Mostly good news for Africa's economy | Jonathan Glennie | Global development | The Guardian
There is no need or excuse for traditional partners to curtail or change their relationship with Africa, nor is there any reason to believe that emerging partners and traditional partners won't get along. Emerging partners do not lower governance standards, nor do they exacerbate corruption — not according to evidence in national-level surveys.
There is no evidence either that emerging partners are contributing to a African countries becoming newly indebted or de-industrialized. Some of these propositions made at the symposium were contested, for example that the share of African oil exports to Europe is declining in favour of Asia. That may become an issue in the long run. Other mineral resources used in manufacturing may be more needed by China than in Europe as European companies have moved production to China or source from Chinese or other emerging partners in traditional partner markets for example in agriculture and some manufactured products.
Furthermore, Chinese small and medium-sized businesses SMEs in Africa compete directly with African SMEs in the tradable and non-tradable sectors construction, for example.
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The emerging partner—traditional partner dichotomy may hide more than that it reveals. There may be complementarities but there is also competition. Within-group differences for example between China and Brazil or between Nordic donors and Japan are also considerable. Marcos Alexandre Silva, a Brazilian entrepreneur at the symposium, stressed that there are considerable differences between Brazilian and Chinese companies operating in Africa, notably in social and environmental responsibility.
Differentiation may be a more appropriate way of describing the situation. Just as there is differentiation among African countries, there is differentiation among emerging partners and among traditional partners.
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Moreover, neither of the two groups of partners is static. For example, China has provided emergency relief to Ethiopia.
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As far as public goods are concerned health, education and government , an assistance-driven approach continues to be useful. But an explicit investment-driven approach is useful for economic development. In both cases, a principled approach is what distinguishes traditional partners such as the Netherlands from other partners of Africa.
The cutflower industry in Ethiopia is a good example: Dutch FDI and international trade auctions are complemented by PSOM the programme for cooperation with emerging markets, sponsored by the Dutch Ministry of Economic Affairs, Agriculture and Innovation and by developing minimum production standards and capacity building at an Ethiopian university to create local technical skills and research capability.
As Michiel Hillen of the Netherlands African Business Council has argued, a new kind of public—private partnership is needed to entice Dutch firms to expand in Africa and make a difference. What are the implications for Busan? As I argued in an earlier comment, the Paris Agenda aid rules are under threat from other quarters as well, as traditional official development assistance will decline in relative importance.
Indeed, it is already giving way to other forms of funding such as philanthropy, aid for trade, climate change and corporate social responsibility.
Ethiopia is Africa's fastest-growing economy
But this growth and its limited impact in reducing poverty creates a vicious cycle, for higher poverty diminishes even further the effects of economic growth in reducing poverty, the report says. From to only three of the 14 African countries, where the annual gross domestic product growth rates were higher than the regional average of 5. In an interview with IPS, Rielaender said that the lack of correlation between growth and poverty reduction in African countries should force "African governments to concentrate their immediate efforts in creating jobs, invest in basic social services and promote gender equality".
The AEO points out that most of the African oil or mineral-exporting countries with high growth rates experienced "low growth elasticity of poverty" - that is, economic growth with little impact on reducing poverty. To tackle this lack of correlation between "growth and poverty reduction", the AEO also encouraged African governments to "take simultaneous actions on several fronts. Economic growth will improve human development only if it is inclusive and pro-poor. The AEO also recommends regional development policies that promote different economic sectors and reduce reliance on commodities such as cash crops and minerals.
Rielaender told IPS that, "industrial policy in the pharmaceutical sector could be one appropriate policy measure to create employment and simultaneously achieve social objectives in Africa", by locally produce generic medicines. International development agencies, such as the U. By so doing, African countries would benefit from present exemptions from international requirements on intellectual property, such as medicines patents which expire in Rielaender said that such a policy is feasible in selected African countries. So far, he believes, Africa has managed the regional impacts of the global economic crisis relatively well.
However, he warned that the political turmoil in the Maghreb region and inflation in food and fuel would again slow down the continent's growth to 3,7 percent this year. He argued that African recovery after the slowdown caused by the global economic crisis was primarily based on the shift that has taken place in global economic activities away from the OECD countries in Europe and North America and towards emerging economies in Asia and South America.
This shift is reflected in African international trade. In China surpassed the U. In general, the share of trade conducted by Africa with emerging partners has grown from approximately 23 to 39 percent in the last 10 years.
Africa's top five emerging trade partners are now China 38 percent , India 14 percent , Korea 7,2 percent , Brazil 7,1 percent and Turkey 6,5 percent. Another factor supporting the African economy is overall "good macroeconomic management" during the last decade, he added: "Inflation has remained relatively low, and high commodity prices have led to increased revenues in the continent.
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Global Policy Forum. By Julio Godoy InterPress Service June 20, The high economic growth enjoyed by many African states during the s have not led to poverty elimination. The World Economic Crisis.