Africa and Arab Gulf States: Divergent Development Paths and Prospects for Convergence

Abstract

In spite of the similarities between Sub-Saharan Africa and the Arab Gulf Cooperation Council states, development policies in these two regions of the world have produced markedly divergent outcomes. The remarkable increase in personal income and large current account surpluses in Arab Gulf states contrast with widespread poverty and balance of payments crises in Sub-Saharan Africa. This paper reviews the causes of these divergent development paths and discusses the prospects for economic convergence in the growing trade ties between the two regions. It shows that development models underpinned by institutional continuity and intergenerational accountability could enhance long-run growth in Sub-Saharan Africa and income convergence between the two regions.