resource-rich countries.<sup>13</sup> These countries have enjoyed a slightly higher per capita income over the last few decades. In particular, the latest estimates place their average GDP per capita at over US$1070 (in constant 2000 US$)—significantly above the average across the whole SSA region (about US$861). Moreover, these countries have a combined GDP of US$813 billion—representing about 90% of the whole SSA region’s GDP.

The higher income enjoyed by this sub-sample of resource-rich nations reflects the inclusion of a number of countries which have achieved the middle-income status either on account of their natural resource endowment or their relatively smaller population size or both. Some of these countries include the hydrocarbon-rich Equatorial Guinea, which emerged from the abject poverty status with the lowest per capita income as late as the 1990s, to become a middle-income country, following the discovery of oil. It now enjoys the highest average per capita income in the region (over US$8000) [World Bank (2008)]. The sample also includes Gabon and Botswana, which are hydrocarbons and mineral-rich, respectively. Likewise, countries in this second tier also enjoy a relatively high income, even by middle-income country standards.

However, in spite of the relatively higher per capita income of these countries, they pale in comparison to GCC countries. Long-term trend shows persistent large income gap between the two regions. While GCC income average exceeds US$17,000, the average across the SSA resource-rich sub-sample remains relatively low and consistently flat over the period (see Figure 1 in Annex).<sup>14</sup> Hence, in spite of the relative decline of GCC average income in the mid-1970s, following sharp economic downturn, income convergence did not occur [Sturm et al. (2008)]. And with the sustained increase of GCC average income, particularly driven by robust economic growth since the early 1990s, the income gap between the two regions has widened even further.

Nevertheless, income stagnation at the aggregate level and even decline in real terms needs not overlook cross-country variations within the region and across the sub-sample. Departing from models which have assumed low cross-country variance on the growth and development ladder, a number of studies have recently attempted to highlight growth success stories in SSA [Pattillo et al. (2006)]. In this line of research, Botswana is often mentioned as the African Success story; interestingly one which is credited to have successfully escaped the natural resource curse that is so pervasive across the whole Sub-Saharan African region [Acemoglu et al. (2002), Fofack (2009a)].

Indeed, notwithstanding its extremely high unemployment and poverty rates, Botswana currently has one of the highest per capita incomes in the region, reflecting its strong and sustained economic growth rates over the last three decades [Acemoglu et al. (2002), Hillbom (2008)].<sup>15</sup> Yet a comparison between Botswana and Oman—the least wealthy nation in the GCC region is not favorable to the former (see Figure 1). Even though Oman has a significantly much larger population size—over twice that of Botswana—the per capita income gap between the two countries is significant and has been growing steadily since the 1960s.

Over time this income gap has increased by more than fivefold, and Oman now enjoys income level that is over twice the average in Botswana. Of course, a comparison with other SSA resource-rich countries which have faced higher growth volatility and declining real per capita income would

> 13 This sample includes the following countries listed in alphabetical order: Angola, Botswana, Cameroon, Central African Republic, Chad, Congo Republic, Cote d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Gabon, Ghana, Guinea, Nigeria, Sierra Leone, South Africa, Tanzania, Uganda and Zambia.

> 14 Artadi and Sala-i-Martin (2003) document that the SSA average per capita GDP embraced a declining trend after the peak of 1974, and by the turn of the new millennium, it has fallen by over 11% from that peak.

> 15 In spite of its relatively high per capita income, Botswana is confronted with extremely high unemployment rates and poverty incidence, however.

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