On the Economics of Regional Powers: Comparing China, India, Brazil, and South Africa

As the conception of and debates on regional powers have been led by political science, this pa-per aims to contribute to the discussion from an economics perspective. Based on the discussion of different concepts of economic power—such as those of Schumpeter, Perroux, Predöhl, or Kindleberger—concepts of technological leadership, and the global value chain approaches, the paper develops a research framework for the economics of regional powers. This framework is then tested using descriptive statistics as well as regressions analysis, with a focus on the four regional powers Brazil, China, India, and South Africa. As economic power is relational, the re-lationship of regional powers to other nations in the region is analyzed. According to the findings, only limited statements on the economics of regional powers are possible: a regional power can be described as an economy with a relatively large population and land area which plays a dominant role in trade within the region and in the regional governance. The regional power develops its technological capacities, and its businesses act regionally and globally with increasing strength.Brazil, China, economic geography, economic leadership, economic power, growth, India, investment, public goods, regional powers, regression analysis, South Africa, technological change, value chain, trade.

Global Value Chains, Technology Transfer and Local Firm Upgrading in Non-OECD Countries

The productivity and competitiveness of local firms in non-OECD countries depends as much on technological capacities and successful upgrading as in industrialized countries. However, developing countries undertake very little to no original R&D and primarily depend on foreign technology. Long-term contracts and subcontracting arrangements within global value chains are here very important forms of transnational cooperation and therefore also important channels for technology transfer, especially as the majority of these countries attract only limited foreign direct investment. Drawing on innovation and growth models as much as on value-chain literature, we outline an analytical model for empirical research on local firm upgrading in non-OECD countries and technology transfer within global value chains.technology transfer, upgrading, innovation, non-OECD countries, global value chains

Economic Growth and Poverty: Does Formalisation of Informal Enterprises Matter?

The informal sector (IS) in developing countries plays significant roles viz., the provision of employment, incomes and supplying ignored markets. However, the working and employment conditions in the sector are still poor. Thus, its expansion and changing structures have drawn the attention of scholars and international policy makers on factors hindering its formalisation. Among the addressed factors include high costs of formalisation and lack of incentives to operate in the formal sector. To overcome these factors, various approaches have been adopted by different stakeholders. The paper assesses these approaches, factors related to informality-formality trade-off and the question of formalisation as a solution for firms’ growth. Looking at the problems faced by informal enterprises and the literature addressing options to accelerate the formalisation of informal enterprises, the paper briefly summarises the weaknesses of these approaches.informal sector; small enterprises; formal and informal institutions; informality; poverty; economic growth

Economic Growth and Poverty: Does Formalisation of Informal Enterprises Matter?

The informal sector (IS) plays a significant role in developing countries viz. the provision of employment, income and supplying ignored markets. However, working and employment conditions within the sector are still poor. Its expansion and changing structures have thus drawn the attention of scholars and international policy makers to the factors hindering its formalisation. Among the factors addressed are the high costs of formalisation and the lack of incentives for operating in the formal sector. A variety of approaches have been adopted by different stakeholders to overcome these factors. This paper assesses these approaches along with the factors related to informality-formality trade-off and the issue of formalisation as a solution for firms’ growth. By focussing on the problems faced by informal enterprises and the literature which addresses the options for accelerating the formalisation of informal enterprises, the paper will briefly summarise the weaknesses of these approaches.Informal sector, small enterprises, formal and informal institution, cost of formalisation, informality, formality, poverty, economic growth

Russia and Africa: the Invasion of Ukraine Leads to the Next Major Crisis

Everything that was true until recently is no longer valid. Russia’s war against Ukraine has consequences for the entire world. In particular, low-income countries and countries that need to import food and energy have been plunged into crisis. Food, oil and gas exporters, on the other hand, benefit. African countries are experiencing the negative effects even more than other regions of the world. Following the consequences of the pandemic and the climate crisis, Africa is once again being dragged into an externally induced crisis, with hunger and poverty continuing to rise

The decline of Europe and the US: shifts in the world economy and in global politics

The world is facing a dangerous power vacuum which may last for decades. This vacuum is developing because Europe and the US are currently in a phase of relative decline while China, India and Brazil are claiming international standing without being able to fill this role. A close look reveals several significant changes in global politics and the world economy: China, India and Brazil are becoming global actors and are gaining relative strength. Together with other regional powers (e.g. Turkey, South Africa, Indonesia), they are influencing global energy, climate, security, trade, currency, and development policies. At the same time, however, the aforementioned nations are too weak because they – despite strong economic growth – are unable to eradicate poverty in their own countries, and an extremely imbalanced distribution of income and wealth prevails, resulting in massive social problems. The weak infrastructure, technological underdevelopment, and low levels of education of the majority of the population are characteristic of their economic and social situations. Their ability to effectively lead on a global level is limited as they do not yet provide enough global public goods (security, monetary arrangements, development aid). Furthermore, they are often not recognised as leading powers in their own regions. Their alliances, such as IBSA (India, Brazil, South Africa), BRICS (Brazil, Russia, India, China, soon South Africa as full member) and BRICSAM (BRICS plus Mexico), show a low degree of institutionalisation and a large gap between rhetoric and reality. Additionally, the new regional powers disagree on many issues and thus do not constitute a counterpole to the West. There is a growing normative disconnect between the regional powers, Europe and the US

Economic relations between Africa and Europe: how can they contribute to overcoming inequality?

Over the past ten years, the EU and Africa have built a strong partnership, enshrined in the Joint Africa-EU Strategy (JAES). Today the European Union (EU) is collectively Africa‘s main foreign investor, its principle trading partner, a key security provider, and its most important partner in development and humanitarian assistance. At the end of November, 2017, African and European Heads of State will meet in Abidjan for the 5th Africa-EU Summit. This high-level event will discuss African-European partnership and start debating the renegotiation of the Cotonou Partnership Agreement (CPA), which remains a highly relevant framework