Opinion
Will Africa leave the World Bank behind?
Morocco is a classic example of this, with a raft of government-led development institutions – from the Caisse de Dépôt et de Gestion to the Société Nationale d’Investissement – which have been critical in creating an industrial fabric around Tanger-Med that includes training institutes designed by the private sector and paid for by government.
At the Bank, Lin published New Structural Economics under the World Bank imprint. One chapter of the book is a debate between Lin and South Korean economist Ha-Joon Chang. Chang is the author of a book excoriating the “Bad Samaritans” – World Bank included – who advise developing countries to ad- opt policies that they themselves did not follow.
Chang’s ideas find ready defenders on the continent. “British industry was protected during the industrial revolution,” says Central Bank of Nigeria governor Lamido Sanusi. “In America, Alexander Hamilton protected infant industry; the Asian countries also did”.
Chang’s vision of state-led development is more muscular. It takes the example of South Korean steel company POSCO.
The World Bank refused to fund it in the late 1960s on the grounds that Korea did not have reserves of coking coal and iron ore, and its companies were exporting fish and clothes. POSCO is now the third-largest steelmaker in the world and one of the most profitable.
Ethiopia has also decided to leapfrog into heavy industry, creating the Metals and Engineering Corporation (METEC) in 2010. It will have the US$5 billion Grand Ethiopian Renaissance Dam as an anchor client. The World Bank is likely not to fund the dam.
“Industrialization is not a luxury for Africa but a necessity for its longterm survival,” the African Union Commission chairwoman Nkosazana Dlamini-Zuma told delegates at a March conference in Addis Ababa.
But how much does the World Bank subscribe to this idea?
