Uganda leads three other East African countries -Kenya, Tanzania and Rwanda in the top 10 fastest growing countries, though, according to projections, a significant fraction of that growth is due to rapid population growth.
On a per capita basis, the report presented by researchers at the Centre for International Development (CID) at Harvard University says Uganda, which follows India, is the only East African country that remains in the top 10 in the growth projections, though at 4.5 percent annually, its prospects are more modest.
The researchers attribute India’s rapid growth prospects to the fact that it is particularly well positioned to continue diversifying into new areas, given the capabilities accumulated to date. India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics.
“The major oil economies are experiencing the pitfalls of their reliance on one resource. India, Indonesia, and Vietnam have accumulated new capabilities that allow for more diverse and more complex production that predicts faster growth in the coming years,” said Ricardo Hausmann, director of CID, professor at the Harvard Kennedy School (HKS), and the lead researcher of The Atlas of Economic Complexity.
The growth projections are based on measures of each country’s economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities.
Growth in emerging markets is predicted to continue to outpace that of advanced economies, though not uniformly. The projections are optimistic about new growth hubs in East Africa and new segments of Southeast Asia, led by Indonesia and Vietnam.
“The economic pole of global growth has moved over the past few years from China to neighboring India, where it is likely to stay over the coming decade,” says the report
In examining the latest 2015 global trade data, CID researchers find a clear turn in trade winds, as 2015 marks the first year for which world exports have fallen since the 2009 global financial crisis.
This time around, the decline in trade was driven largely by the fall in oil prices. High oil prices had driven a decade of rapid growth in oil economies, outpacing expectations, says the report.
Since the decline in oil prices in mid-2014, growth in oil economies ground to a halt, where it is likely to stay, according to the projections, given little progress on diversification and complexity.
The projections warn of a continued slowdown in global growth over the coming decade.