to English influence (Pittaluga).
23They kept Russia on the sidelines and were helped by the German Russian agreement at Rapallo.
24For instance, while in 1923–1924 Strong supported British plans that linked Austria and Hungary currencies to the British pound, the Americans balked at the British attempt to link the new German currency with sterling during the Dawes Plan negotiations.
25The British ambassador to Washington summed up the problem in early 1921 as “the central ambition of American politicians is to be the leading nation in the world and also among the English-speaking nations. Apart from having the strongest navy and the largest mercantile marine they intend also to prevent us from paying our debt by sending goods to America and they look for the opportunity to treat us as a vassal State so long as the debt remains unpaid.” (Quoted in Costigliola, 1977, p. 913.)
26The Bank of France was usually represented by the deputies as Moreau; the head did not speak English.
27He provided a loan from the NY Fed of US$200 million to England and arranged for a loan of US$300 million from J.P. Morgan to provide reserves in case sterling came under pressure.
28The French tried to convert their accumulated sterling reserves to gold in order to force England to renegotiate the war time loans.
29It is interesting to speculate how the conference might have turned out if the negotiators from the United States had been able to offer war-debt cancellation, exchange stabilisation, tariff reduction and support for an IMF in order to obtain acceptance abroad of the cooperative recovery programme outlined in the president’s instructions to the United States delegation.
30For a more sympathetic evaluation of Roosevelt’s reluctance to provide the public good of monetary stability, see Morrison (1993).
31It is important to remember that after the Asian crisis of 1997 a Financial Sector Assessment Program (FSAP) run jointly by the IMF and the World Bank was started. Under it, the working of the financial sector was studied to see whether companies were following the rules recommended by the relevant international body.
Furthermore, stress tests were conducted. Countries were subjected to such analysis. But the US refused to participate in any analysis of its financial system and we know that the 2008 crisis originated in the US financial system.
32Even at the height of the recession the BIS was calling for an increase in the rate of interest and as the reason they gave was seen to be irrelevant they gave new reasons. It is perhaps because they believed that it was impossible to change the mindset of central bankers and their prejudices would be strengthened if there was a body such as the BIS, both Keynes and White had wanted the BIS abolished.
33Even now the threats to multilateralism seem to be coming from the US. Earlier, the US had withdrawn from or not signed onto such multilateral initiatives as he law of the sea, the international court of justice or the Paris accord on climate change.
Chapter 2
The Economic Situation of Countries in Sub-Saharan Countries: What Can Be Done by the G20?
Manmohan Agarwal
Centre for Development Studies Thiruvananthapuram, India [email protected]
Amrita Brahmo
Research and Information Systems for Developing Countries, New Delhi, India [email protected]
Abstract
Economic growth in Sub-Saharan Africa (SSA) has lagged behind that in other regions over the past half century (1965–2016). An earlier paper had shown that the hypotheses that civil strife and SSA as the home of many of the least developed countries accounted for this poor performance could not be supported. This chapter explores this question further. SSA still remains less integrated with the major fastgrowing regions of the world. Its savings rate also continues to be low. This makes it more dependent on foreign capital flows for investment. But aid has been declining and the current account has deteriorated in many countries. After a period of rapid growth earlier in this century, prospects look gloomy unless the G20 steps in to provide more easy aid.
Introduction
Economic growth in Sub-Saharan Africa (SSA) has lagged behind that in other regions over the past half century (1965–2016). The actual performance can be contrasted with its potential. Many analysts have rated its potential for growth very highly. A key question thus arises as to why the region has performed so poorly.1 A major reason that has been advanced is poor governance, which manifests in the form of high levels of political instability and civil unrest because of an extremely fractured society with many cleavages.2 SSA has a large number of least developed countries (LDCs) as defined by the United Nations (UN) and also most of the failed fragile states as defined by the United Kingdom’s aid agency, the Department for International Development (DFID). The UN lists 48 countries as LDCs, and SSA contains 33 of these.3 However, there is no conclusive evidence that the LDCs have performed more poorly than those considered more developed or that the fragile states have performed more poorly. In the following section, we note briefly that Africa has performed more poorly than other regions. The low rate of growth of per capita income is accompanied by low levels of investment. Also, the African countries have not benefitted from their greater integration with the world economy. They have a high share of exports in GDP, but this has increased very slowly. We distinguish countries by the nature of commodities that dominate their export basket.
In the third section, we further study performance in terms of export orientation. This analysis concludes that the weakest performance is by exporters of manufactures. Furthermore, we find that the performance of African countries seems to be influenced considerably by international factors. It is therefore important that the system of international economic governance including the The list also has a footnote that says General Assembly resolution 68/L.20 adopted on December 4, 2013, decided that Equatorial Guinea will graduate three and a half years after the adoption of the resolution and that Vanuatu will graduate 4 years after the adoption of the resolution. UNCTAD prepares an annual report on the LDCs. We have used the 2011 Report. G20 must seek to raise the growth rate of GDP in the developed countries, reform the institutions such as the World Bank and the International Monetary Fund (IMF) to increase the voice of developing countries and reverse the trend of the declining importance of aid.
We also compare the performance of countries in Latin America (LA) with those in SSA by export orientation. Countries in SSA have grown more slowly than those in LA even when the export orientation was similar. However, the increase in share of exports of goods and services (XGS) in GDP and of gross fixed capital formation (GFCF) in GDP has generally been greater in SSA when countries with similar export orientation are compared. The final section has the conclusions from our analysis.
African Economic Performance — Growth, Exports and the Current Account
In this section, we compare the performance of countries in SSA with those in other regions. In the last five decades (1965–2015), SSA has been one of two regions that has fallen further behind the high-income countries with the gap in per capita incomes increasing (
