The Macro Management of Commodity Booms: Africa and Latin America's Response to Asian Demand

40 Pages Posted: 10 Nov 2008 Last revised: 12 Dec 2014

See all articles by Rolando Avendano

Rolando Avendano

Asian Development Bank

Helmut Reisen

Organization for Economic Co-Operation and Development (OECD) - Development Centre (DEV); WWZ University Basel

Javier Santiso

ESADE Business School

Date Written: August 2008

Abstract

Strong growth in China and India has led to improvements in raw-material exporting countries' terms of trade and attracted complementary finance. The long-term challenge for these countries, where institutions are often fragile, is to avoid the so-called "resource curse". This paper aims to provide a comparative perspective between policy choices in commodity exporting countries, contrasting the experiences of Africa and Latin America. First, it highlights global macroeconomic links between the Asian Drivers (China and India) and these regions. Second, it discusses optimal policy responses from a macroeconomic and institutional perspective. Third, it presents empirical evidence on macroeconomic, particularly fiscal responses to Dutch disease and the specialization effects caused by Asian Drivers' demand and assesses the benefits and challenges offered by the Asian Drivers from a macro perspective for both Africa and Latin America.

Keywords: Commodity booms, Asian Drivers, Africa, Latin America, Dutch disease

JEL Classification: F00, O11, 057, E62

Suggested Citation

Avendano, Rolando and Reisen, Helmut and Santiso, Javier, The Macro Management of Commodity Booms: Africa and Latin America's Response to Asian Demand (August 2008). OECD Working Paper No. 270, Available at SSRN: https://ssrn.com/abstract=1298926 or http://dx.doi.org/10.2139/ssrn.1298926

Rolando Avendano (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Helmut Reisen

Organization for Economic Co-Operation and Development (OECD) - Development Centre (DEV) ( email )

94, rue Chardon Lagache
Paris, 75775
France
(33-1) 45 24 82 82 (Phone)
(33-1) 45 24 79 43 (Fax)

WWZ University Basel ( email )

Petersgraben 51
Basel, CH-4003
Switzerland

HOME PAGE: http://www.unibas.ch

Javier Santiso

ESADE Business School ( email )

Mateo Inurria 27
Madrid, 28036
Spain

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