Hinh T. Dinh

Celestin Monga

This book shows that feasible, low-cost, sharply focused policy initiatives aimed at enhancing private investment could launch Tanzania on a path to competitive light manufacturing.

A Reform Agenda for Job Creation and Prosperity

Light Manufacturing in Tanzania

Deepak Mishra

Based on a wide array of quantitative and qualitative techniques, Light Manufacturing in Vietnam identifies key constraints on manufacturing enterprises in Vietnam and evaluates differences in firm performance across China and Vietnam. The authors argue that, to continue on the high economic growth path of the past, Vietnam needs to address fundamental structural issues in the manufacturing sector that have been masked by this growth. Furthermore, addressing these issues would also help Vietnam move up the higher–value added chain and avoid the middle-income trap that other East Asian economies have experienced.

Creating Jobs and Prosperity in a Middle-Income Economy

Light Manufacturing in Vietnam

Vincent Palmade

Vandana Chandra

Frances Cossar

This book examines how light manufacturing can offer a viable solution for Sub-Saharan Africa's need for structural transformation and productive job creation, given its potential competitiveness based on low wage costs and an abundance of natural resources that supply raw materials needed for industries. Based on five different analytical tools and data sources, the book examines in detail the binding constraints in each of the subsectors relevant for Sub-Saharan Africa (SSA): apparel, leather goods, metal products, agribusiness, and wood products. Ethiopia is used as an example, with Vietnam as a comparator and China as a benchmark, and with insights from Tanzania and Zambia used to draw out lessons more broadly for SSA. The book recommends a program of focused policies to exploit Africa's latent comparative advantage in a particular group of light manufacturing industries - especially leather goods, garments, and agricultural processing. These industries hold the prospect of initiating rapid, substantial, and potentially self-propelling waves of rising output, employment, productivity, and exports that can push countries like Ethiopia on a path of structural change of the sort recently achieved in both China and Vietnam. The timing for these initiatives is very appropriate as China's comparative advantage in these areas is diminishing due to steep cost increases associated with rising wages and non-wage labor costs, escalating land prices, and mounting regulatory costs. Five features of this book distinguish it from previous studies. First, the detailed work on light manufacturing at the subsector and product levels in five countries provide in-depth cost comparisons between Asia and Africa that can be used as a framework for future studies. Second, the book uses a wide array of quantitative and qualitative techniques to identify key constraints to enterprises and to evaluate firm performance differences across countries. Third, the findings that firm constraints vary by country, sector, and firm size led to a focused approach to identifying constraints and combining market-based measures and select government intervention to remove them. Fourth, the solution to light manufacturing problems cuts across many sectors: solving the manufacturing inputs problem requires solving specific issues in agriculture, education, and infrastructure. African countries cannot afford to wait until all the problems across sectors are resolved. Fifth, the book draws on experiences and solutions from other developing countries to inform its recommendations. This book will be very valuable to African policy makers, professional economists, and anyone interested in the economic development, industrialization, and structural transformation of developing countries.

Targeted Policies to Enhance Private Investment and Create Jobs

Light Manufacturing in Africa

Bernard Myers

Abebe Adugna

Abstract: Facing runaway inflation and budget discipline problems in the early 1990s, the Zambian government introduced the so-called cash budget in which government domestic spending is limited to domestic revenue, leaving no room for excess spending. Dinh, Adugna, and Myers review Zambia's experience during the past decade, focusing on the impact of the cash budget on poverty reduction. They conclude that after some initial success in reducing hyperinflation, the cash budget has largely failed to keep inflation at low levels, created a false sense of fiscal security, and distracted policymakers from addressing the fundamental issue of fiscal discipline. More important, it has had a deeply pernicious effect on the quality of service delivery to the poor. Features inherent to the cash budgeting system facilitated a substantial redirection of resources away from the intended targets, such as agencies and ministries that provide social and economic services. The cash budget also eliminated the predictability of cash releases, making effective planning by line ministries difficult. Going forward, Zambia must adopt measures that over time will restore the commitment to budget discipline and shelter budget execution decisions from the pressures of purely short-term exigencies. This paper"a product of the Poverty Reduction and Economic Management Division 1, Africa Region"is part of a larger effort in the region to review public expenditure management.

A Case Study of the Conflict Between Well-intentioned Macroeconomic Policy and Service Delivery to the Poor

The Impact of Cash Budgets on Poverty Reduction in Zambia

George R. G. Clarke

This book presents empirical analyses of manufacturing firm performance in Africa based on the World Bank Enterprise Survey and on a one-time quantitative survey conducted for the World Bank by the Center for the Study of African Economies of Oxford University.

Hinh T. Dinh

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