IMF says digital key to economic growth
International Monetary Fund (IMF) says developing economies, including Malawi, can turn their economic misfortunes by investing as well as reforming their digital and technological sectors.
Two IMF economists— Reda Cherif and Fuad Hasanov—said in their policy paper The Return of the Policy That Shall Not Be Named posted on IMF website www.imf.org that low-income countries can transition from low-income to middle or high-income status by promoting technology-oriented industries.
The two argue that the success of the “Asian miracles”—Hong Kong, South Korea and Singapore—and Japan, United States and Germany before them show that with the right policy framework in tech-oriented industries, countries can promote rapid economic growth.
Reads part of the paper: “We contend that standard growth policy prescriptions are not sufficient. We find strong commonalities in policies pursued by the Asian Miracles and one cannot ignore the preeminent role of industrial policy in their development.”
But they caution that low income countries such as Malawi will face a tougher challenge to develop their technological industries, particularly if they fail to formulate a right policy mix to industrialise.
The Malawi Government has outlined a number of policy reforms in the Malawi Growth and Development Strategy (MGDS III) to include digital innovation to promote economic growth and inclusion in the country.
In view of this, government in collaboration with the Public Private Partnership Commission (PPPC) is seeking investors to finance projects in the digital sector through the Digital Malawi Project.
PPPC director of finance and risk analysis Audrey Mwala said in an earlier statement that informations and communications technology (ICT) can enhance inclusive growth.
She said a combination of widespread access to broadband and a robust ICT service ecosystem can offer a powerful platform for reducing poverty, improving human development and increasing government transparency and efficiency.
Reads part of the statement: “ICT has the potential to transform business and government, driving entrepreneurship, innovation and economic growth and breaking down the distance of and cost in delivery services.”
ICT sector plays an important role by, among others, contributing to rapid technological progress and productivity.
