Thursday, May 29, 2014

Africa Rising

I found this article to be interesting as it touches on some frequently discussed topics in our class: the role of debt in growth and its detriments, the IMF, and economic interplay between more developed and the so-called "developing" countries:

http://www.ft.com/intl/cms/s/0/6ae943e0-e751-11e3-8b4e-00144feabdc0.html?siteedition=intl#axzz339GK0oGk

Any thoughts?

5 comments:

  1. I think this is interesting, especially because just a few days ago the FT also wrote an article about how the US is gearing up to invest more in Africa. According to their statistics, China is the largest trading partner with the continent, so I think the US is going to try and compete with them. I worry though that a new form of exploitation may begin to take rise as once again the rich nations of the world plunder a developing continent. It may not be in the form of outright colonization anymore, but many of the 'strategic trade agreements' we tout in our country have less than favorable terms for the other country.

    http://www.ft.com/intl/cms/s/0/69924938-e65c-11e3-bbf5-00144feabdc0.html#axzz339tDDBtR

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  2. This reminds of the video we watched in the class about global income inequality. A large amount of money moves from developing countries to the developed world and developing country only get a tiny portion from developed countries. With rise of countries like India and China, global inequality is decreasing, however if foreign investors exploit the opportunities in Africa, then the income gap between the two worlds will become even higher.

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  3. I think unless you subscribe to the FT, you will not be able to read the link. I think foreign investment is a huge deal and as Justina mention in class, the kind of foreign investment matters. If such investment help build infrastructure in the country, it helps retain more profits/benefits within the local economy of a developing country.

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  4. I couldn't read the article, but picking up from Nicks summary and the other comments i really doubt it that America's investment will really benefit African nations. The US has been investing in some African countries without having much Change because most of the investment is usually tied to something else. Also, the US only chooses to invest in countries that have resources they need in exchange. China on the other hand is investing genuinely, for the most part most of the investments have been made as gift, of course there is a question of how "free" is it but i guess that is a worry for another day because as of now, Chinese investment is actually yielding some positive results which look like they'll be sustainable in the long-run.

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  5. Africa definitely shows potential in developing its continent. However, i think there is need to have some political and economic reforms that ensure the effective allocation of the foreign investment being received. China is definitely taking an active role in investing in Africa, which yields positive outcomes for the continent in the short run. In the long run, Africa still has most of its resources being owned owned by foreigners. This has huge consequences on Africa's ability to have a self-driven economy that is not highly dependent on foreigners. I think there is need for African countries to be able to dictate the terms of foreign investment in their respective countries. This will enable those countries to maximize technological transfer and acquire skills, which will help them compete on the global market, in the long run..

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