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The Export-Oriented Garment Industry in Madagascar: Implications of Foreign Direct Investment for the Local Economy

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Delivering Sustainable Growth in Africa

Part of the book series: IDE-JETRO Series ((IDE))

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Abstract

The development of the manufacturing sector has been a central issue of economic policy in developing countries. While many developing countries, including low-income countries, have experienced manufacturing growth, the degree of growth differs by country and significant growth has not occurred yet in sub-Saharan Africa, except for a few countries. Consequently, the share of primary commodities in exports is persistently high in Africa. In the 1960s and 1970s the well-known Singer-Prebish thesis argued that heavy reliance on commodity products hampers economic growth through deterioration of terms of trade. After decades of the Structural Adjustment Programme (SAP), diversification of industrial structure has been revived as an important development strategy in low-income countries (Collier, 2007; Commission of Growth and Development, 2008), triggered by empirical studies showing the adverse effect of reliance on natural resources, known as the ‘resource curse’ (Sachs and Warner, 1995; Auty and Gelb, 2001). It is also argued that lack of diversity in the industrial structure, particularly the stagnation of labour-intensive manufacturing industry, is a crucial cause of persistent poverty and the increasing income gap in Africa (Nissanke and Thorbecke, 2010).

Takahiro Fukunishi acknowledges financial support from JSPS KAKENHI (Grant-in-Aid for Scientific Research C., 21530289).

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Authors
  1. Takahiro Fukunishi
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  2. Herinjatovo Aimé Ramiarison
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Editor information

Editors and Affiliations

  1. Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO), Japan

    Takahiro Fukunishi (associate senior research fellow) (associate senior research fellow)

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© 2014 Takahiro Fukunishi and Herinjatovo Aimé Ramiarison

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Fukunishi, T., Ramiarison, H.A. (2014). The Export-Oriented Garment Industry in Madagascar: Implications of Foreign Direct Investment for the Local Economy. In: Fukunishi, T. (eds) Delivering Sustainable Growth in Africa. IDE-JETRO Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137377821_5

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