Please wait while we get your page ...

Africa’s Search for An Economic Model of Growth: Examining the China and Western Models
Africa’s Search for An Economic Model of Growth: Examining the China and Western Models
Posted

By - Isaac Joseph

Posted - 21-01-2020

Over the years, Africa has been the centerpiece of global attraction, generating interest from developed nations across the world. While its human and capital resources are being coveted, it is ironical that Africa developing economies are yet to attain desired targets. Should Africa stick to the Western growth model or pattern its own model on that of China? This remains a question that divides experts along different opinion lines. Positives and negatives are inherent in both models but what remains worrisome is the practicability and suitability of these models for Africa. The Western growth model has definitely led us to the valley of nowhere but we are not sure where the China growth model would lead us either. Do we continue to travel through the more familiar road or take the one less travelled by? Our choice would surely make the difference, in this decade of action.

Over the years, the world has taken a dynamic twist in its quest for development. Industrialization is on an alarming increase in China and other Asian countries. They are fast becoming the cynosure of all eyes and developing countries are taking interest in their model of growth. According to estimates by the International Monetary Fund in 2018, China was the world’s largest economy for the fourth year in a row after producing $25.3 trillion in economic output. It also contributed 19% of the world’s total gross domestic product of $135.2 trillion. In second place was the European Union, generating $22 trillion. All together, China and the EU generate 35% of the world’s economic output, while the United States remained in third place, producing $20.5 trillion. All the world’s three largest economies combined produced 50% of the world’s total economy.

The Western Model of Growth

Various scholars have posited that the Western Growth model started at the end of World War II, which marked both the end of direct colonialism and a time when most of the world was picking up after the ruins of war, just as Ana Berry describes it. The “development era” kick started with President Truman’s famous 1949 inaugural speech, where he initiated the “launch of a global effort to assist ‘underdeveloped areas’” (Sorenson, 2010). This declaration and other three key conditions led to the birth of modernization theory, which is at the root of the Western development model. The end of the colonial era was the first key to the evolution of modernization theory. Most of the ‘underdeveloped’ regions mentioned by Truman were previous colonies of Western nations and the dissolution of these colonial empires led to a flood of new “Third World” nation states that were “in search of a model of development to promote their economy and to enhance their political independence” (So, 1990).

Although, the clarion call to help these nations develop led directly to international trade relationships which only strengthened their economic and social exploitation through neocolonialism and imperialism. The rise of the U.S. to the status of the world’s greatest superpower was the second condition that gave rise to modernization theory. In the 1950s, the U.S. “practically took over the responsibility of managing the affairs of the whole world” (So, 1990). The last reason for the birth of the Western development model, as highlighted by Ana Berry, was the spread of communism. It was reported that during the Cold War period, the Western and Soviet blocs raced not only to build superior military power, but also to pull other countries to their ‘side’. To the Western bloc (predominantly the U.S.), preventing underdeveloped and economically weak countries from falling prey to communism became integral to national security. Providing aid to developing countries thus became a means of insurance for Western democracies- enforcing a ‘you’re either with us or against us’ ideology.

There is an assumption by modernization that there is a global agreement that the West is best. Western nations in Europe and the United States “are viewed as having unmatched economic prosperity and democratic stability. And since they are the most advanced nations in the world, they have become the models the latecomers would like to emulate” (So, 1990). And according to Francis Fukuyama, the Western model of growth focuses on large investments in public health, women’s empowerment, support for global civil society, and anti-corruption measures. However, Imran Sabir (2002) believes that “the Western concept of development of development is quite unfavourable to third world countries (including Africa), as it purports to provide a holistic approach to society. Solutions are global in nature, and therefore applicable to all societies irrespective of the unique indigenous norms and values that distinguish individual societies for each other. He further asserted that the world is not becoming a global village, as widely proclaimed, but a cage in which the parrot of third world development is enthralled. The West, in its capacity as the parrot’s master, treats it and feeds it as it wishes (usually in the form of aid.) Should Africa build on this exploitative model of growth?

China’s Model of Growth

After the “great proletarian cultural revolution” came to an end about 30 years ago, China became materially and culturally poor as a result of the revolution; it also became egalitarian in a way the world had not seen before. Hubert Schmitz clearly pointed out that China is booming materially and culturally, but has also become a very unequal society. 30 years of economic growth at a yearly average of 9 per cent is incredible for China and without exaggeration, Newsweek in March 6, 2006 calls it “the most successful case of economic development in human history.” China has become one of the drivers of global change and institutions such as the Institute of Development Studies (IDS) of the University of Sussex, are leading researches on what it terms the “Asian Drivers of Development.”

