Media Type

Lecture

Publication Date

4-2-1992

Description

I agree with Ms Forouton that the import substitution policies and the unequal distribution of costs and benefits of integration are the principal reason for the lack of success in regional integration in Sub-Saharan Africa (SSA). I also agree that factor mobility in the presence of restricted goods movement is not necessarily and automatically welfare improving or desirable. Both of these conclusions follow logically from the comparative static framework she uses for her analysis. I would leave the speculative question as to what will happen if we use a dynamic process but I would show that, even under the present framework, the story she tells is only partial. I do not believe that the African countries trade little among themselves and that they are not natural trading partners. I also do not share the view that differences among them are enormous. She shows that the difference in per capita incomes are 7 to 6 times in the regional groupings. If we exclude Mauritius, Botswana, Seychelles and Gabon whose total population is less than 3 million, the majority of the African countries have per capita incomes in the range of $250-$600 and the income differences are less significant than in other regions. Seventeen (17) out of the 39 SSA countries had more than 10 percent of their recorded trade with SSA partners. Seven (7) of these achieved a share of at least 20 percent. The low shares of the largest economies in the region mostly explain the low overall ratio of intra-regional trade.

Notes

Comments presented at the World Bank and CEPR Conference on New Dimensions in Regional Integration, Washington D.C., April 2-3, 1992. The author was Chief Economist, Africa Region, at the World Bank. IH0232

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