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The Unemployment Crisis Costs_ Causes and Cures; Discussion of

VIEWS: 30 PAGES: 34

									              Discussion of “Elements of a Pro-
                Employment Macroeconomic
                Framework” by Yan Islam



                                 Andrew Bergg
                                 Research Department
                                 International Monetary Fund


                     Washington,        22,
                     Washington October 22 2010




The views expressed here are those of the author and do not necessarily represent those of the IMF or IMF policy.
           Overview

Agree

Disagree
             Outline
                     pro-
Should we move to a “pro-
employment” macro framework?

 Short answer: sure

 Long answer: It’s a bad idea, and we already
 do it.

 Real question: How?
               New Outline
Some stage-setting: the baby and the bathwater
   SSA take-off
   A bit about distribution
What about employment?
The framework: weaknesses indeed, but are these the main ones?
   Is low inflation a source of constraint on access to finance?
   Cliffs and loss functions
Some issues in macro/development interactions
   Debt sustainability
   Exchange rates
What do we know about employment creating growth, and what
macro has to do with it? (No answer here)
               New Outline
Some stage-setting: the baby and the bathwater
   SSA take-off
   A bit about distribution
What about employment?
The framework: weaknesses indeed, but are these the main ones?
   Is low inflation a source of constraint on access to finance?
   Cliffs and loss functions
Some issues in macro/development interactions
   Debt sustainability
   Exchange rates
What do we know about employment creating growth, and what
macro has to do with it? (No answer here)
                            Figure 3d. Log Real GDP Per Capita and Structural Breaks: Africa
                                   BP asymptotic breaks are dashed, SUDMax breaks are solid
                                      Kenya                                                              Cameroon




                                                                              8.2
        7.2
 7.05 7.1 7.15




                                                                                      8
           e_pc




                                                                                  e_pc
   ln_income




                                                                        ln_income
                                                                      7.6     7.8
                                                                              7.4
        7
                   1940   1960         1980         2000       2020                       1940   1960       1980        2000   2020
                                       year                                                                 year


                             Central_African_Republic                                                   Madagascar
        7.1




                                                                              7.2
        7
    6.8 6.9 7
 ln_income_pc




                                                                      ln_income_pc
                                                                       6.8     7
        6.7




                                                                              6.6
        6.6




                   1940   1960         1980         2000       2020                       1940   1960       1980        2000   2020
                                       year                                                                 year


                                     Nigeria                                                            Cote_d_Ivoire
        7.2




                                                                              7.8
 ln_income_pc




                                                                      ln_income_pc
           7




                                                                              7.6
  6.8




                                                                      7.4
        6.6




                                                                              7.2
        6




                                                                              7
                   1940   1960         1980         2000       2020                       1940   1960       1980        2000   2020
                                       year                                                                 year


                                   Mozambique                                                             Senegal
                                                                              7.5
        7.4
   _income_pc




                                                                        _income_pc
                                                                               7.4
          7.2




                                                                       7.3
    7
 ln_




                                                                      ln_
                                                                       7
        6.8




                                                                              7.2




                   1940   1960         1980         2000       2020                       1940   1960       1980        2000   2020
                                       year                                                                 year


                                  South_Africa                                                           Botswana
        9.2




                                                                              9
               9




                                                                        7.5 8 8.5
            pc




                                                                                pc
 ln_income_p




                                                                      ln_income_p
    8.6 8.8
        8.4




                                                                              7
        8.2




                                                                              6.5




                   1940   1960         1980         2000       2020                       1940   1960       1980        2000   2020
                                       year                                                                 year

Minimum interstitiary period = 8, p-value = 10. Source: Penn World Tables and authors’ calculations
Unprecedented Number of Up-Breaks
                        Up Breaks
                                                     Frequency of Growth Upbreakes
                                                          (Number of upbreaks)
  7                                                                       7
                       Sub-Saharan Africa                                                       Emerging Asia
  6                                                                       6

