THEME

Market Reforms and Policy Diffusion: A Comparative Analysis of Africa and Southeast Asia

OVERVIEW

By most accounts, over the past six decades, Asia has outperformed other regions of the world in terms of economic growth and industrial diversification. In particular, the impressive economic performance of East Asian countries like China, Japan, Hong Kong, South Korea, Singapore, Taiwan, Thailand, Indonesia, Malaysia, Vietnam, and the Philippines continues to elicit debate in development policy circles on distilling and transferring the lessons from the region to other developing countries. In the 1950s, the four Southeast Asian countries – Hong Kong, Singapore, Taiwan, and South Korea – collectively known today as the “Asian Tigers” all shared similar features with many African countries, in terms of economic output and structure. However, through industrial policy measures that struck a right balance between infant industry protection and large-scale investment and subsidization, these economies rapidly transitioned from rural, agricultural economies to global leaders in manufacturing, thereby paving the way for their global competitiveness.

Today, Africa is in a position similar to Southeast Asia in the 1970s in terms of labor force size and growth. The total working age population in Africa is now close to 800 million, the same as Southeast Asia in 1979. Just like the Asian Tigers, perhaps we can learn something from a comparison between Southeast Asia in the latter part of the 20th century. Africa has long been cited as the final frontier for global growth and investment. But due, partly, to the commodities supercycle, crash in global energy prices, weak private capital inflows, and other structural and institutional constraints, many countries on the continent have witnessed lackluster growth in much of the last decade.

For countries in Africa and Southeast Asia, institutional reforms remain critical for unlocking further growth and navigating the ongoing geopolitical fragmentation, technological decoupling, and the resurgence of industrial policy. However, due to historical differences in political economy and institutional systems, drawing lessons from the East Asian experience requires a firm understanding of the heterogenous nature of the countries and markets in the region. Finding new growth drivers, addressing social issues, and creating good jobs for the large swaths of young people remain critical for consolidating the gains in recent decades.  

Our esteemed panel of experts will unpack this and provide actionable insights to help key stakeholders decipher the key issues.

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