Countries that have diversified their production into more complex sectors, like Vietnam and China, are those who will experience the fastest growth in the coming decade.
That is the conclusion of the researchers at the Growth Lab at Harvard’s Center for International Development (CID) who presented new growth projections using the latest 2017 trade data.
Uganda, Egypt, Myanmar, China, and Vietnam top the list of the fastest-growing economies to 2027, all expected to grow by at least six percent annually.
the report was released on 3rd June 2019.
The growth projections are based on the single measure of Economic Complexity, which captures the diversity and sophistication of the productive capabilities embedded in the exports of each country.
“Just as global growth has been transformed by East Asia’s rise over the past several decades, the eastern side of a different continent, Africa, looks to drive the coming decades of growth,” said Timothy Cheston, a Growth Lab researcher on the project.
“Uganda, Tanzania, and Kenya all look primed to experience rapid growth in the coming period, to join Ethiopia, who currently stands among the fastest growing countries in the world.” To become a new pole for global growth, East Africa will need to achieve a more resounding structural transformation, in shifting labor out of farming into manufacturing sectors. As of now, a significant share of the region’s expected growth is driven by rapid population growth. This contrasts with the outlook for countries like Vietnam, where growth is being driven by rapid gains in entering electronics sectors.
The next decade should see a continued period of convergence in global incomes, as poor countries catch-up to the rich, though the rate of convergence appears to be slowing. The countries at the top of the growth list are also some of the world’s poorest, highlighting the ease of growing from a lower initial income base. This helps explain why Vietnam and Tanzania are predicted to grow faster than any advanced economy.