The literature predicts shifts of output and labor first from agriculture to manufacturing, followed by manufacturing to services at later stages of development. This pattern is consistent with the experience of advanced economies that have experienced secular declines in manufacturing employment and sectoral value added since the 1970s. It is also consistent with the experience of East Asian economies whose striking growth performance in recent years has been underpinned by dynamism in manufacturing. However, the recent relatively high-growth episodes in many African economies has been accompanied by a declining share of agriculture and rise in services share, while the manufacturing sector’s share of output has not only remained low but also declining. What are African countries missing? Why this non-conformance with predicted trajectory and trend?
Dear John,you are right.Same is true for India also.However the paper attached is valuable to explain it.i hope it helps.
Easy money through fake industries sometimes causes shift in the national values, and respect.
Thanks a lot, Kulvir and Mohamed with your responses. Kulvir, the attached paper is great in responding to the falling share of agriculture. A million thanks.
Dear @Singh, you paper is important, but it does not explain all truth. Indeed, the share of agriculture declines in OECD countries, because with income growth people spend less fraction of income on food. But in African, Asian and Latin American countries people are not as rich, and food is often more than a half of consumption. The 1st question: how much of food price goes to farmer? What is the fraction of intermediary (retailer)? Do food processors have more market power and work with substantial mark up, so that lower fraction of food price goes to farmers and agriculture?
This is not normal. Agriculture has essential value for all of us. We cannot survive without food, but can without services. Even we did not have manufacturing 200-300 years ago. Perhaps the problem (at least one of) is in the wrong relative valuation of different commodities. You can look at the book of Brian Czech "Supply Shock": https://www.goodreads.com/book/show/16057534-supply-shock . He argues that correct valuation of natural resources should be much higher.
Dear Yuri, this is a very interesting and very important insight. Thank you so much.
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