As the debate about age limits for presidential candidates rages on, their is good news for Uganda on the economic front.
Also, in line with government’s Vision 2040 where Uganda is being strategically lined for middle income status, the economic growth rates look rosy, if these latest reports are to go by.
The Center for International Development (CID) at Harvard University in their latest report say India and Uganda top the list of the fastest growing economies to 2025, at 7.7 percent annually, but for different reasons.
Uganda joins three other East African countries in the top 10 fastest growing countries, though a significant fraction of that growth is due to rapid population growth.
On a per capita basis, Uganda is the only East African country that remains in the top 10 in the growth projections, though at 4.5 percent annually its prospects are more modest.
On the other hand, the researchers attribute India’s rapid growth prospects to the fact that it is particularly well positioned to continue diversifying into new areas, given the capabilities accumulated to date. India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics.
Growth in emerging markets is predicted to continue to outpace that of advanced economies, though not uniformly. The projections are optimistic about new growth hubs in East Africa and new segments of Southeast Asia, led by Indonesia and Vietnam.
The growth projections are based on measures of each country’s economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities.
New Economic Complexity Index Rankings
CID also released new country rankings of the 2015 Economic Complexity Index(ECI), the measure that forms the basis for much of the growth projections. The ECI finds the most complex countries in the world, as measured by the average complexity of their export basket, remain Japan, Switzerland, Germany, South Korea, and Austria.
Of the 40 most complex countries, the biggest risers in the rankings for the decade ending in 2015 have been the Philippines (ECI rank: up 28 positions to rank 32nd globally), Thailand (+11 to 25th), China (+10 to 23rd), Lithuania (+9 to 30th), and South Korea (+8 to 4th). Conversely, the biggest losers have been Canada (-9 to 33rd), Serbia, Belarus, Spain (-6 to 29th), and France (-6 to 16th).
The countries that show the fastest declines in the complexity rankings in the decade ending in 2015 nearly all have had policy regimes that have been adversarial to the accumulation of productive know-how, with the largest declines in Cuba (-50), Venezuela (-44), Zimbabwe (-23), Tajikistan (-22), Libya (-22), and Argentina (-18). Globally, the fastest risers in complexity in 2015 have been the Philippines, Malawi (+26 to 94th), Uganda (+24 to 77th), Vietnam (+24 to 64th), and Cambodia (+16 to 88th).
Largest Wins and Losses
The growth projections highlight that economic growth fails to follow one easy pattern or rule system. The countries that are expected to be the fastest growing – India, Turkey, Indonesia, Uganda, and Bulgaria – are diverse in all political, institutional, geographic and demographic dimensions.
“What they share is a focus on expanding the capabilities of their workforce that leaves them well positioned to diversify into new products, and products of increasingly greater complexity,” said Timothy Cheston, a research fellow at CID.
The economic complexity growth projections differ from those of the IMF and the Economist Intelligence Unit (EIU).
Relative to EIU predictions, CID researchers are less optimistic about a set of countries that include Bangladesh, Cambodia, Iran, Sri Lanka, and Cuba. Conversely, CID researchers have greater optimism for the growth prospects of Uganda, Guatemala, Mexico, Tanzania, and Brazil.