Industrialisation is a key imperative for African economies to develop, and they should look to protecting fledgling industries.
This is the word from economist Ha-Joon Chang, delivering the Adebayo Adedeji lecture at African Development Week. He explains that manufacturing is the “learning centre of the economy”, with the ability to boost other industries.
“It has never been the act of making things, but the control over superior productive knowledge that is the key to economic prosperity,” Chang says.
The controversial and outspoken economist has often argued that developing countries need to protect their young industries in order to succeed, citing examples of Asian economies like Japan and Korea between the 1950s and the 1980s. “Most developed economies have succeeded in growing their economies because of the infant industry,” he says.
“Economic development requires export success, since it requires the importation of advanced technologies which need to be paid for with foreign currency, which is acquired mainly through exports.”
While pointing out that exports are the key to economic development, he demystified free trade agreements, which he says have not necessarily been beneficial to African economies.
Chang stresses the necessity for African governments to develop their own industrial policies in order to successfully transform. “Developing countries need to upgrade within global value chains (GVCs) and eventually create their own GVCs which require industrial policy.”
Chang teaches economics at Cambridge University and has vast experience in the field of development economics. Some of his publications are “Kicking away the Ladder” and “23 things they don’t tell you about capitalism and economics”.
Carlos Lopes, executive secretary of the Economic Commission for Africa, explained that much of ECA’s inspiration on work on industrialisation comes from Chang. “He provides an excellent mix of history and economics by bringing to us the experience other countries have gone through in their development experience.”