Occasional Bulletin Economic Notes 2201 Revisiting Emerging Markets Economic Development and Convergence June 2022
Last Modified Date:
2022-06-24, 02:29 PM
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Long-term convergence of emerging countries towards advanced economies’ income/capita levels has never been generalized nor consistent, even though the share of countries that converged has risen since 2000. Broader adoption of stability-oriented macro policies and trade/capital account opening probably facilitated a greater degree of convergence, but it seemed to be neither a sufficient (nor in some cases necessary) condition. Failure by many countries to successfully reallocate resources towards sectors with higher productivity gains may explain why they failed to match the performance of dynamic Asian economies, or even
converge at all. The need to expand high value-added manufacturing and services sector appears strong in South Africa, which remains a commodity-dependent economy with a limited skills base and insufficient productivity growth.