Growth and Sustainability in Brazil, China, India, Indonesia and South Africa

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Edited By:Luiz R. de Mello
16 Aug 2010
9789264090200 (PDF) ;9789264090194(print)

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Growth and Sustainability in Brazil, China, India, Indonesia and South Africa is based on the proceedings of a conference, organised by the OECD, on the growth performance of these large emerging-market economies. The book brings together contributions from distinguished policy makers and scholars. It discusses the growth experiences of these countries, including how they have fared in the wake of the recent global financial crisis. It also examines these countries’ prospects for sustaining strong growth over the long term.

The chapters in this book offer new analyses of the growth process in individual countries. They explore, for example, the reduction of external vulnerability in Brazil, the contribution of human and physical capital accumulation in China and Indonesia, initiatives to promote infrastructure and social development in India, and financial deepening in South Africa. These chapters identify the specific drivers of growth in each country, and thus strengthen our understanding of the policy levers that can be used to sustain growth in the years to come. 

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  • Contributors
  • Foreword
    Sustained growth in Brazil, China, India, Indonesia and South Africa will be critical for the global economy in the coming decades. This volume, based on the proceedings of a conference organised by the Economics Department of the OECD on 24 September 2009, analyses growth performance in these five emerging-market economies and the prospects for sustaining strong growth over the longer term.
  • Executive summary
    This volume focuses on different aspects of the growth process in five major emerging-market economies: Brazil, China, India, Indonesia and South Africa. There are some commonalities in these countries’ growth trajectories, including a gradual strengthening of trade and financial linkages with the OECD countries and considerable resilience to the global recession, as well as differences, reflecting economic structure and social preferences.
  • A brief history of Brazil's growth
    This chapter focuses on the Brazilian growth experience and begins with a brief overview of events that marked the country’s development from its discovery in 1500 to the 19th century. The chapter then divides the years between 1900 and 2008 into four periods, based on the methodology developed by Bai and Perron (1998, 2003) to identify structural breaks in statistical series. We identify regime changes in 1918, 1967 and 1980. Growth accounting is subsequently used to analyse the behaviour of productivity in the post-World War II period and suggests that high inflation might have been a reason for a decline in productivity between 1980 and the mid-1990s.
  • China towards 2020
    The chapter identifies the main drivers of China’s growth over the last 30 years based on a comprehensive econometric growth accounting exercise. The challenges for sustaining high growth in the future are discussed. Although China’s growth has been predominantly input-driven, productivity gains contributed to more than 40% of output growth in the past.
  • Shaping the Indian miracle
    This chapter discusses India’s long-term growth prospects. Following structural breaks in GDP growth in 1979-80 and 2003-04, the Indian economy has been on an accelerated growth path. The chapter examines the main drivers of strong growth, the components of aggregate demand, the sectoral composition of growth and its spatial distribution across the country’s different regions. The chapter then reviews India’s economic policy management in the wake of the global economic slowdown, which also impacted the Indian economy.
  • Indonesia beyond the recovery
    Indonesia has been affected less severely by the global crisis than neighbouring countries. Although Indonesian exports have been hit hard by the collapse of commodity prices and falling demand for manufacturing products, GDP growth has remained surprisingly buoyant.
  • Sustainable growth in South Africa
    This chapter reviews the literature on the drivers of growth in South Africa. While growth has picked up since the mid-1990s, there are a number of impediments to faster, sustainable growth. These include a continued impact of uncertainty on physical capital investment, uncertainty surrounding property rights, incomplete recovery of infrastructure investment, market distortions that thwart competition in product markets and an excessively rigid labour code. In addition, skills creation, credit and R&D activity remain too low, while credit rationing in financial markets stills appears to be a feature of the economy. The fiscal space for more aggressive growth-promoting public expenditure has been reduced by the expansion of welfare payments. A number of policy implications follow from the analysis, including a need for macroeconomic stability and for credible, transparent policies to address economic and social infrastructure bottlenecks, to maintain fiscal discipline in the face of pressures for further expansion in welfare payments, and to reform product and labour market regulations. Finally, action is also needed to improve the quality of education, create incentives for R&D activity, and improve the efficiency of the financial sector.
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