  5                                                                       5

  4                                                                       4

  3                                                                       3

  2                                                                       2

  1                                                                       1

  0                                                                       0
   1960    1965     1970    1975     1980    1985    1990   1995   2000    1960   1965   1970   1975   1980     1985   1990   1995   2000
  7                                                                       7
                               Latin America                                               High-income Countries
  6                                                                       6

  5                                                                       5

  4                                                                       4

  3                                                                       3

  2                                                                       2

  1                                                                       1

  0                                                                       0
   1960     1965    1970     1975    1980     1985   1990   1995   2000    1960   1965   1970   1975   1980     1985   1990   1995   2000
      Source: Berg, Ostry and Zettelmeyer (2008)
Per Capita GDP: Keeping Up With
         Oth Regions
         Other R i
                International Comparisons: GDP per Capita
                     (Index 1995=100 I     l  d ll )
                     (I d 1995 100 In real US dollar)
   250



                         Sub-Saharan Africa
   200                   Middle East and North Africa
                         Central and Eastern Europe
                         Developing Asia
                         Western Hemisphere
                         Industrial countries
   150




   100




    50
         1985   1988   1991    1994      1997     2000   2003   2006   2009


   Source: IMF, World Economic Outlook
                  This Time It’s Different?
                          SSA GDP Per Capita Growth, Five-Year Average
                                                                    t 5 t 1)
                              Countries with growth rate > 2 1/4 in t-5 to t-1)
              7
                                      1985
              6
                                                           2000
              5
              4                  1975                             2005
                       1980                1990
 t-5 to t-1




              3                                    1970
                                                                   1995
      o




              2
              1
              0
          -1
          -2
                   2
                  -2      1
                         -1      0        1       2        3        4       5         6   7
                                                   t to t+4

Note: The size of the bubbles correspond to the number of countries in each period.
What is not driving the take-off:
         W ld Growth
         World G      h
                    Sub-Saharan Africa Diverging but not
                          Necessarily Decoupled
                       GDP Per Capita Real Growth
 6
                                       (Percent)

 4                                      Rest of the world



 2


 0


 -2                                            Sub-Saharan
                                                  Africa

  4
 -4
      1970   1975     1980    1985     1990    1995     2000   2005   2010
 Source: IMF, World Economic Outlook
What has helped (2): Get The Basic
          M      Ri ht
          Macro Right
   40                                                                        40
                 High-growth            Inflation
   35               non-                (Percent)                            35
                  resource-
                     rich              High-growth
   30                                                                        30
                                      resource-rich
                                      resource rich

   25                                                                        25

   20                                                                        20
                                              Medium-
   15                                          growth                        15

   10                                                                        10

    5                                                                        5
                          Low-growth

    0                                                                        0
        1985   1988   1991     1994    1997     2000    2003   2006   2009
What has helped (2): Get The Basic
          M      Ri ht
          Macro Right
   200
                              External debt           Low-growth
                                                      L       th

   175                        (Percent of GDP)


   150

   125
                                                 High-growth
   100                                         non-resource-rich


    75

    50
                                       High-growth
                         Medium-      resource-rich
    25                    growth

    0
         1985   1988   1991   1994   1997    2000     2003   2006   2009
                                             Now some challenges (1): Sharing
                                                       th gains
                                                       the i
                                                                                   Short Term                                                                                                                       Long Term
                                         0.25                                                                                                                                           0.15
                                                                                                                                                                                                                                SWZ
                                         0.20                                                           SEN
Avera annual change in log (per capita
                                     a




                                                                                                                                               Avera annual change in log (per capita
                                                                                                                                                                                    a
                                                                                                                      KEN                                                               0.10                                                     GMB
                                         0.15
                                                                           KEN                          ZMB
                                                                              CIV                                                                                                                                    SEN
                                         0.10
      income in poore quintile)




