Asia in Africa: The Future of Asia in Africa: The Future of Economic DevelopmentEconomic Development

http://news.bbc.co.uk/2/hi/programmes/http://news.bbc.co.uk/2/hi/programmes/newsnight/7355369.stmnewsnight/7355369.stm

Economic Growth in AfricaEconomic Growth in Africa

2007-2008 approximately 7%2007-2008 approximately 7%

Level UN estimates needed to reduce Level UN estimates needed to reduce povertypoverty

Proportion of people in absolute poverty Proportion of people in absolute poverty

1990 - 58%1990 - 58%

2007 – 50%2007 – 50%

Seven of the top ten fastest growing in Seven of the top ten fastest growing in 2009? 2009?

China in AfricaChina in Africa

Chinese trade with Africa grew 45.1% in Chinese trade with Africa grew 45.1% in 20082008US $107bn US $107bn ResourcesResourcesMarketsMarketsTied aidTied aid““No strings attached”No strings attached”““All weather friend”All weather friend”

China’s InterestChina’s Interest

Energy-intensive growthEnergy-intensive growth

US Navy “choke space”US Navy “choke space”

““Locking up barrels at source”Locking up barrels at source”

World’s largest consumer of copperWorld’s largest consumer of copper

One third of global steel output, One third of global steel output,

40% of cement and 40% of cement and

26% of the world’s copper26% of the world’s copper

China’s trade with developing countries grew China’s trade with developing countries grew 88% faster than its trade with developed ones 88% faster than its trade with developed ones from 1999 to 2003from 1999 to 2003

Manufactured goods for the developed worldManufactured goods for the developed world

““Triangulation effect” Triangulation effect”

Food supplies – farms in ZambiaFood supplies – farms in Zambia

Daewoo Logistics 99-year lease on 3.2 million Daewoo Logistics 99-year lease on 3.2 million acres of land, half the size of Belgium, to grow acres of land, half the size of Belgium, to grow maize and biofuels maize and biofuels

““The South African’s brag that if you driver a The South African’s brag that if you driver a Hummer, you’re driving a car made in Africa. Hummer, you’re driving a car made in Africa. Ditto if you drive a BMW with the steering wheel Ditto if you drive a BMW with the steering wheel on the right-hand side. The next time you fly on on the right-hand side. The next time you fly on a Boeing aircraft , look out the window and you’ll a Boeing aircraft , look out the window and you’ll see engines with parts made in South Africa. But see engines with parts made in South Africa. But that country isn’t alone. I’ve seen factories in that country isn’t alone. I’ve seen factories in Lesotho that produce Gap and Old Navy Lesotho that produce Gap and Old Navy clothing, car parts manufactured in Botswana clothing, car parts manufactured in Botswana and call centres in Kenya and Uganda” – Carol and call centres in Kenya and Uganda” – Carol PineauPineau

Drivers of GrowthDrivers of Growth

““Big 5” – Angola, DRC, Kenya, Nigeria and Big 5” – Angola, DRC, Kenya, Nigeria and South Africa South Africa

NEKS (Nigeria, Egypt, Kenya, South NEKS (Nigeria, Egypt, Kenya, South Africa) Africa)

African ResourcesAfrican Resources

3/4s of Africa’s exports3/4s of Africa’s exports42% of the world’s bauxite; 42% of the world’s bauxite; 38% of its uranium; 38% of its uranium; 42% of gold; 42% of gold; 73% of its platinum; 73% of its platinum; 88% of diamonds 88% of diamonds 10% of oil10% of oilSupplies 19% of US oil Supplies 19% of US oil 31% of China’s31% of China’sChina “locked out” of Middle East? China “locked out” of Middle East?

IssuesIssues

Price volatilityPrice volatilityWhere are resource rents going?Where are resource rents going?Lack of transparencyLack of transparencyUse of Chinese labourUse of Chinese labour70% of loans in Angola for Chinese 70% of loans in Angola for Chinese companiescompanies““Textile tsunami”Textile tsunami”SustainabilitySustainability

PossibilitiesPossibilities

Untied debt reliefUntied debt relief

Technical assistanceTechnical assistance

Tax incentives for Chinese investorsTax incentives for Chinese investors

““Network trade” – pharmaceuticals etcNetwork trade” – pharmaceuticals etc

Special economic zonesSpecial economic zones