Escaping the Low-Growth Trap : Guinea-Bissau Country Economic Memorandum
Guinea-Bissau’s massive economic potential has not so far translated into better livelihoods for its population. Growth per capita has averaged less than 1 percent per year over 2000-2019. This chapter provides an in-depth analysis of the factors b...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/473261604385132681/Guinea-Bissau-Country-Economic-Memorandum-Escaping-the-Low-Growth-Trap http://hdl.handle.net/10986/34752 |
| Summary: | Guinea-Bissau’s massive economic
potential has not so far translated into better livelihoods
for its population. Growth per capita has averaged less than
1 percent per year over 2000-2019. This chapter provides an
in-depth analysis of the factors behind the economic
stagnation. An interplay of three constraints have impeded
sustained high growth. First, the low and volatile growth
performance is linked to fragility and political
instability, which, together with a poorly diversified
economy, with raw cashew nuts accounting for 95-98 percent
of export earnings, help explain the stop-go growth cycle.
Second, human capital accumulation remains low. An acute
shortage of a skilled workforce is a major constraint to
inclusive growth. The education system is marked by
alarmingly low levels of learning. Third, private investment
is particularly low—the second lowest in Africa. Years of
underinvestment in infrastructure, energy, and human capital
are holding the country back from achieving strong, enduring
and inclusive growth. The chapter concludes by highlighting
how the COVID-19 crisis exacerbates these constraints and
discusses areas that could support sustainable growth. The
chapter is organized as follows: section 1.1 presents a
brief overview of the political and social context. Section
1.2 puts recent growth into historical and comparative
perspective. Section 1.3 presents analysis that helps
explain the low-growth trap and identifies possible areas
that Guinea-Bissau could pursue to escape this trap.
Finally, Section 1.4 discusses the economic impact of
COVID-19 and potential pathways to recovery. |
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