Jeffrey Sachs: belief

Transcript context

…If I said this: the core problem in Mexico is there’s too much labor in the informal sector. Productivity in the formal sector is often remarkably high. Mexico will become number three for auto exports. They’re going to pass South Korea. But you can only squeeze so much more in productivity gains out of the formal sector, and moving from the informal sector to the formal sector for labor is a slow process. It goes on slowly. That’s what we see. To accelerate that, Mexico needs in some ways to deregulate. Would you agree or disagree? I don’t know. Mexico is a little bit, I would say, just stepping back, a little bit of a mystery for me, why it hasn’t done better in development. Let’s talk about Africa. Now you must know Dani Rodrik’s work. He and I, maybe you too, he’s worried about premature deindustrialization. That in the old days, countries like the US would have over a quarter of their labor force working in manufacturing with middle-class jobs, often be democratic, and then they would deindustrialize. The new wave of emerging economies, we’re often seeing them deindustrialize at 10 to 15 percent of the workforce being in manufacturing. It may be that service-sector jobs for cultural, economic reasons, some reasons, don’t give you the same kind of enduring, increasing returns, ongoing, self-reinforcing economic growth. So when it comes to Africa or other parts of the world, are you worried about premature deindustrialization?…

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