                                                                                                                                                     income in poore quintile)
                                                                                                     UGA
                                                                                            ZAF      UGA
                                         0.05                                                       BFA GHA
                                                                                                                                                                                        0.05                       BFA          CMR
                                                                                                         UGA                                                                                                         UGA
                    est




                                                                                                                                                                   est
                                                                                    MDG                      MDG                                                                                                        MOZ
                    e




                                                                                                                                                                   e
                                                                                                      CIV
                                         0.00                                                                                                                                                                   ZMB
                                                                                       ZWE         GHA                                                                                                                 BWA
                                                                                                        UGA ZMB                                                                                                 ETH
                                                                                                                                                                                                                 TZA GHA
                                         -0.05                              NGA        CIV             CIV                                                                              0.00          MDG
                                                                                                                                      LSO                                                              ZAF NGA
                                         -0.10                                                    CIV                                                                                                 CIV
                                                                                                                                                                                                     MLI
    age




                                                                          ZMB
                                                                                            NER
                                                                                                                                                   age
                                          0 15
                                         -0.15                             MDG                                                                                                       0 05
                                                                                                                                                                                    -0.05                 RWA
                                                         CIV                                                                                                                                                       LSO

                                         -0.20
                                                                                                                                                                                                         BDI
                                         -0.25                                                                                                                                      -0.10
                                                  0.25

                                                           0.20

                                                                   0.15

                                                                            0.10

                                                                                     0.05

                                                                                              0.00

                                                                                                        0.05

                                                                                                               0.10

                                                                                                                        0.15

                                                                                                                               0.20

                                                                                                                                        0.25




                                                                                                                                                                                        -0.05            0.00            0.05           0.10           0.15
                                                 -0

                                                          -0

                                                                  -0

                                                                           -0

                                                                                    -0

                                                                                              0

                                                                                                        0

                                                                                                               0

                                                                                                                        0

                                                                                                                               0

                                                                                                                                        0




                                                                                                                                                                                               Average annual change i l (
                                                                                                                                                                                               A            l h                     it income)
                                                                                                                                                                                                                     in log (per capita i    )
                                                         Average annual change in log (per capita income)
                                            Sources: Chen and Ravallion (2007), and IMF, staff calculations.
Challenges(2): Public Investment
                          Public investment
   12                     (Percent of GDP)                    12
           High growth                          High growth
   11     resource rich                       nonresource rich 11

   10                                                         10

    9                                                         9

    8                                                         8

    7                                                         7

    6                                                         6
                      Medium
    5                                                         5
                      growth                     Low growth
    4                                                         4
        1985 1988 1991 1994 1997 2000 2003 2006
         Source: IMF, African Department database.
            Challenges (3): Exports
                    Exports of Goods and Services
70                                                                               70
                                 (Percent of GDP)

60                                                                               60

50                                                                               50
                High-growth
               resource-rich                                Medium-
                                                             growth
40                                                                               40

30                                                                               30
                    Low-growth
20                                                                               20
                                          High-growth
                                        non-resource-rich
10                                                                               10

0                                                                                0
     1985    1988     1991       1994   1997    2000        2003   2006   2009
Now some challenges (4):
E l       t? G d j b ?
Employment? Good jobs?

Data?
The l     t
Th lamppost
                     Outline
Some stage-setting: the baby and the bathwater
   SSA take-off
   A bit about distribution
What about employment?
The framework: weaknesses indeed, but are these the main ones?
   Is low inflation a source of constraint on access to finance?
   Cliffs and loss functions
   Better understanding of how to do monetary policy in LICs?
Some issues in macro/development interactions
   Debt sustainability
        Public investment, social protection, and other goals
   Exchange rates
What do we know about employment creating growth, and what
macro has to do with it? (No answer here)
             The MMF

