Africa and Global Commodity Markets, The Rise of China and India: What’s in it for Africa? - eBook by OECD

Africa and Global Commodity Markets, The Rise of China and India: What’s in it for Africa? by OECD - IdeaIndia.Com

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China and India’s commodity demands and their prices and the terms of trade. With China and India surging ahead as world economic powers, Africa’s economy stands to be impacted in various ways. Eco­nomic interactions between the Asian giants and Africa show promise of intensifying over time. This eBook by the OECD analyses possible future scenarios.

Policy interactions appear to be relevant in the areas of raw material price levels and volatility, exchange rate developments and resource allocation (de-­industrialisation, vertical integration), low-wage competition and income dis­tribution, industrialisation strategies, input linkages (in China and India), capital-flow effects (such as through FDI, project finance, public-private joint ventures). Last but not the least, they are relevant in the context of under­standing rent-seeking behaviour and the frictions arising from the unequal distribution of income among ethnic groups.

African economies are affected differentially by Asian economic growth. Complementary effects are possible in certain cases, as producers benefit from increased Asian demand. Asian countries may want to secure more raw material, may want to improve export infrastructure in selected African countries, while offering project finance, FDI and other forms of trade-linked capital flows. In other cases where Asian economies indirectly divert investment resources away from African economies, interests may be competitive rather than comple­mentary. While on balance the short-term opportunities of Asia’s ascendancy and the concomitant effects on South-South trade may outweigh the economic costs for Africa (in particular for its raw material and energy exporting economies), serious long-term risks may be involved.

SJP (@DigitalAsian)


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