Africa’s Rise a Myth? Bring On Authoritarian Capitalism Instead

Africa
Africa is indeed making steady economic progress

AFRICANGLOBE – The ‘Africa rising’ narrative may be questionable and misguided, but so too is the suggestion Africa should blindly follow the authoritarian developmental states of East Asia.

In his recent article, Rick Rowden makes the case that Africa’s low levels of manufacturing and industrialisation suggest the continent is not the ‘growth miracle’ that some commentators believe.

His piece, a response to bullish outlooks from McKinseyThe Economist and Time magazine among others, dismisses talk of Africa’s rise as a “myth”. Since African economies make up a very small share of global manufacturing, he argues, they cannot be spoken of in the same breath as the Asian economies.

Leading by example?

But while Rowden rightly draws attention to the irrational exuberance common in the ‘Africa rising’ narrative, his argument is deeply flawed in both its analysis and prescriptions.

Firstly, Rowden gives a glossy, airbrushed description of the East Asian ‘growth miracle’. Rowden says this group – often referred to as the ‘East Asian tigers’ of South Korea, Taiwan and Singapore, followed by China – managed to rapidly build manufacturing capacity, creating jobs very quickly. Since East Asia’s industrial policies “worked so well”, Rowden argues, African economies should, by implication, follow suit.

While East Asia’s industrial policies certainly delivered rapid growth, however, they have been largely deployed via authoritarian, repressive frameworks that entailed frequent and sustained infringement of people’s rights.

We hear plenty about benevolent technocrats, generous subsidised credit, carefully designed export strategies, and industrial protection for domestic companies from advocates. But we hear much less about military rule, labour repression, opaque lending to industrial bigwigs, or mass protests against undemocratic constitutional changes, all of which were also integral features of this ‘developmental state’.

Imagine if an African government today imposed martial law and hold down wages in the name of export-competitiveness, to crush labour rights and arrest union leaders, give an amnesty to corrupt industrialists as long as their companies meet export targets, and to allow large-scale US food aid to sweep farmers off their land and out of their livelihoods.

Sound appealing? This is South Korea during its ‘miracle’ growth phase. And while South Korea’s land reform programme (initiated, it should be said, by the US military) led to greater equity in land distribution, some argue it did not improve the situation for farmers, whose debts had to be repaid in five years and who faced usurious interest rates to pay the government which was also keeping producer prices artificially low.

But even with repression and authoritarianism, the likes of South Korea and Singapore did not achieve transformation in a single decade, the period which ‘Afro-optimists’ are referring to in their analysis, and which Rowden dismisses on account that it has not delivered a structural revolution yet.

And this is a caution not just borne out by East Asia’s experience. Consider England – mentioned (normatively) in Rowden’s article as another (in fact, the original) example of the ‘development as industrialisation’ mantra.

Let us refresh our memory about what England’s ‘industrialisation’ involved: enslavement and colonisation of half the world to deliver raw materials, exploitation of the domestic working class to deliver cheap labour, and the enclosure movement to privatise land for the purposes of lifting agricultural output, pushing all but the landed gentry out of their livelihoods and into the factories and mines where many perished.

Africa’s Dodgy Data

Even if we focus purely on economic data, Rowden’s analysis is weak. His view of the continent’s manufacturing sector seems to be based on just two reports, one from the UN, the other from the African Development Bank (AfDB). Any AfDB analysis should be taken with a pinch of salt. This, after all, is an institution which recently claimed there were 300 million middle class people in Africa, classifying ‘middle class’ as those earning between $2 and $20 per day. 60% of this group earned between $2 and $4; barely out of poverty.

Based on such limited data, the critique misses on-the-ground advances in manufacturing. Industrial processing zones are emerging across many African markets, from Ghana to Ethiopia, providing assembled goods to a range of Western and Eastern firms including textiles, footwear, wood and furniture, leather, auto and consumer products. The Africa Growth and Opportunity Act, an item of US legislation, has resulted in the three-fold increase in US non-oil imports from Africa across a range of sectors, including textiles and apparel, processed agricultural products and footwear.

Rowden’s analysis is also limited because it seems to take manufactured exports as a simple proxy for manufacturing. This misses value-added in manufacturing to meet domestic needs.

A recent study from Johns Hopkins University shows the rise in Chinese private, as opposed to state-backed, investment in Africa, with a focus on meeting domestic needs in larger markets like Nigeria and on labour-intensive manufacturing activities, followed by service industries. By primarily focusing on manufactured exports, Rowden misses this completely.

The export focus is further problematic because it propagates a simplistic view of manufactured items as ‘good’ and primary commodities and natural resources as ‘bad’ types of exports, stating that a heavy dependence on natural resource-based manufactures is an indication of a “low level of economic diversification and low level of technological sophistication in production”.