Overview: Market Access Strategy in a New Trade Environment 23
alone will not by themselves guarantee gains—unless they are accompanied by significant efforts in focused industrial, trade, and competition policies to take advantage of such opportunities.
How Could Regional Integration Initiatives Help This Dual Strategy to Succeed? To succeed in the proposed dual strategy—boosting exports through preferential access to the EU and US markets and diversifying their market access to Asia—Sub-Saharan African countries would need to be better integrated and deepen trade with each other. Despite some progress in recent years, African countries still have thick trade barriers around their borders, which exacerbates the fragmentation inherited from colonization and makes Africa the continent most prone to ethnic-based conflicts. The region’s countries also have some of the smallest domestic markets in the world, except for the three resource-rich middle-income countries—Angola, Nigeria, and South Africa—and a few less-resource-endowed countries, such as Ethiopia. Prospects for Africa’s Access to Global Markets: Policies and Challenges Which policies can help overcome the triple disadvantage of low economic density, long distance to world and regional markets, and thick borders? The development experiences of the East Asia and Pacific region and, recently, South Asia make the answer clear: (a) use the advantage of low labor costs and a large domestic labor force that is perhaps just moving out of agriculture in search of employment; (b) provide political and macroeconomic stability; and (c) work closely with foreign investors to arrange for better local infrastructure and access to export routes. These policy lessons are actionable recommendations for national governments in many areas, such as the emphasis on bolstering investment in infrastructure and human capital and improving market and government institutions. But various circumstances make it difficult for countries in Sub-Saharan African to replicate East Asia’s success by integrating globally: • Relative size of populations, markets, workforces, and economies. Most African countries are smaller than those in East Asia in population, size of the domestic consumer market, percentage of the labor force with a minimum primary education, and economic proximity to global markets or neighbors. For example, Sub-Saharan African countries have a median population of about 12 million, compared with 50 million in emerging Asia (excluding China and India). • Lagging competitiveness, scale, and connectivity. Global trade integration has advanced considerably since the 1960s, when the East Asian Tigers began their dramatic rise. And global markets have become considerably more contested and production much more
