Knowledge Economy Gaps, Policy Syndromes and Catch-up Strategies: Fresh South Korean Lessons to Africa
2014.08.26 16:51:51

Africa´s overall knowledge index fell between 2000 and 2009. South Korea´s economic miracle is largely due to a knowledge-based development strategy that holds valuable lessons for African countries in their current pursuit towards knowledge economies.

Using updated data (1996-2010), this paper presents fresh South Korean lessons to Africa by assessing the knowledge economy (KE) gaps, deriving policy syndromes and providing catch-up strategies. The 53 African frontier countries are decomposed into fundamental characteristics of wealth, legal origins, regional proximity, oil-exporting, political stability and landlockedness. The World Bank´s four KE components are used: education, innovation, information & communication technology (ICT) and economic incentives & institutional regime. Absolute beta and sigma convergence techniques are employed as empirical strategies.

With the exception of ICT for which catch-up is not very apparent, in increasing order it is visible in: innovation, economic incentives, education and institutional regime. The speed of catch-up varies between 8.66% and 30.00% per annum with respective time to full or 100% catch-up of 34.64 years and 10 years. Based on the trends and dynamics in the KE gaps, policy syndromes and compelling catch-up strategies are discussed. Issues standing on the way to KE in Africa are dissected with great acuteness before South Korean relevant solutions are provided.

The paper is original in its provision of practical policy initiatives drawn from the Korean experience to African countries embarking on a transition to KE.

Paper available here

The paper have been ellected as First Prize: KOICA President´s Award for the Best Submission from a researcher from the 26 Priority Partner Countries of the Korean - See more here

Tags: Economics development | South Korea | Africa | Knowledge economy

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Nguena Christian Lambert
From Promise to Disappointment:
2014.08.23 17:11:32

On the Assessment of Reform impact on African Banking Sector Resilience to Macroeconomic Shocks.

Using a newly collected annual data on banking indicator for 143 banks of the 14 French Zone African countries member over the period 2003-2013, I recently undertook to assess qualitatively and quantitatively the level of resilience of the banking sector to macroeconomic shocks and highlight some major alternative policies that could be implemented.

For this purpose, I have presented an empirical literature review followed by a panel-based econometrics study has been investigated. The main result from the analysis was that, the sub region banking sector is relatively vulnerable to macroeconomic shocks.

Accordingly, the decrease of GDP per capita growth rate, long-term financing and real exchange rate as well as the increase of interest rate leads to lower bank provisions. Lower levels of short-term financing induce a lower level of net income commission, while the change in interest rates is an increasing factor. The influence of changes in interest rates on bank's interest margin remains ambiguous.

These results confirm the necessity of taking into account the existence of macroeconomic shock constraints in the implementation of financial policies in the sub-region.

The findings of this work are original in the manner it bridges some knowledge gaps of shock management in the monetary zone. It can offers policy makers two main insights: the potential rewards to timely intervening to mitigate potential shocks and; the need of better control for the credibility and sustainability of the banking system.

Full article available here.

Tags: Macroeconomics shocks | Banking economics | International economics | Banking econometrics | Panel data modelisation

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