This is a book review done by Antonio M. A. Pedro, Director, United Nations Economic Commission for Africa (ECA), Sub-regional Office for Eastern Africa (SRO-EA), It was Published online: 05 Sep 2014. (http://www.tandfonline.com/doi/abs/10.1080/.VCwQWpFbzfM)
Book reviewed- One Thing Leads to Another: Promoting Industrialisation by Making the Most of the Commodity Boom in Sub-Saharan Africa M. Morris, R. Kaplinsky & D. Kaplan 2012, pp. 227, Free download from http://tinyurl.com/CommoditiesBook or for less than $10 from an online bookshop, ISBN 978-2-4727-8188-9
As illustrated by the outcome statement of the 6th Joint Annual Meetings of the ECA Conference of African Ministers of Finance, Planning, and Economic Development and AU Conference of Ministers of Economy and Finance held on 25 and 26 March 2013 in Abidjan, Cote D'Ivoire (www.uneca.org/sites/default/files/document_- files/ministerial-statement_0.pdf), 'making the most of Africa's commodities' is a topical subject of interest for policy makers and other stakeholders on the continent, given the importance of the commodity sector for many African economies and the opportunities arising from the boom.
With their book, the authors offer a sober analysis, backed by good case studies, on what it takes to translate aspirational goals and visions into reality. This evidence-based, practical, and insightful template is important for a continent that does not suffer from the lack of good blueprints and visions, but has serious deficits in implementa- tion. The choice of countries is very judicious and confers robustness to the analysis and to the policy recommendations. As articulated by Richard Auty (www.commdev.org/files/1417_file_Marcoeconomic_Policy.pdf), mineral policy responses and designs should be conscious of where a country and its extractive industry are in the mineral development cycle. Accordingly, the authors were wise to include case studies from different sectors (from timber in Gabon to oil and gas in Nigeria and diamonds in Botswana) and from mineral jurisdictions at different levels of maturity and development in the minerals cycle. The Tanzania case study reveals how challenging it is to ensure policy coherence and institutional cohesiveness in a comparatively youthful mineral economy. The discussion on the relatively more mature Zambian mining industry exposes how difficult it is for governments to initiate and sustain a process of strategic visioning and policy development (p. 210) across political and electoral cycles. Yet, given the long gestation periods of mineral projects, this is a prerequisite for success in any resource-based industrialisation (RBI) agenda. The inclusion of South Africa, a mature mineral economy preoccupied with diversification and deepening its linkage programmes, indicates that, without sustained investments in human capital formation, challenges will abound and persist.
The discussions on the resource curse and the Dutch Disease, as well as on theoretical frameworks for RBI and linkages development in Chapters 1 and 2 of the book, are consistent with current knowledge of the subject and the view that natural resources are not intrinsically a curse for African countries. Instead, if well managed, this resource base can catapult the continent to greater prosperity, broad-based development, and structural transformation.
I fully support the notion that 'the Staples Trap is not inevitable and is subject to a number of influences, including the impact of government policies and the quality of institutions' (pp. 27-29). As has been stated in various publications, for mineral clusters and linkages to flourish it is important to align mineral policy with industrial and trade policy; improve inter-ministerial coordination to scale-up programme implementation; and promote regional integration with the view to facilitating factor flows, reducing transaction costs, realising economies of scale, accelerating the emergence of national and regional champions, and boosting the competi- tiveness of local firms (Pedro, 2006; UNECA, 2004c; UNECA, AUC, 2013). These key messages populate several sections of the book under review.
Chapters 4 and 5 provide a typology of challenges to linkages development. The emphasis on infrastructure and the procurement policies of transnational companies as potential hindrances to linkages development in develop- ing countries are well placed. In addition, and as demonstrated in the case of the Maputo Development Corridor, the authors emphasise that in order to overcome institutional barriers and promote wider development in the context of transnational resource corridors, it is important to have strong and independent corridor authorities with supranational jurisdiction, political will, and commitment (pp. 144-145).
Of particular relevance is the discussion on local content policies, a topic which is high on the policy agenda in Africa. The authors' views on local content were echoed in a World Bank Conference on 'Local content policies in the oil, gas and mining sector', held in Vienna, Austria, from 30 September to 1 October 2013 (www. worldbank.org/en/events/2013/10/01/local-content-policies-in-oil-gas-mining-sector). The conference participants noted that local content is context specific and needs to be clearly defined in legislation. Consistent with the authors, the conference participants observed that the implementation of local content policies requires a solid
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2 Book review
strategy based on a good understanding of business drivers, stakeholders expectations, regulatory requirements, and capacity development needs. Notwithstanding, the book would have benefitted from a more in-depth discussion on the implications of international trade regimes and bilateral investment treaties (BITs) on local content policies. BITs, in particular, can restrict the policy space available to developing countries to use local content with the view to promoting local lead firms (UNECA, 2011, pp. 115-127).
As illustrated by the case studies of Zambia and Tanzania (pp. 101-115), visions and policy frameworks alone are not sufficient to promote RBI and linkages development. As proposed by the authors, the formulation of visions must be translated into consistent, coherent, and well-designed policies. Good institutional analysis and sound understanding of behavioural economics and the political economy of the extractive sector would support policy delivery and help identify incentives for effective policy implementation and uptake.
Policy design must be complemented by relevant strategies, supporting laws and regulations, clear business plans, and legally-binding targets and milestones. Readers could have benefitted from a thorough review of the South African Black Economic Empowerment (BEE) and Mining Charter to distil relevant lessons and policy implications on how to frame and measure legally-binding targets. However, moving forward, it should be noted that RBI and linkages development cannot be imposed by decree. They must be anchored on sound economic and business fundamentals. It is important to support aspirational goals on RBI with good scoping studies to identify potential and priority sectors for focused and targeted interventions (p. 211).
Overall, the book is a powerful, timely, and contemporary contribution to the body of knowledge on RBI and linkages development. It is easy to read and offers a practical approach to design and implement effective local content policies. This is of crucial importance to mineral economies in developing countries aspiring to use their mineral endowments to promote broad-based and structural transformation of their economies and grappling with the challenge of moving from visions to action. The book will help policy makers, captains of industry, civil society organisations, organised labour, and academia alike.