Inflation targets too low?
Fiscal policy t rooted i d bt
Fi     l li too         t d in debt
sustainability?
Cliffs and loss functions
     , g        ,           ,             y
Aids, irrigation, fertilizer, social safety
floors, public investment, . . .
Wages,           investment
Wages public investment, and
competitiveness—A Senegal parable
                     Outline
Some stage-setting: the baby and the bathwater
   SSA take-off
   A bit about distribution
What about employment?
The framework: weaknesses indeed, but are these the main ones?
   Is low inflation a source of constraint on access to finance?
   Cliffs and loss functions
Some issues in macro/development interactions
   Debt sustainability
   Exchange rates
What do we know about employment creating growth, and what
macro has to do with it? (No answer here)
                                                       A Story
                                                  (from Rodrik 2008)

                                  China                                                                       India




                                                                                                                                      .02 .04 .06
-1 -.5 0 .5 1




                                                                                           1
                                                            .1
   dervaluation




                                                                              dervaluation
                                                                                    .5
                                                            growth




                                                                                                                                      growth
                                                              .05




                                                                               0
 Und




                                                                            Und
   -




                                                            0




                                                                                                                                      0
                                                                         -.5
                    1960   1970   1980     1990    2000                                        1960   1970   1980     1990   2000
                                    year                                                                       year

                            lnUNDERVAL             growth                                              lnUNDERVAL            growth



                                  Uganda                                                                     Tunisia




                                                                                                                                      .02 .03 .04 .0 .06
-1.5 -1 -.5 0 .5




                                                                   .05




                                                                           .2 .4 .6
            ation




                                                                                  ation




                                                                                                                                                   05
   Undervalua




                                                                         Undervalua
                                                                 h
                                                            growth




                                                                                                                                             growth
                                                                                                                                                  h
                                                                                 4
                                                              0
                                                            -.05




                                                                                 0




                    1960   1970   1980     1990    2000                                        1960   1970   1980     1990   2000
                                    year                                                                       year

                            lnUNDERVAL             growth                                              lnUNDERVAL            growth
                                         How General?

                                          Growth and the Real E h
                                          G                        Rate
                                              th d th R l Exchange R t
                .6
                              wth




                                                                           GNQ
    log of real pe capita grow
                            .4




                                                                             BIH
                    .2




                                                                            SUR
                                                                            BWA
                 er




