurship and employment. Development must focus on bringing down the barriers to progress. 

Mario Pezzini

The increase in average incomes and the fall in levels of absolute poverty, in particular during the last decade, suggest that an increasing proportion of the world’s population is neither rich nor poor by national standards but finds itself in the middle of the income distribution. 

Cherie Blair ©OECD

Discrimination against women hurts everyone. As Founder of the Cherie Blair Foundation for Women Cherie Blair explains, women entrepreneurs are an economic resource that economies, rich and poor alike, can ill afford to overlook.

Speech by Hillary Clinton, US Secretary of State and Chair of the 2011 OECD Ministerial Council Meeting, at the commemoration of the 50th anniversary of the OECD, 25 May 2011.

There are signs of a new, more confident and self-affirming Africa taking shape. As the 2011 edition of the African Economic Outlook argues, this newness is also evident in the continent’s relationships with emerging economies.

Development aid from OECD donor countries totalled $129 billion in 2010, the highest level ever, and an increase of 6.5% over 2009. But despite this record, the 2010 figures confirm that some donors are not meeting internationally agreed commitments.

Economic data

GDP growth: +0.7% Q2 2017
Consumer price inflation: 2.2% Aug 2017 annual
Trade: +1.4% exp, +1.7% imp, Q2 2017
Unemployment: 5.8% Aug 2017
Last update: 20 Oct 2017

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