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Discovering East Africa's Industrial Opportunities

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  • Cesar A. Hidalgo

Abstract

What are East Africa's industrial opportunities? In this article we explore this question by using the Product Space to study the productive structure of five south-east African countries: Kenya, Mozambique, Rwanda, Tanzania and Zambia. The Product Space is a network connecting products that tend to be exported by the same sets of countries. Since countries are more likely to develop products that are close by in the Product Space to the ones that they already produce, the Product Space can be used to help anticipate a country's industrial opportunities. Our results suggest that the most natural avenue for future product diversification for these five south-east African nations resides in the agricultural sector, since all of these nations appear to have productive structures that are pre-adapted to the production of many agricultural products that none of them are currently exporting. We conclude this paper by exploring the potential benefits of further regional economic integration by doing an exercise in which we pull together the productive structures of these five countries. This exercise shows that the products that become more accessible in the combined economy are once again predominantly agricultural. These results suggest that while diversification into all sectors should remain an important long-term goal of the region, the path towards increased diversification in the near future may well lie in a more empowered and diverse agricultural sector.

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  • Cesar A. Hidalgo, 2012. "Discovering East Africa's Industrial Opportunities," Papers 1203.0163, arXiv.org.
  • Handle: RePEc:arx:papers:1203.0163
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    References listed on IDEAS

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    1. Frank Neffke & Martin Henning & Ron Boschma, 2011. "How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions," Economic Geography, Clark University, vol. 87(3), pages 237-265, July.
    2. Hausmann, Ricardo & Klinger, Bailey & Lawrence, Robert Z., 2008. "Examining Beneficiation," Working Paper Series rwp08-030, Harvard University, John F. Kennedy School of Government.
    3. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    4. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    5. Ricardo Hausmann & Bailey Klinger, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," CID Working Papers 128, Center for International Development at Harvard University.
    6. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    7. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    8. Philippe Aghion & Peter Howitt, 2009. "The Economics of Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 9780262012638, January.
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    Cited by:

    1. Nouf Alsharif & Sambit Bhattacharyya & Maurizio Intartaglia, 2016. "Economic Diversification in Resource Rich Countries: Uncovering the State of Knowledge," Working Paper Series 9816, Department of Economics, University of Sussex.
    2. Nicola Daniele Coniglio & Raffaele Lagravinese & Davide Vurchio & Massimo Armenise, 2017. "The pattern of structural change: testing the Product Space framework," SERIES 01-2017, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Mar 2017.
    3. Ferraz, Diogo & Moralles, Herick Fernando & Campoli, Jéssica & do Nascimento Rebelatto, Daisy Aparecida, 2017. "Economic Complexity and Quality of Life in Latin America and Asia between 2010 and 2014," EconStor Conference Papers 171459, ZBW - German National Library of Economics.
    4. Nouf Alsharif & Sambit Bhattacharyya & Maurizio Intartaglia, 2016. "Economic Diversification in Resource Rich Countries: Uncovering the State of Knowledge," Working Paper Series 09816, Department of Economics, University of Sussex.

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