Essential reading for any economist, is the seminal The Economist: The World In series. The 2011 edition has just been released, and just like Development Afrique did last year covering the 2010 edition, so we shall look at what was said in the 2010 publication, if it came to pass or not, and what The Economist predicts for 2011.
The World In 2010: Africa Retrospectively.
” The World Cup will be a chance to showcase Africa, but can Africa handle the pressure? Despite high levels of violent crime, unhappy construction workers and a shaky economy, South Africa will prove the sceptics wrong…..for the first time, other Africans will see that South Africa is in many ways more closer to Australia or Argentina than to their ramshackle countries.” Apart from on the pitch, the FIFA 2010 World Cup was a success in organization and South Africa joining the list of countries capable of hosting the world. Africa was united from Cape to Cairo with the progress of Ghana to the Quarter Finals, and 1 penalty kick away from the Semi Finals.
“Somalia would be little noticed were it not for its fastest growing industry: piracy.” Somalia continues to be the country that refuses to integrate itself to the continent, let alone the world. Piracy is still a vibrant business, 44% of global piracy attacks on the seas are occurring off the coast of Somalia. Al-Shabab still have a strong influence on the country, and with that still in place, piracy will continue.
“Unlike other countries that have had to implement stimulus packages, South Africa’s public investment programme predates the economic crisis. Money is not being spent on bailing out banks or badly run private enterprises, but on building roads and schools.” How things can change. The World Cup ran smoothly, but post the football festival, a crippling national strike over wages, and the continued strengthening of the Rand that has seen a revision of the role of the Reserve Bank of South Africa. These issues need to be addressed in the short to medium term before they become a burden in the long term.
The World In 2011: Africa
“Sub-Saharan Africa will be one of the fastest-growing regions of the world in 2011, thanks to surging demand both from abroad and at home. As a result, investors will find it increasingly difficult to ignore the area.” The developed world is currently dragging itself from the ashes of the 2007 Financial Crisis and subsequent recession, with austerity measures fuelling quantitative easing to drive up demand and growth. Sub-Saharan Africa on the other hand has increasing Urbanisation rates, increasing personal incomes, and insatiable demand for raw materials from the rest of the World. Africa will increasingly be a destination for investment, especially with low interest rates in the developed worlds, Africa can offer substantially higher returns on investments.
“The emergence of South Sudan as the worlds newest country will not spark a new war. Instead, the conflict will be within South Sudan. This is a place of tribes, jealous of their cultures and lands. The largest think they have a natural claim on the oil revenue that will come with independence. Where oil is the only resource beyond the subsistence economy, that is a recipe for disaster.” All indications point to it not being a matter of if, but when South Sudan elects to secede from Khartoum, that the real struggle will occur. As yet, voting formalities haven’t been ironed out as who will be eligible to vote and is not, and the big question, will the Omar al-Bashir government recognise the outcome? Testing times ahead for South Sudan, independence is not always the easiest of things to manage.
Among other features, The World In 2011 predicts the economic fortunes and main economic/political events of Algeria, Angola, Cameroon, Egypt, Ethiopia, Kenya, Libya, Morocco, Nigeria, South Africa, Tanzania and Zimbabwe.