                                                                    CMRROM DJI SWZMUS
                                                                           BWA
                                                                         NAMNAMNAM
                                                                               PRT NAM
                                                                 TON LBNNAM CPV CPV
                                                                                 ZWE
                                                                             SGP THA
                                                                   BWAMYSBLZZWESWZ GEO GEO
                                                              BRALBR TWNCRI DMA ZWE ARM
                                                                               LCA ROM
                                                                            PNGRWA
                                                                   BWATWNCPVTUN CHN
                                                                           CUBBLZECU
                                                                 GHA CUBZWEDOM   PNG
                                                                               CPVTHA
                                                                         DZA FJIDMA CHN
                                                               SUR PANMEXNAMCOL MUS
                                                                                              UKR
                                            ROM    ROM       BRA TURJORSLBGNQPRY GIN MDA
                                                                            CHLCUB CMR
                                                                           MYS MDV NIC
                                                                                 ZWE
                                                                             CRIJAM IDN MOZ GIN
                                                                               PRYCPV
                                                                              CPVCOL LKA
                                                                          MEXCOL ALBGIN
                                                                     URYPERDOMTUN ZWE
                                                                          DOMMYSGINPER
                                                                                  SLV
                                                                       JAM CHLCMRSLV
                                                                         TUR BLZCOM CHN
                                                                      PAN TURTUNALB
                                                                         DOMGTMPRY
                                                                          TWNTUNDZASLV IDN
                                                                               MDV JOR
                                                                         MYS GRDMAR
                                                                      JORPRYCUB ECU
                                                                             LCA GIN GIN
                                                                        GRDLCAECUDZA
                                                                                  PER RWA
                                                                    FJIVUTTHA FJI HTI
                                                                             COL
                                                                    ZMBDZAWSMMAR
                                                                         CMR ZWE ECU
                                                           NGASURFJIMYSVUTBLZPHLPHLCOM
                                                                         CPV JAM
                                                                 SUR PANGTM TUNSLV AFG
                                                               TURNERCMR MDVECUPNGAZE
                                                                 CMRLBN TUNSLBROM LKA
                                                                           DZAUGA
                                                                                DZA
                                                                      JAMTURECUCOM
                                                                           COLDJI
                                                                          MAR THA
                                                                    TGOFJIPERPRYDOM LKA
                                                                        TURMDV PNG
                                                                            BOLGIN
                                                                     TURTHAHA COM GHA
                                                                     JAMMDVGTMDMA PRY
                                                               GNQGHAPERBLZPHLLKA IND
                                                                    SENTZAPAK GTM HLBGD
                                                                      DOMPOLECUIDN
                                                                        TON FJIPER MAR
                                                                           CMRCOM
                                                                       CMR DZA PHL
                                                                                JOR
                                                                     MOZWSMBOLGININD
                                                                        HND SLV PHL
                                                                   WSMLBRIDNMAR HTI VNM
                                                                    CPVRWAGTMPER LKA
                                                                                SLV
                                                                         RWA GRD PHL
                                                                       SENKEN BOL ROM
                                                                         BEN WSM OL
                                                                        JAMTON PER
                                                                          GRDJOR
                                                                       HNDBDISLVGNQ
                                                                    TGOIDNTBIH IND MOZ IND
                                                                            MAR
                                                                            GTM MAR
                                                                         JAM SEN PRYNIC
                                                               ZMBCHNLKASDNKENPBGDUZBPNG
                                                          GNQZMB CAFLBRGHALSODJI IDNCOMVNM
                                                                      SLEMWIDJIRWA
                                               MNGMNG MOZ NGA KENSENZWESLVPAK PAK UKR
                                                                    JAMBDIIDNJORPAKNIC
                                                                           KENJOR
                                                                           ETHGTM
                                                                                PHL
                                                                           WSMBOL LSO
                                                                      HNDMDGCHNBFA VNM
                                                                   BENSENIND SENNIC AZE
                                                                          MLI BEN
                                                                                                TJK
                                                                                                 UZB
                                                                         BEN BOL CUB
                                                                            NGA
                                                                     TCDCAFECUSLE
                                                                           MAR UGA
                                                                        SEN TCD BHTIHTI
                                                                           MLI PNG
                                                                          TONLSO UGA
                                                                           NGAKEN BGD
                                                                           GMBSLB SLENPL
                                                                           PAK TON NPL
                                                                            JOR MLI PAK
                                                                 VUTBENPAKBOLTCD AFG
                                                                          GHA IDN
                                                                            HND
                                                                       SLEGNQHND
                                                                         SEN DJI
                                                       MOZ NIC GMBGNQVUTBGDHTI
                                                                       KEN VUTKEN
                                                                     MDGNERLKACOM
                                                                         DOMTCD
                                                                       HNDVUTBGD
                                                                            MDG
                                                                          ZMB SLB
                                                       GHA MOZ PAKMRTBENBDI BGD
                                                                     KENWSMGNB
                                                                           BFA GHA
                                                                        ZMB MLI LSO
                                                                          TGOHND
                                                                           ZMB SLE
                                                                        HNDLSOMNG
          0




