The Global Financial Crisis and Africa’s “Immiserizing Wealth”

Overview
  • INSTITUTE:
    UNU-MERIT
    PUBLISHER:
    United Nations University Press
    VOLUME:
    Research Brief No. 1, 2010
    TITLE:
    The Global Financial Crisis and Africa's “Immiserizing Wealth”
    AUTHORS:
    by Alexis Habiyaremye and Luc Soete
    PUB DATE:
    2010•02•27
    ISSN WEB:
    1816-5796
    ISBN 10:
    978-92-808-3515-1
    COPYRIGHT:
    Licensed under the Creative Commons Deed “Attribution-NonCommercialNoDerivs 2.5”

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    Before the current global recession, many resource-rich African countries were recording unprecedented levels of growth due to a raw material price boom. However, the collapse in raw material prices and the ensuing severe economic difficulties have again exposed the vulnerability of these countries’ natural resource export-focussed economic structures.

    In this research brief, we describe how Africa’s abundance of natural resources attracted disruptive and predatory foreign forces that have hindered innovation-based growth and economic diversification by delaying the accumulation of sufficient stocks of human capital. We suggest that for their long-term prosperity, resource-rich African countries shift their strategic emphasis from natural to human resources and technological capabilities needed to transform those natural resources into valuable goods and services to compete in the global market.