Morning Must Read: Dani Rodrik: Sub-Saharan Africa’s Growth Performance Is Not Sustainable

Dani Rodrik: Sub-Saharan Africa’s Growth Performance Is Not Sustainable:

The underlying problem is the weakness of these economies’ structural transformation. East Asian countries grew rapidly by replicating, in a much shorter time frame, what today’s advanced countries did following the Industrial Revolution. They turned their farmers into manufacturing workers, diversified their economies, and exported a range of increasingly sophisticated goods. Little of this process is taking place in Africa…. In principle, the region’s potential for labor-intensive industrialization is great. A Chinese shoe manufacturer, for example, pays its Ethiopian workers one-tenth what it pays its workers back home. It can raise Ethiopian workers’ productivity to half or more of Chinese levels through in-house training. The savings in labor costs more than offset other incremental costs of doing business in an African environment, such as poor infrastructure and bureaucratic red tape.But the aggregate numbers tell a worrying story. Fewer than 10% of African workers find jobs in manufacturing…. Sub-Saharan Africa is less industrialized today than it was in the 1980s…. Farmers in Africa are flocking to the cities…. Rural migrants do not end up in modern manufacturing industries, as they did in East Asia, but in services such as retail trade and distribution. Though such services have higher productivity than much of agriculture, they are not technologically dynamic in Africa and have been falling behind the world frontier…