                                                                         TGO TZA HTI
                                          MNG GHA ZAR
                                                    UGA ZARSDN BTNBFARWA BFAMOZ
                                                                        BOL
                                                     SUR NGA BENLKANERBTN COM
                                                                         MLI
                                                          SDN MRTNERINDGMB
                                                            GNB CAFKIRMDG NPL
                                                                       IND UGA
                                                                     CAF LSO
                                                                    MDG NER MNG
                                                                          GMB
                                                                          GNB
                                                             CHN UGA BENMLITCD AFG NPL
                                                                     MRT MDG
                                                                       TCD GMB
                                                                        GMB
                                                                         CAF
                                                            TON BFAKIR KIRMLI
                                                NGANGA GNB GMBMWIINDBTNNERMRT NPL
                                                                    MOZ BDI MRT
                                                            SDNMWI BDITGORWA
                                                                         TGO
                                                                         ZAR
                                                                        BFA
                                                    UGABTN
                                                                          ZMB
                                                           GNBMRTNGASOMNPL MWI MDA
                                                          CHNSOMMWIMWIBTNMWI ETHBDI
                                                                       TCD MDG
                                                                        TGOMWI
                                                                         MLILSO
                                                                         NPL
                                                                TZAGNBLBR ERI BDI
                                                                  KIR ETH SLB KHM
                                                                UGABTNTZACAF NER
                                                          TZASDNETHBFAMDG KHM AFGETH
                                                                          SOM
                                                                 MNGZMBNPLSLB
                                                          GNB TZA ZAR SOM
                                                        CHN TZAETH
                                                                          KIR
                                                                         NER
                                                         TZA       ETH ZAR
                                                                    KIR
                                                                  TCD
                                                              AFG ETH KHM AFG SOM
                                                                              SDN
                                                                            GNB SLE SOM     TJK
                                                                          KHM ERI
                                                                         KHM KHM
                                                                         ZAR RWA
    l




                                                                        LBR
-.2




                                                                     LBR

                                    -3     -2               -1            0             1              2
                                                log of real exchange rate undervaluation
                                                  g               g

                                                  confidence interval             fitted values
                                                  Non-Africa                      Africa
From Arslanalp et al. (2010)
                                    trade-
                               Some trade-offs
            (Real GDP, percent deviations from baseline due to 6 percent of GDP aid surge)
               Moderate Externalities                              Strong Externalities
20                                                      20



15                                                      15



10                                                      10

                                                                         Dutch Vigor

 5                                                       5
                                                                             No aid Surge

 0                                                       0

                                                                                       Dutch Disease
                     No aid Surge
-5                                                      -5
      0         5         10         15            20        0      5             10          15           20
                         Years                                               Years
              Low Efficiency     High Efficiency                 Low Efficiency          High Efficiency

     Source: Fund staff model simulations.
                                            Tunisia
30                                                                                                                     75
                                                                                             Undervaluation
                                          Growth of Real
                                          Government Net
                                                                                              (right   l )
                                                                                              ( i h scale)
20                                                                                                                     50
                                           Capital Stock
                                                                                                 Public Investment
10                                                                                               (percent of GDP)      25


 0                                                                                                                     0

                                           Growth of Terms of Trade (right scale)
-10                                                                                                                    -25
      1965   1968   1971   1974   1977   1980    1983      1986      1989      1992   1995   1998     2001     2004
                                                     Year
                                                     Y
 20                                                                                                                    9.0

                                                     Log Real GDP per Capita
                                                           ( g         )
                                                           (right scale)
 10                                                                                                                    8.5
                                                                                                                       85



  0                                                                                                                    8.0

                                                  Growth of Real GDP per Capita

-10                                                                                                                    7.5
      1965   1968   1971   1974   1977   1980    1983      1986      1989      1992   1995    1998    2001      2004
                                                     Year
               New Outline
Some stage-setting: the baby and the bathwater
   SSA take-off
   A bit about distribution
What about employment?
The framework: weaknesses indeed, but are these the main ones?
   Is low inflation a source of constraint on access to finance?
   Cliffs and loss functions
Some issues in macro/development interactions
   Debt sustainability
   Exchange rates
What do we know about employment creating growth, and what
macro has to do with it? (No answer here)
      Yo
Thank You
What is not driving growth (1): Endowment
                 d        h
              and geography
                 Sub-Saharan Africa Real GDP per Capita Growth
                               (Annual P
                               (A             t)
                                      l Percent)

