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The Macro Management of Commodity Booms: Africa and Latin America's Response to Asian Demand

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  • Rolando Avendaño
  • Helmut Reisen
  • Javier Santiso

Abstract

Strong growth in China and India has led to improvements in raw-material exporting countries' terms of trade and attracted complementary finance. The long-term challenge for these countries, where institutions are often fragile, is to avoid the so-called “resource curse”. This paper aims to provide a comparative perspective between policy choices in commodity-exporting countries, contrasting the experiences of Africa and Latin America. First, it highlights global macroeconomic links between the Asian Drivers (China and India) and these regions. Second, it discusses optimal policy responses from a macroeconomic and institutional perspective. Third, it presents empirical evidence on macroeconomic, particularly fiscal responses to Dutch disease and the specialisation effects caused by Asian Drivers' demand and assesses the benefits and challenges offered by the Asian Drivers from a macro perspective for both Africa and Latin America. La forte croissance enregistrée par la Chine et l'Inde a permis aux pays exportateurs de matières premières d'améliorer substantiellement leurs termes de l'échange et d'enregistrer des afflux de capitaux conséquents. A long terme, le défi pour ces pays, aux institutions souvent fragiles, sera d'éviter de tomber dans la trappe de la malédiction des matières premières. Le travail ici présenté se propose d'analyser de manière comparée les réponses en matière de politiques économiques de la part des pays qui bénéficient de cette nouvelle manne, en contrastant en particulier les expériences africaines et latino-américaines. On souligne en premier lieu les liens macro-économiques entre les locomotives asiatiques (Chine et Inde) et ces deux régions. Ensuite, on discute les réponses économiques optimales face à ce choc de demande positif. Enfin, on présente les résultats empiriques et, en particulier, les réponses macroéconomiques en matière budgétaire et commerciale des pays bénéficiaires puis on évalue les bénéfices et les défis aussi bien pour l'Afrique que pour l'Amérique latine.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 270.

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Date of creation: Aug 2008
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Handle: RePEc:oec:devaaa:270-en

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Keywords: Latin America; dutch disease; Africa; Asian drivers; commodity booms; Afrique; boom des matières premières; locomotives asiatiques; maladie hollandaise; Amérique latine;

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Cited by:
  1. Javier Santiso, 2009. "Sovereign Development Funds : Key Financial Actors of the Shifting Wealth of Nations," Revue d'Économie Financière, Programme National Persée, vol. 9(1), pages 291-315.
  2. Christian Daude & Ángel Melguizo & Alejandro Neut, 2010. "Fiscal Policy in Latin America: Countercyclical and Sustainable at Last?," OECD Development Centre Working Papers 291, OECD Publishing.
  3. Ercio Muñoz S., 2013. "Precio de Materias Primas y Spread Soberano en Economías Emergentes ¿Importa la Concentración de las Exportaciones?," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 16(1), pages 100-121, April.
  4. Daude, Christian & Melguizo, Ángel & Neut, Alejandro, 2011. "Fiscal policy in Latin America: Countercyclical and sustainable?," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 5(14), pages 1-29.
  5. Daude, Christian & Melguizo, Ángel & Neut, Alejandro, 2010. "Fiscal policy in Latin America: better after all?," Economics Discussion Papers 2010-24, Kiel Institute for the World Economy.
  6. Javier Santiso, 2009. "Les fonds souverains : des acteurs clés dans la nouvelle géographie des richesses," Revue d'Économie Financière, Programme National Persée, vol. 9(1), pages 315-342.

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