33 - What Did The Economist Get Spectacularly Wrong?

Summary

In May 2000 the world’s leading financial weekly announced that there was little hope for the future of Africa. Under the headline ‘The hopeless continent’, The Economist’s cover showed a young man, presumably a rebel, carrying an anti-tank rocket launcher, over a cut-out of the region. The dark background spelled doom.

The Economist was not alone in its Afro-pessimism. In a seminal 1999 paper, development economists Paul Collier and Jan Willem Gunning attributed most of the malaise to Africa’s poor integration in the global economy, a result of import-substitution and exchange controls. They concluded that African countries were left with challenges that ‘are much more difficult to correct than exchange rate and trade policies, and so the policy reform effort needs to be intensified. However, even widespread policy reforms in this area might not be sufficient to induce a recovery in private investment, since recent economic reforms are never fully credible.’