      5                                                   1980–94
                                                          1995–2009
      4                                      Resource
                                             R                         Non-
           Sub-Saharan
                                             intensive               resource
              Africa
      3                            Non-oil                          Landlocked

      2

      1

      0
                       Oil-                                Non-
      -1             exporting
                       p     g                           resource
                                                          Coastal
                                                          C   t l
      -2
     Source: IMF, World Economic Outlook
What has helped (1): Avoid Major
 P li Disasters, e.g. conflicts
 Policy Di t              fli t
          Number of Conflicts in Sub-Saharan Africa, 1989–2005
  25



  20



  15



  10



   5



   0
       1989   1991    1993    1995     1997    1999    2001    2003   2005
        Source: Uppsala University, Uppsala Conflict Data Program.
What has helped (3): Structural
  R f     Lib li d Trade
  Reform--Liberalized T d
                                                                        1
                   Sub-Saharan African Trade Liberalization
                           (Number of countries)
  3




  2




  1




  0
   1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
      1
          Six of the high growers liberalized trade during the 1990's
          Sources: Wacziarg and Welch (2008); and UNCTAD.
         What has helped (4):
                    I fl
          Ri i Aid Inflows
          Rising
10.0                                                                                                      4.8


 9.9
                                                                  log of aid to
                                                                      SSA                                 4.7
 9.8
 98                                                             (Constant 2005
                                                                   dollars, left
                                                                     scale)
 9.7
                                                                                                          4.6
 9.6


 9.5
                            log of SSA real                                                               4.5
                               per capita
 9.4                             income
                              (Right scale)

 9.3                                                                                                      4.4
       1980

              1982

                     1984

                             1986

                                    1988

                                           1990

                                                  1992

                                                         1994

                                                                1996

                                                                       1998

                                                                              2000

                                                                                     2002

                                                                                            2004

                                                                                                   2006
       Sources: Roodman (2006), and IMF, staff calculations.
  What has helped (5):
Political/structural reform
                Constraints on Chief Executive
 5                                                            5
                     (Rank, 1=low, 7=high)


 4     High grow th                                           4
       nonresource
           rich
 3 M di
   Medium                                                     3
   grow th

 2                                                            2
                                             High grow th
                                            resource rich
                  Low grow th
 1                                                            1
     1985 1988 1991 1994 1997 2000 2003 2006
      Source: Center for Systemic Peace, Polity IV dataset.
Challenges (2): Economic/structural
              Policies
                            CPIA Structural Policies
   4.0
                               (Index, 1=low, 6=high)

                              High-growth
                            non resource rich
                            non-resource-rich
   3.5

                     Medium-
                      growth
   3.0


             High-growth                                Low-growth
   2.5      resource-rich




   2.0
   20
         1998        2000          2002         2004      2006       2008
Growth of Exports: Uganda
          Exports of Goods as Share of GDP in Uganda and the
                      Sustained Growth Countries
  35
                          SG average

  30                      SG minima
                          Uganda
                          U   d

  25


  20


  15


  10


   5


   0
       t-10   t-7   t-4   t-1   t+2    t+5   t+8   t+11 t+14 t+17 t+20
What is not driving growth (3): Terms
                f Trade
               of T d
    300
                           Sub-Saharan Africa Terms of Trade
                           S S           f           f
                                 (Index, 1995 = 100)
                                                            High-growth
    250
                                                           resource-rich


                                 High-growth
    200
                               non-resource-rich
                 Medium-
                      th
                  growth
    150                                                          Low-growth



    100


    50
          1985     1988    1991   1994     1997    2000   2003   2006      2009

     Source: IMF, World Economic Outlook

								
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