Africa and Arab Gulf States: Divergent Development Paths and Prospects for Convergence

Hippolyte Fofack

doi:10.5325/jafrideve.12.1.0097

Abstract

AbstractIn spite of the similarities between Sub-Saharan Africa and the Arab Gulf Cooperation Council states, development policies in these two regions of the world have produced markedly divergent outcomes. The remarkable increase in personal income and large current account surpluses in Arab Gulf states contrast with widespread poverty and balance of payments crises in Sub-Saharan Africa. This paper reviews the causes of these divergent development paths and discusses the prospects for economic convergence in the growing trade ties between the two regions. It shows that development models underpinned by institutional continuity and intergenerational accountability could enhance long-run growth in Sub-Saharan Africa and income convergence between the two regions.

Highlights

Over the last few years, the development community and increasingly a growing number of scholars have focused their research on China’s ascent to global economic power status [Aslund and Dabrowski (2008)]
Attempts to explain the African development paradox of persistent widespread poverty in the midst of resource abundance have often drawn on the oddity of resource-poor countries outperforming resource-rich countries
The implied systematically higher growth performance of resource-poor countries underneath the oddity hypothesis underlines the resource-curse argument,. In this regard and the African economic tragedy oft-cited may be viewed as a fatality, not least because the resource-rich nature of the African continent is a given, and the alternative of transforming African economies into resource-poor by way of enhancing their growth and development performance is almost surely not an option

Summary

Introduction

Over the last few years, the development community and increasingly a growing number of scholars have focused their research on China’s ascent to global economic power status [Aslund and Dabrowski (2008)]. Others have analyzed China’s global economic ascent from the single prism of its growing economic partnerships with Sub-Saharan Africa (SSA), a region which until recently has continued to entertain exclusive economic ties with its former colonial powers in Europe [Goldstein et al (2006), Zafar (2007)].3. This overwhelming focus of the international community on China and its growing partnership with Africa has dwarfed another emerging pole and trading block—the Gulf Cooperation Council (GCC) [Sturm et al (2008)]. The resurgence of this latest regional partnership, which has not generated as much interest, should be of great historical significance, not least because GCC states have enjoyed twin surpluses for decades as reflected in their sizable holding of foreign currency-denominated assets, and and more importantly from the standpoint of the longstanding history between the Arab Gulf region and Africa, and owing to important similarities that exist between the two regions

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Conclusion