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1.kym anderson ifpri dakar w'shop 051513
 

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Trade Performance and Structural Transformation.

Trade Performance and Structural Transformation.

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    1.kym anderson ifpri dakar w'shop 051513 1.kym anderson ifpri dakar w'shop 051513 Presentation Transcript

    • Trade Performance andStructural TransformationKym AndersonUniversity of Adelaide and Australian National Universitykym.anderson@adelaide.edu.auIFPRI Workshop on Economic Transformation in West Africa:What it Means for Food Security and Poverty Reduction,Dakar, Senegal, 15 May 2013
    • The issueIf we accept that:poverty reduction boosts food security,economic growth reduces poverty, andtrade contributes to economic growth,then expanding trade would be a good thingCaveat: if openness leads to uneven gainsfrom trade, a pro-poor outcome also requiresa commitment and capacity to efficientlyre-distribute some of trade gain
    • Why the caveat?Gains from trade openness typically aresectorally (even sub-sectorally) biasedhelping some groups, buthurting others if not compensated
    • OutlineHow open are West Africaneconomies?What scope for lowering trade costs andgovt trade restrictions?How much has openness contributedto region’s recent econ growth?What can governments do to maximizefuture contributions of trade to povertyreduction and food security?
    • How open are African economies?Higher trade costs than other regionsinternally & at border
    • How open are African economies?Higher trade costs than other regionsinternally & at borderSSA govts discourage agricultural(relative to non-agric) production morethan other regions
    • RRA was less negative pre-1990 but now ismore negative in Africa than in other regions
    • How open are African economies?Higher trade costs than other regionsinternally & at borderSSA govts discourage agricultural(relative to non-agric) production morethan other regionsBut, trade reforms of recent decades, that droveRRA towards zero, were growth-enhancing• See “Distortions to Agriculture and Economic Growth inSub-Saharan Africa” , World Bank Policy ResearchWorking Paper 6206, Sept 2012
    • African recent growth experienceIts rapid econ growth was accompaniedby trade growthDuring 2000-10, Africa increased its share ofworld trade by 1/3rd• petroleum explains 55% of it,• minerals 20%,• agriculture only 9% (as agric prices rose less, itssupply response slower than in mining, and SSAcomparative advantage is rel. weak in agric/food)
    • Nominal rate of assistance to West Africancountries before & after reforms began (%)1960-84 1985-2010Cameroon -9 -2Cote d’Ivoire -28 -24Ghana -19 -3Nigeria 11 3Senegal -17 4
    • Real international price indexes,1960 to 2012 (World Bank, 2005 = 100)
    • Trade specialization indexes[net exports/(exports+ imports)]
    • Prospective African growth andstructural transformationGTAP modeling to 2030 suggests SSA’sshare of global agric will grow, but far lessthan its share of other primary prod’nWith agric+food self-sufficiency still near 100%
    • SSA’s shares of global GDP, by sector (%)
    • If SSA growth is concentrated inenergy/mineral-rich countries ...... it is less likely to be pro-poor,based on recent SSAfricanexperienceElasticity of poverty to income growth is-2.4 in resource-rich nations, vs -3.2 inother SSA
    • Fall in $1.25 poverty headcount (%)
    • If SSA growth is concentrated inenergy/mineral-rich sectors ...... again, it is less likely to be pro-poorSee SSA modelling by IFPRI, in its 2012book: Strategies and Priorities for African Agriculture... especially if little redistribution ofresource rents to benefit poor households
    • To ensure SSA growth is pro-poor ...... need govt commitment and capacity toefficiently re-distribute some ofgains from openness to tradee.g. by investing more in agric R&Dand rural infrastructure, esp. as itaffects small/poor rural households andfood staplesMuch higher social payoff than providingoutput or input subsidies, which help mostlycommercial farmers unless capped