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According to some experts, the African continent can achieve very rapid development in the next three-four decades; the same way China developed during 1980-2020, and India is doing progressively since the beginning of this century. These and other issues on African perspectives are revealed in prof. Sachs predictions in the recent Eurasia Review; these predictions are vital for any other continent or states in modeling political economy.
The African needs…
The African states need to achieve a high sustained of growth that he wholly believes to be present in the region’s potential. Africa needs a large internal market and diplomatic presence, the latter made possible now with its representation at the G20 (which could probably very soon be relabeled as the G21), the UN and other international platforms.
Africa also needs high investments across all major classes of capital, with human capital being the most important, hence the need to provide universal quality education. Sachs also indicated that Africa needs rapid electrification and digital access, so that every household can get lit up and online.
All references are from the main source: Ong L. Future of Africa, – Eurasia Review/ August 16, 2024; in: https://www.eurasiareview.com/16082024-future-of-africa-with-prof-sachs-oped/
Back in 1980, prof. Sachs underlines, China was impoverished and not even on the world’s radar screen economically: actually, the country’s poverty rate was higher than in Africa today. However, China opened up and took important policy measures: during four decades it not only became a high-income economy, but also the world’s largest economy in total GDP measured at purchasing-power parity (PPP). According to Sachs, China can serve as a good model for Africa.
African continent has had all the necessary conditions for an extensive growth: e.g. it has 1.4 billion people, roughly the same population as that of China and India. While India is about 15 to 20 years behind China in its economic trajectory, it has also been experiencing very high growth.
In the time-span, China started tremendous growth trajectory in 1980 and India around 2000; it seems that the “African time” has arrived now.
African differences…
However, it would take more than a big population to drive rapid growth and was careful to highlight the significant distinction between the three entities.
There some big differences: following the colonial period, India remained one large country (actually, British India became three countries: India, Pakistan, and later Bangladesh). China, of course, remained one unified state despite encountering Japan’s imperialistic ambitions and the century of reckless behavior by the European powers. Africa, on the other hand, has to deal with the ongoing difficulties associated with its colonial legacy, notably Europe’s division of Africa into 55 states.
These individual African states are too small on their own to achieve the kind of global role and competitiveness they need. However, if Africa truly creates a political, economic, financial, and eventually monetary union, then it will be able to emulate the great successes of China and India. With a single market, a unified financial system, and increasing monetary integration, Africa will be well positioned to create a truly unified economic space, also deeply interconnected by trans-boundary infrastructure (for power, fiber, roads, rail, shipping, and ecosystem management). Moreover, with a strong union, Africa will be positioned to play a global diplomatic role as well, helping to lead global decision-making in key international forums.
African Union in G20
At the 2023-G20 meeting in Delhi (India’s G20 Presidency), the African Union was made a permanent member of the G20. None could be happier than the 1.4 billion Africans who have finally been given a major voice in deliberations on major global economic issues.
Africa needs international loan financing with interest rates comparable to those granted to the US. “The irony here is, Sachs notes, that the US actually has a higher debt-GDP ratio than most African countries (and other G7 countries such as Italy and Japan have even higher debt-GDP ratios), yet the credit rating agencies have assigned African sovereign borrowers very bad credit ratings”.
However, Africa has higher growth potential than the high-income countries, and typically lower ratios of debt to GDP. The rating agencies are wrong in their methodology and the methodology and ratings need to be fixed, acknowledged prof. Sachs: “if Africa cannot borrow on reasonable terms – meaning low interest rates and long-term maturities – then Africa will remain poor”.
Another group of states in modern multilateral world, such as BRICS provides a vital example of progressive cooperation: presently expanding to ten member countries, the BRICS comprises around 46% of the world population and 36% of the world GDP (in PPP’s ratings; thus, it is a “a very good group that has come about because its members do not want to be bossed around by the US,” he added.