The Asia model is the view that Africa can follow the path set out by the ‘East Asia Tigers’ of Japan, Korea, China, Singapore etc. of throwing open their markets, engaging in global value chains and using export growth to drive industrialisation and an enormous growth in jobs, leading to development.
A number of people have been sceptical of the likelihood of this Asia model working in sub-Saharan Africa. As ICAI wrote: “There are concerns among some stakeholders and in the literature about the extent to which the Asia model of mass job creation through industrialisation can be replicated in Africa. DFID will need to be realistic about the pace of change and open to the idea that job creation in Africa may take different forms, including a higher level of informality”.
The basic economic development concerns include:
- The Asia model was heavily dependent on US support in the aftermath of World War II, and to ward off communism, and the policy space that the East Asia Tigers (and then China, for different reasons) had is not currently available to sub-Saharan Africa.
- The Asia model just won’t work in Africa – there is evidence, if anything, of premature de-industrialisation caused by openness to international markets and Africa’s lack of a comparative advantage in manufactures.
- Even if the Asia model would work to some extent, it will result in a small numbers of jobs (due to higher levels of manufacturing automation compared to say the 1950s-1960s) and the likelihood is that these will not reach the poor.
- The poverty which DFID is trying to address will increasingly be in fragile and conflict affected states, which DFID itself appears to be saying are not fertile ground for the Asia model.
In other words, there is scepticism about DFID investment in a model that looks unlikely to work, even in relatively favoured nations looks VERY unlikely to work in the fragile states where increasingly the world’s poorest people live, and even if it does work at the level of national economic development, looks like it will not reach the poorest people.
However, it seems fair to say that the Asia model has been central to DFID’s economic development strategy (although it was more explicit in DFID’s earlier economic development strategy framework).
Now however, the IDC report (on page 19) says: ”DFID were very candid in their acknowledgement of this [the ICAI criticism]. Melinda Bohannon, Head of Growth and Resilience recognised that the impact of automation on low skilled labour was an unknown but economic trends were suggesting it could be very high. This meant that DFID’s current economic transformation plans were potentially at risk. [emphasis added] DFID was watching these trends very carefully and at the same time considering the opportunities of the e-economy which could allow for ‘leapfrogging’ into new technologies.”
So DFID now thinks that its view of the route to economic transformation may now not work. Well, as I have said above, I have always been sceptical of it. But what is interesting is that DFID are taking the topic of mass automation as the reason that they now see their economic transformation plans at risk.
It is worth remembering that the DFID economic development strategy was published in January 2017. The discussion about the impact of automation on jobs was already well under way by then (see for instance, a special report in The Economist June 2016).
So the worry about the impact of automation on DFID’s approach to economic transformation seems a bit disingenuous to me. Instead, I wonder if the always rather shaky foundations of the approach are becoming a bit more apparent in DFID country offices, and the views of a different Secretary of State have allowed a few alarm bells to ring, with DFID then hopefully rowing back from the suitability of the Asia model in Africa?