The China’s model of growth is premised on the ideas of Adam Smith and the Chinese Communist Party. This model lays emphasis on the depth of the division of labour depending on the size of the market for economic development to thrive. The vast China’s internal market is hinged on the removal of internal barriers and rising incomes and its attractiveness to industrial clusters and the emerging “commodity markets.” Hubert believed that the key point of China’s development strategy and that of other East Asian countries is that they did not follow models from elsewhere. Stephan Haggard (2004), in Institutions and Economic Growth, laid emphasis on how East Asia succeeded through a long process of “transition” that was highly experimental in nature. Similarly, in a 2003 review of Asian industrial development, Mike Hobday concluded that it is diversity rather than uniformity in the institutional arrangements and development policy that characterises the innovation experience of the Asian Tigers, which included China.

However, economists, just as reported by the Congressional Research Service have however noted, that the current economic model of China has resulted in a number of negative economic (and social) outcomes, such as over-reliance on fixed investment and exporting for its economic growth, extensive inefficiencies that exist in many sectors (due largely to government industrial policies), wide-spread pollution, and growing income inequality amidst others. The economic growth model of China greatly emphasized the growth of heavy industry in China, much of which has been described as ‘energy-intensive and high polluting.’

The U.S. Embassy in Beijing, which monitors and reports air quality in China based on an air quality index of particle matter (developed by the U.S. Environmental Protection Agency) considered to pose a health concern, reported that the air quality in Beijing for a majority of the days in January 2013 ranged from “unhealthy” to “hazardous” (based on 24-hour exposure) and, on a few days, it recorded high readings that were “beyond index.” In the report, the air quality in Beijing was termed by some in China as “Airpocalypse,” a situation which reportedly forced the government to shut down some factories and reduce the level of official cars on the road. Also, it was reported on December 9, 2013 by the Chinese media that half of China was blanketed by smog and this was corroborated by the U.S. Consulate General in Shanghai, who affirmed that that were a number of days in December 2013 where it’s measurement of the air quality in Shanghai was hazardous or very unhealthy, and its readings were “beyond index” during some time periods on December 5, 2013. China’s Geological Survey, in February 2013, reportedly estimated that 90% of all Chinese cities had polluted groundwater, with two-thirds having “severely polluted” water. Furthermore, as reported by the Asian Development Bank in 2012, less than 1% of the 500 largest cities in China meet the air quality standards recommended by the World Health Organization, and 7 of these are ranked among the 10 most polluted cities in the world. In 2011, the U.S. Entergy Information Administration (EIA) also projected that by 2035, China’s carbon dioxide emissions (CO2) could be nearly double its current levels. Another study by ExxonMobil projects that, by 2030, China’s CO2 emissions could equal the level in the United States and EU combined. And as of 2008, the World Health Organization estimated that air pollution in China caused the death of 470,649 people. How prepared is Africa for an economic model that has all of these health risks inherent in it?

Despite the huge technological advancement of China, it is also reported that its level of productivity gains and thus, real GDP growth, could slow significantly from its historic 10% average, unless it becomes a major center for new technology and innovation and/or implements new comprehensive economic reforms. The Economist Intelligence Unit (EIU) currently projects that China’s real GDP growth will slow considerably in the years ahead, averaging 6.4% from 2013 to 2020, and to 3.6% from 2021 to 2030. These future projections have made the Chinese government prepare plans to dump its current economic model of fast growth at any cost, to a more “smart” economic growth, which seeks to reduce reliance on energy-intensive and high-polluting industries and rely more on high technology, green energy, and services, in a bid to obtain more balanced economic growth. Is Africa ready for all of these huge risks?

Way Forward for Africa

While both models of growths have their merits and demerits, it would be harsh to impose any of them on developing nations. However, it is expected that cues can be taken from both models and aligned in peculiarity with what is obtainable in Africa. Hence, adaptation, rather than adoption, is advised for developing nations. Just like the views of the historian, Alexander Gerschenkron, in his book “Economic Backwardness in Historical Perspective” (1962), he argued that latecomers have to plot their own distinctive path of development. Repeating what others have tried before is rarely possible because each country has its own specific internal conditions and because the rise of the early developer changes the external conditions for the latecomer. Whatever model Africa sticks with, will go a long way in creating its future. It is going to be a tough but inevitable decision.

Leave a Reply

avatar