Africa’s Growth Puzzle: Better Ways to Fill Infrastructure Gaps


The issue of reviving or maintaining economic growth is a the forefront of policymakers’ minds all around the world. Of course, the policies needed to achieve that differ from region-to-region, country-to-country.

For many countries in Africa, weak infrastructure is an obstacle to raising growth.

In a recent interview with IMF Survey online magazine, Andrew Berg of the IMF’s Research Department (and one of our contributing bloggers) discusses the challenge of overcoming what he calls a “tremendous infrastructure deficit”, an issue that “affects all levels of society and all aspects. It affects health, education and growth.”

The issue is complicated further by the many competing demands these countries face. “We are talking about the need for infrastructure development, but we could be talking about how incredibly important it is to spend on AIDS, health, education, or any number of things,” says Berg.

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Tipping the Scales—Rebalancing Growth in Asia


By Anoop Singh

(Version in 中文 and 日本語)

The center of global economic growth is moving from the West to Asia, in particular emerging Asia and China.

But, left unattended, the economic imbalances that have emerged with this shift in power could test the sustainability of global growth.

How to achieve this rebalancing is a key theme of a new book from the IMF, launched in Hong Kong, on Rebalancing Growth in Asia—Economic Dimensions for China.

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South Africa’s Unemployment Puzzle


By Abebe Aemro Selassie

Among the havoc wrought by the global financial crisis, unemployment ranks at the top. This discussion often focuses on the situation in advanced countries. Unemployment in the United States, for example, continues to hover around 9 percent.

Take that and double it. Then you can begin—yes, just begin—to get a sense of the magnitude of the problem in South Africa. Unemployment in South Africa now stands at some 24 percent. Youth unemployment is phenomenally higher still at some 50 percent. Continue reading

Bridges to Growth, Not Roads to Nowhere: Scaling Up Infrastructure Investment in Low-Income Countries


By Hugh Bredenkamp and Roger Nord

(Version in  Français )

For low-income countries, the absence of reliable infrastructure—roads, railways, ports, but also power supply—has become an increasingly binding constraint on growth. And we know that investment in infrastructure can raise productivity, boost growth, and help reduce poverty. But as straightforward as it sounds, getting investment decisions right is no easy feat.

For starters, low-income countries have massive investment needs. The World Bank has estimated that, in sub-Saharan Africa alone, the total financing need is around $93 billion per year. And one third of this still unfunded.

Even when financing is available, there’s a raft of other issues to tackle. What investments offer the biggest boost to growth? How much investment is needed and by whom? How to finance this investment without taking on too much debt? Continue reading

The Two Rebalancing Acts


By Olivier Blanchard

Achieving a “strong, balanced, and sustained world recovery”—to quote from the goal set in Pittsburgh by the G-20—was never going to be easy. It requires much more than just going back to business as usual. It requires two fundamental and complex economic rebalancing acts.

First, internal rebalancing. When private demand collapsed, fiscal stimulus helped reduce the fall in output. This helped avoid the worst. But private demand must now become strong enough to take the lead and sustain growth, while fiscal stimulus gives way to fiscal consolidation.

The second is external rebalancing. Many advanced countries, most notably the United States, relied excessively on domestic demand before the crisis, and they must now rely more on net exports. Many emerging market countries, most notably China, had relied excessively on net exports, but must now look to domestic demand. Continue reading

Making up for Lost Time: Getting Back on Track to the Millennium Development Goals


By Hugh Bredenkamp and Catherine Pattillo

Many of the world’s macroeconomists—including here in the IMF—are currently busy reading the daily tea-leaves, attempting to divine whether the sputtering recovery in the advanced economies will hold, and gradually pick up steam, or fall back into the notorious “double dip.”

There is a huge amount at stake here, not only for the millions of unemployed in the developed world, but also for the many hundreds of millions of our fellow global citizens in developing countries who live in dire poverty, without access to proper health, education, or sanitation. The world’s economies are now closely interconnected, and the fate of those in poor countries is tied, increasingly, to that of the richest. Continue reading

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