Measuring Competitiveness and its Sources: The case of Mali's Manufacturing Sector

Abstract

Competitiveness is a hot debate between policy-makers and businessmen in the world, which has been subject to little rigorous economic analysis. We present a method that draws on economic theory to measure its sources at the firm and industry levels, using the case of Mali. In Mali, manufactures are competitive only on their local market where protection offsets a fundamental lack of comparative advantage. Regional integration and trade liberalization thus constitue major challenges and only the textile sector appears to be in a position to exploit the resulting export opportunities. However, the situation is not hopeless for the other industries, and areas for improvement in firm performance and policy reform are pointed out. Given Mali's low wages, its manufacturing potential lies in labour-intensive industries rather than in the capital- and material input-intensive activities that have predominated in the past.

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