Sunday, November 28, 2021

Botswana’s economic complexity ranked poor

Botswana, at position 94, is not listed among the top ten fast-growing economies in the world within the next decade, a recent study by the Harvard University has revealed.

According to the study, which forecasts the economic growth prospects of 128 countries and is titled the Atlas of Economic Complexity: Global Competitiveness Index indicates that “China (1), India (2) and Thailand (3) top the rankings for per capita growth potential followed by Belarus (4), Moldova (5), Zimbabwe (6), Ukraine (7), Bosnia and Herzegovina (8), Panama (9), and Mexico (10).

When it comes to economic complexity Botswana economic complexity has been ranked poor. The report states that Botswana is not very diversified; this indicates that something other than large volumes of knowledge is what makes diamonds rare. Botswana extracts raw diamonds in very few places, making their ubiquity quite low.

The research’s authors, who are drawn from the university’s Kennedy Centre for International Development, claim that they are 10 times more accurate in predicting economic growth over a decade than the World Economic Forum’s. ??The report states that Botswana’s current level of productive knowledge is unusually low for its level of income, which should allow it to catch up faster with other nations.

The main concept behind the ranking is a country’s productive knowledge ÔÇô the main growth driver of economies. The authors explain “the complexity of an economy is related to the multiplicity of useful knowledge embedded in it. For a complex society to exist, and to sustain itself, people who know about design, marketing, finance, technology, human resource management, operations and trade law must be able to interact and combine their knowledge to make products”.

These same products cannot be made in societies that are missing parts of this capability set. Economic complexity, therefore, is expressed in the composition of a country’s productive output and reflects the structures that emerge to hold and combine knowledge”.

The authors also found that the more complex economies had better institutions, more educated workers and more competitive environments.

“Seven Eastern European countries rank in the top 20 in terms of expected growth in income per capita while only two Latin American countries (Panama and Mexico) are in that group,” reads part of the research.

“Productive knowledge does a remarkable job at explaining why countries are rich or poor and why some catch up and others do not,” says Ricardo Haussmann, report co-author and director of CID.

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