1

This is Africa’s moment…

But for how long?

And how to take the best and most sustainable advantage of it?

2

1. World Growth is Changing its Engine

3

Relative poverty is declining sharply

Development is the success of the twentieth century

Education is in fast progress

Child mortality is declining

4

MDGs are in real progress

Millennium Development Goals Indicators

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As well as HDI

6

Developing countries are becoming the engines of growth for the world

7

OECD countries will face a difficult adjustment and the US above all

8

World’s demand structure is shifting

Changes in absolute volumes of GDP – source OECD

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Many are lagging behind but more and more are catching up

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And more is to come

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2. Four main development models based on world inequalities shape the modern growth

• 2.1 The “Dutch disease vanquisher” model• 2.2 The “double surplus sweatshop” model• 2.3 The “sweatwalker” model• 2.4 The “@sweater” model

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2.1 The “dutch disease vanquisher” model

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Crise de la dette et effondrement de la croissance en Amérique latine

Killing the old double deficit models andtheory

Debt crisis and economic collapse in 80’s Latin America(please do not forget Africa’s failure)

2.2 The double surplus sweatshop models (i)

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The reign of double surpluses

2.2 The double surplus sweatshop models (ii)

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2.3 Exporting men: the emergence of the sweatwalker model

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2.4 Newcomers to fast growth pattern: from @sweaters to globalservice sweaters

After the world’s factory, the world’s desk (and hospital)?

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3. High growth and rapid increase of welfare apparently shape the

world, but…the inversion of scarcities

questions the sustainability of this successful pattern

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3.1 The great demographic shift, or Man as a disposable commodity

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3.2 The end of nature

Overshooting: mankind’s footprint

Nature as a competitive asset

Kribi waterfalls, Southern Cameroun

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4. The three main channels for unsustainability

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4.1 Macroeconomic un-sustainability: the global link

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Global imbalances in a world of reversed scarcities generate financial volatility, private and public unsustainable indebtment pressure, exchange rate wars, and

ultimately lead into global recession

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4.2 Social un-sustainability: both North and South

It is mainly rooted in inequalities and low employment generation growth

Source: MDGs Report 2010

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All linked

Food riots in Haiti, Apil 2008 Riots in French suburbs, 2005

Al Qaida au Maghreb Islamique (AQMI), October 2010

Subsaharan migrants on their way to Europe

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4.3 Environmental unsustainability: the major structural economic realignments

The environmental Kuznets Law

Carbon emissions, biodiversity loss, local and global pollutants… all wrong directions: back to the club of Rome? The laws of relative and absolute impacts

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coco

From the economics of flows to the economics of assets

UNCTAD, Trade and Environment Review 2009/2010

Commodities, space, air, water, land: from expansive to expensive

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Pierre-Noël Giraud, Denis Loyer, Capital naturel et développement durable en Afrique, octobre 2006

Genuine growth, hidden realities

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Towards a slow and dirty growth path?

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2. This is Africa’s Moment (but how long will it be?)

Streets of Lagos

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Africa is the major question mark of sustainability for the second half of the century

• Growth and demographic patterns make it the combination of India and China in social, environmental and macroeconomic challenge

• Africa’s size is the addition of Europe, the US, China, India, and more: it is the cornerstone of the twentieth century assets economy

• Africa is already a disputed territory between the “new hungrys”: its fate is structured south-south

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Subsaharan Africa China India Europe

World population by region

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Growth has resumed

-4

-2

0

2

4

6

8

1980 1985 1990 1995 2000 2005 2010e

World EU Subsaharan Africa

Economic Growth, by region, 1980-2010

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And should last (for some time)Africa dependency ratio

30

40

50

60

70

80

90

100

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Subsaharan Africa East Asia Europe

Note: the dependency ratio is the ratio between the "dependent" population (aged 0-14 years old and 65 more) and the population in “working age"(between 15 and 65). It is expressed as the number of "dependent" for 100 people in working age . East Asia = China, Northern, southern Korea, Japan Mongolia Korea. Europe including Russia. Source: United Nations, World Population Prospects: The 2008 revision (median scenario), 2009.

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A potential horizon of thirty years?…

30

35

40

45

50

55

60

65

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Urban population (% of total)

Africa

SSA

SSA less SA

North Africa

South Africa

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It is producing real impact

0

500

1000

1500

2000

2500

3000

3500

400019

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

09

Cons

tant

200

0 U

S$

GDP per capita

Africa

SSA

SSA less SA

North Africa

South Africa

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Africa is also carried by the global move towards the universal middle class

Countries 1990 2005 1990 2005East Asia & Pacific 315,5 1117,1 19,8 59,3

China 173,7 806 15,3 61,8Latin America & Caribbean 276,7 362,1 63,2 65,8

Middle East and North Africa 170,2 240,1 75,5 78,7South Asia 192,7 380,2 17,2 25,8

India 146,8 263,7 17,3 24,1Sub-saharan Africa 177,7 197,1 22,8 25,8

Number living between $2 and $13 per day

Percent of the population

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A class that is joining the global consummer’s feast

-4

-2

0

2

4

6

8

(ann

ual %

)

Household final consumption expenditure per capita growth

East Asia & Pacific

OECD

Latin America & Caribbean

South Asia

Sub-Saharan Africa

37

Thanks to fiscal space…

-6

-4

-2

0

2

4

6

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009(%

of G

DP)

Cash surplus/deficit

Africa

ASS

AFN

ASS less SA

SA

38

Leading to lower endebtment

0

10

20

30

40

50

60

70

80

90

10019

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

% o

f GD

P

Central government debt, total

Africa

SSA

North Africa

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And improved external accounts

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

6000

7000

US

Do

lla

rs,

mil

lio

n Overall balance

Africa

Sub saharan Africa

North Africa

Sub saharan africa lessSA

SA

-15

-10

-5

0

5

10

15

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

% o

f G

DP

Current account balance

Africa

SSA

SSA less SA

North Africa

South Africa

40

Overstated hopes?

Emerging Africa: a book by Steven Radelet, formerly CGDEV, 2010

A McKinsey report, 2010

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Actually Africa has to accelerate public investment…

0

2

4

6

8

10

1219

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

08

(% o

f GD

P)

Gross public investment

Africa

Sub-Saharan Africa (developing only)

Sub-Saharan Africa

South Africa

North Africa

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As well as private!

0

5

10

15

20

25

30

1995 1997 1999 2001 2003 2005 2007

(% o

f GD

P)

Gross private investment

Africa

Sub-Saharan Africa

Sub-Saharan Africa excluding South Africa

South Africa

Source: World Bank

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It will also face huge environmental and social

challenges…• How many wars and civil wars due to migration

led conflicts in 2050?• No more land and water – and expensive energy

in 2050?• How many failed states still in 2050?• One billion Africans below 2 usd a day in 2050?• And how many “dependant”? (on which

economic model base?)

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One major question is what model will bring Africa its fastest and most sustainable pace of growth?

• The resources model still carries huge macro and environmental challenges

• The double surplus model may not be under reach anymore

• The @sweater and the sweatrunner models cannot fix it all

• Is there a room for a domestic market making oriented policy?

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key structural “benchmark policies” are “no mistake” options

• An energy policy that reduces dependency• An urban and transportation policy that ensures

productivity gains and environmental upsides• “externalities generating” policies have to be

favored: the case of water and health• Africa has to take care of its elites, and has still to

generate its own private sector• A financial market that allows domestic

currencies long term funding

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ADB matters

• ADB has to and can carry an african vision of development

• It links from South to North• Its volumes matter• Its instruments can make a difference• It has imposed itself over the past years as the

premier bank of Africa