Economic Policy is important for growth and Development of many countries. The s

Question

Economic Policy is important for growth and Development of many countries. The starkest example of what the gains and losses from policy can be comes from the varying experience of sub-Saharan Africa and East Asia in the last sixty years. Tracking Development in South-East Asia and Sub-Saharan Africa indicates that the two regions with comparable levels of income per capita in the 1950s diverged in growth so rapidly. Why are there so many Asian tigers and not yet so many African lions? What could Africa learn from Southeast Asian development trajectories?

Explanation / Answer

There are many factors that have contributed to the success if Asian countries, lack of whuch has caused failure in sub african countries.

some if them include those demographic and natural reasons which cant be controlled and manipulated much. such as in almost all asian countries there is high population densuty along with natural resources. contrastly african countries are labour scarce but land abundant leading to under utilization and inefficiencies. for this reasons asian countries specializes in labour intensive products like textile while african countries focuses on agricultural activities. but because of low value added of agricultural activities per worker African countries did not do much.

secondly low transition from extensive to intensive agriculture is another reason for such difference. Asian countries had green revolution and were far ahead than African countries in such transition.

beside all these african countries can learn alot from.asian countries. some of the lessons imclude: African countries need to move up towards manufacturing sector development, there should be pro poor growth the taxes are very high as compared to asian countries.

Reallocation if resources is required from low productive activities to high productive activities.

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