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New Africa builds new South-South economic ties

05-06-2011 15:22 BJT

CAPE TOWN, May 5 (Xinhua) -- Despite long-standing commercial ties with Europe, Africa now conducts half its trade with developing economic regions. Building new South-South relations would benefit the African continent as the economic momentum shifts from West to East.

"Now there's a clear shift taking place, not only a shift of global economic growth, production, more than that (there) is a rebalance," Anand Sharma, Indian minister of Commerce and Industry, said Thursday at the 21st World Economic Forum on Africa discussion session.

South-South trade and investment have been rapidly expanding in recent years, and the South-South share of world trade has jumped from about 7 percent in 1990 to 17 percent in 2009.

BRICS, an acronym for the grouping of Brazil, Russia, India, China and South Africa, which are commonly regarded as the most powerful emerging economies, held its third summit in China nearly a month ago. Trade relations between BRICS and the African continent are vital for the formation of new South-South relations and would also result in a new global balance.

Robert Lawrence, professor at Harvard Kennedy School, believed that after 2000, especially after the 2008 financial meltdown, the world changed dramatically. Emerging countries such as China and India have undergone internal and external changes, and have become much stronger through domestic reforms, putting them on the fast track toward rapid and steady growth.

"Africa now is part of global society; we are no longer the Dark Continent that had been forgotten. We have become the third fastest growing region in the world," said Maite Nkoana-Mashabane, minister of International Relations and Cooperation of South Africa, which was invited to join the BRIC group last December.

"The investment nowadays is very focused on Africa; all institutional main investors ask how to invest in Africa," said Colin Coleman, head and managing director of Goldman Sachs in South Africa.

How Africa seized the opportunities to be integrated into the global market and how its comparative advantages to strengthen and expand growth should be put to use are being discussed by the African leaders at the forum.

"These countries (emerging economies) are resource-hungry, while Africa has the potential to offer," Nkoana-Mashabane said.

"The rising labor cost in China and India will ultimately be beneficial to Africa. They must take advantage of that," Obiageli Katryn Ezekwesili, vice president of the World Bank for the Africa region, said.

She also urged the African countries to encourage economic diversity, including developing agriculture, the services sector, tourism and real estate.

In Lawrence's opinion, African countries should clearly know where the global economy is heading.

"We need to think about where the global economy is going, the South Africans and Africans should take those opportunities," he said. "Labor cost is rising in China. China has changed its growth strategy to depend more on consumption." As China will no longer play the role of supplier, the question crops up who will take over that role, he said.

"Resources and energy up to now are still the comparative advantage in Africa. China now is in sustainable growth, we need a comparatively stable resource supply of energy and resources. Africa has been one of the destinations," said Liu Guijin, African Affairs special representative of the Chinese government. He said that accusations against China for grabbing resources from Africa are groundless.

Nkoana-Mashabane and Sharma strongly agreed with Liu's comments.

Editor:Yang Jie |Source: Xinhua

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