UNU-OECD Panel Discussion China and India: What’s in it for Africa? UNU-WIDER Research Project: The Southern Engines of Global Growth Amelia U. Santos-Paulino UNU-WIDER United Nations, New York 7 September 2006 : UNU-OECD Panel Discussion China and India: What’s in it for Africa? UNU-WIDER Research Project: The Southern Engines of Global Growth Amelia U. Santos-Paulino UNU-WIDER United Nations, New York 7 September 2006
UNU-WIDER : UNU-WIDER China’s and India’s development channels OECD Report
Asian Drivers: a taxonomy of impacts and policy interactions
Trade and price trends Plan
China’s and India’s development channels : China’s and India’s development channels Both countries are characterised by strong cultural traditions and political systems.
Robust economic growth resulting from economic reforms -with the Chinese growth higher than the Indian largely because of higher investment (mainly FDI).
While the emphasis on services rather than manufacturing has been widely noted, within manufacturing India has concentrated in skill-intensive rather than labour-intensive manufacturing, and industries with typically higher average scale than China.
Growing concerns about uneven distribution of opportunities across states in China and India:
The fast growing peninsulas vs. the slow-moving hinterland;
Sectors: services vs. manufacturing or agriculture; and
Skills and education levels. UNU-WIDER
OECD Report : OECD Report The Asian Drivers are
Growth paradigms;
Key global price setters: commodity, interest rates, etc.;
Potential markets;
Competitors in third markets;
Investors and sponsors;
Polity determinants. UNU-WIDER
OECD Report : OECD Report Relevant areas of policy interaction with Africa:
Commodity price levels and volatility
Exchange rate developments and resource allocation
Low-wage competition and income distribution
Industrialisation strategies
Capital flows impacts (through FDI, project finance, public-private joint ventures); and
The political economy of Chinese and Indian FDI and ODA (corruption, rent-seeking, business environment).
UNU-WIDER
OECD Report : OECD Report
Changes in TOT are affected by:
The lower prices of manufactured goods
Higher raw material prices
Exchange rate appreciation in China and India
UNU-WIDER The rise of the Asian Drivers and the impact on Africa’s commodity prices and Terms of Trade
Figure 1 Global Trends in Output and Exports : Figure 1 Global Trends in Output and Exports UNU-WIDER Source: Santos-Paulino, A.U., WIDER Angle (2005).
Figure 2 Africa Terms of trade, export volume and purchasing power of exports : Figure 2 Africa Terms of trade, export volume and purchasing power of exports Export volumes and Purchasing Power Net barter TOT Source: UNCTAD Trade and Development Report (2005). UNU-WIDER
Figure 3 Terms of Trade in Developing Countries (2000-2004) : Figure 3 Terms of Trade in Developing Countries (2000-2004) Source: UNCTAD Trade and Development Report (2005). UNU-WIDER
Figure 4 Changes in export prices of resources based manufactures according to income levels : Figure 4 Changes in export prices of resources based manufactures according to income levels Source: Kaplinsky, R. and Santos-Paulino, A.U. (2005), Innovation and competitiveness: trends in unit prices in global trade, Oxford Development Studies. UNU-WIDER
Figure 5 Changes in export prices according to industry technological content : Figure 5 Changes in export prices according to industry technological content Source: Kaplinsky, R. and Santos-Paulino, A.U. (2005), A disaggregated analysis of EU imports: the implications for the study of patterns of trade and technology, Cambridge Journal of Economics. UNU-WIDER
UNU-WIDER’s Project : UNU-WIDER’s Project UNU-WIDER
Main issues : Main issues CIBS-CIBS CIBS-Developing Countries CIBS-Global Economy Growth determinants and mechanisms
Linkages between CIBS that can affect growth
Global governance implications Importance of CIBS as engines of growth for developing countries
Implications in terms of growth prospects and development strategies
An integrated development agenda? Impact of CIBS’ growth on international markets (through trade and investment)
North-South and South-South linkages and cooperation
UNU-WIDER
Main areas of research : Main areas of research Growth and development
Commodity and services trade
Financial flows
International governance
UNU-WIDER
WIDER’s Southern Engines Project : WIDER’s Southern Engines Project Departure from other projects
Global scale, not only China and India;
Macro and micro issues considered;
Emphasis given to comparative studies and implications for national policy and global governance.
UNU-WIDER
Future Activities : Future Activities January 2007 China. A 2-day workshop plus a parallel session at the GDN annual meeting will focus on growth in China and India: lessons and consequences on other countries. Employment implications, energy and geo-politics issues will be considered as well.
Summer 2007 Workshop. Will focus on commodity and services trade, including: changing patterns of trade, technology contents of traded commodities, competitive and complementary trade relationships,
volatility in commodity prices, business cycles and cross-boarder risk transmission, WTO negotiations, off shoring and outsourcing, product upgrade and Regional Trading Agreements (RTAs).
Sept 2007 WIDER-Helsinki. A large conference that will cover all the four major themes with additional topics:
Historical (socioeconomic and political) background and development prospects of CIBS, including potential setbacks and/or policy reversals
Global economic modeling (GTAP, Macro-micro linkages, etc.)
Political economy issues
Opportunities, challenges and threats of CIBS growth UNU-WIDER
Slide18 :
Late 2007 Latin America. Meeting focusing on financial flows and related issues, such as roles and determinants of FDI, government strategies/policies in attracting FDI, volatility of financial flows, prevention of financial crisis, savings and domestic-foreign capital relationship (crowd out/in), spill-over effects of FDI, FDI and trade, exchange rate regimes, capital account control/decontrol.
Other Prospective Activities
Capacity building workshop in Africa in mid-2008;
NY/Washington Seminar in late 2008, focusing on preliminary project findings with a special emphasis on international governance.
UNU-WIDER
Challenges for Africa, CIBS and other developing countries Further issues for investigation : Challenges for Africa, CIBS and other developing countries Further issues for investigation
Improve market access for Africa’s and other LDC’s goods;
Enhance governance standards and absorptive capacity
The role of price incentives, production costs, infrastructure constraints;
Global inequalities and regional disparities;
Skills and human capital (talent) mobility
Property rights: negative impact on users of intellectual property versus the interest of intellectual property owners; impact on sensitive sectors (e.g. Drugs –health inequalities).
UNU-WIDER