Chart of the WeekWhen it Comes to Services vs. Manufacturing, Words Matter

2021-02-16T10:00:21-05:00February 16, 2021|

By Reda Cherif and Fuad Hasanov

Efforts to revive national manufacturing sectors get a lot of airtime. After all, the sector propelled many East and South East Asian economies—the so-called “East Asia Miracle”—and was a gateway to the middle class for millions of workers. However, for all the obsession with manufacturing, economists for their part seem to be more preoccupied with services.

To confirm this, we combed through thousands of IMF reports on countries’ economies from 1978 to 2019. Using 113 distinct terms related to growth theory and policy—ranging from “infrastructure” to “liberalization”—we computed the relative weights of each term across countries and years. As shown in our chart of the week, “services” is used more than any other term.

In fact, across all countries and years, “services” comprises about 20 percent of the occurrences of all terms, with tourism in particular getting more attention. “Agriculture” and “agricultural” are the second most frequently used terms, followed by “industry” and “industrial.” By contrast, “manufacturing” comes up only 2 to 5 percent of the time, depending on the income group (5 percent for advanced economies). “Manufacturing” appears even less often than terms such as “institutions,” “privatization,” and […]

The Decline in Manufacturing Jobs: Not Necessarily a Cause for Concern

2019-03-14T13:10:21-04:00April 9, 2018|

By Bertrand Gruss and Natalija Novta

April 9, 2018

Version in عربي (Arabic), 中文 (Chinese),  Español (Spanish), Français (French), 日本語 (Japanese), Português  (Portuguese), Русский (Russian)

Textile manufacturing plant in Recife, Brazil: in many countries, the share of manufacturing jobs is declining (photo: Ingram Publishing/Newscom).

Manufacturing jobs are waning. In many emerging market and developing economies, workers are shifting from agriculture to services, bypassing the manufacturing sector. In advanced economies, the rise in service sector employment typically reflects the outright disappearance of manufacturing jobs. […]

Sub-Saharan Africa: Diversifying for Tomorrow

2019-03-14T15:31:34-04:00February 16, 2018|

By IMFBlog

February 16, 2018

Photo: iStock by Getty Images/subman

Countries in sub-Saharan Africa need to diversify their economies, and the region’s youth need to be at the heart of it, says Axel Schimmelpfennig.

Schimmelpfennig is head of the IMF team for Uganda, and a coauthor of a study that looks at the potential benefits of a stepped-up diversification agenda in sub-Saharan Africa.

In this podcast, Schimmelpfennig talks about the need for sub-Saharan Africa to increase productivity in areas like agriculture and manufacturing to become more competitive in the export market and allow for increasing wages. […]

Helping Feed the World’s Fast-Growing Population

2019-03-26T12:59:13-04:00January 31, 2017|

rabah-arezki-imfBy Rabah Arezki

Agriculture and food markets are plagued with inefficiencies that have dramatic consequences for the welfare of the world’s most vulnerable populations. Globally, farm subsidies amount to over $560 billion a year—equivalent to nearly four times the aid given to developing countries by richer ones. Major emerging-market nations have increased subsidies rapidly, even as rich nations cut theirs drastically. Meanwhile, tariffs on farm products remain a major point of contention in global trade talks.

One third of global food production goes to waste, while food insecurity is still rampant in developing countries. Even with the explosion of agricultural productivity since the middle of the 20th century, food security remains a challenge for much of the developing world. Food-calorie production will have to expand by 70 percent by 2050 to keep up with a global population that’s forecast to grow to 9.7 billion from last year’s 7.3 billion. Food insecurity can lead to violence and conflicts that can spill over well beyond borders.  […]

Moving On Up: The Growth Story of Frontier Economies

2017-04-14T01:49:12-04:00December 16, 2014|

Min ZhuBy Min Zhu

(version in Español)

The growth story for frontier economies isn’t the same as China’s in the last two decades, or the United States a hundred years ago.  These fast growing, low-income countries have their own story, and it’s not what you might think.

In May of this year, I wrote about who they are and how they are different, and now I want to go into a bit more detail about how their economies have been on the rise and how they have moved themselves to the frontier.

[…]

In Mozambique—and In Africa—Rising Requires Resilience

2017-04-14T01:55:23-04:00September 3, 2014|

Doris RossBy Doris Ross

Three months ago African leaders and policymakers assembled in Mozambique under an “Africa Rising” banner to assess the continent’s strong economic performance. But while the outlook for the continent remains strong, individual countries have faced problems and the uncertain global outlook continues to pose risks. Against this backdrop, what are the policies that Africa should pursue to sustain the positive momentum for the continent?

In reality, Africa Rising has never been about unbridled optimism; it has been a tale of strong growth tempered by serious challenges. And rising in economic terms is as much about sustaining expansion as about the dimensions of growth itself. The extended process of African development also requires increased resilience to shocks, and it is this resilience that may be tested by economic problems in some African nations.

Strong growth—and increased resilience—were the focus of the Africa Rising conference organized in May by the IMF and the government of Mozambique in Maputo. The nearly 1,000 officials, corporate executives, civil society representatives, and journalists who gathered for the two-day event discussed the difficult issues that must be addressed if Africa is to […]

How Low-Income Countries Can Diversify and Grow

2017-04-14T01:59:51-04:00May 28, 2014|

By Chris Papageorgiou, Lisa Kolovich, and Sean Nolan 

(Version in Español)

Low-income countries have spent a lot of time thinking about how they can achieve faster growth, and we have done some research to help them. We found that pursuing export diversification is a gateway to higher growth for these economies. Using a newly constructed diversification toolkit, our empirical analysis shows that both the range and quality of the goods a country produces has a direct impact on growth 

Country trends 

Low-income countries have historically depended on a narrow range of primary products and few export markets for the bulk of their export earnings.

But export diversification is associated with higher per capita incomes, lower output volatility, and higher economic stability—relationships that can be tracked using our new publically available  dataset, which gives researchers and policymakers access to measures of export diversification and product quality for 178 countries from 1962-2010.

We have looked at two measures of export diversification and their impact on economic growth.  One measure captures diversification into new product lines, the other development of a more balanced mix of existing products.  Analysis using these measures shows that export diversification in low-income […]

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