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2 Africa seeks lessons in
Shanghai By Zhou Jiangong
SHANGHAI - The two-day annual meeting this
week of the board of governors of the African
Development Bank Group (AfDB) held in China's
largest commercial metropolis signals an upgrading
of economic cooperation between the Middle Kingdom
and Africa that will benefit both sides.
For the Chinese government, it was not so
much to show its hospitality as to express its
sincerity in furthering its cooperative ties with
Africa that it hosted the AfDB assembly, which
ended on
Thursday, in Shanghai's
skyscraping Pudong area.
On the other
hand, African countries, which are increasingly
discontent with their growing dependence on
exports of natural resources to boost economic
growth, want to learn from China and seek its help
in changing their growth patterns by developing
"home-grown" industries.
At the bottom of
a flyer at the opening ceremony presided over by
Premier Wen Jiabao, every representative could
read: "Be kind, for everyone you meet is fighting
a hard battle." The quotation is from the ancient
Greek philosopher Plato rather than from
Confucius.
It was the second time the
largest multinational bank in Africa, in which
China is a non-African shareholder, has held its
annual assembly outside the continent in its
43-year history.
African countries are
fighting hard battles in reducing poverty,
containing AIDS, and providing clean drinking
water and sanitation to residents.
But for
Donald Kaberuka, the president of the AfDB, as
well as other African economic officials, the
hardest battle is to find a cure for the perennial
"disease" in African economics: that countries are
becoming increasingly reliant on the export of
natural resources.
"The African economy
has been in the best shape [it has ever been in]
in the past five years, since the independence" of
the continent. And he is right in saying this. The
average growth in gross domestic product (GDP) on
the continent has been more than 5% in the period.
But there is a flip side to the African growth
tale.
The small economic boom is pretty
much driven by the windfall of high prices for
oil, minerals and other raw materials. The
continent as a whole has concentrated on more
exports of raw materials to boost the economy.
According to the newly released African Economic
Outlook by the Organization for Economic
Cooperation and Development (OECD) and the AfDB,
the Economic Diversification Index (the higher the
more diversification) has dropped from 8.1 to 4.1.
The development path of Africa in the past
decades tells the story of a boom-bust economic
cycle largely dictated by prices of the raw
materials that the continent exported.
Now
it is booming again. For the AfDB and the OECD,
the oil-exporting countries are outpacing others
by a substantial margin. Angola's growth, mainly
driven by exporting oil and diamonds, can average
well above high double digits from 2004 to 2008.
In 2005, the growth was a whopping 20.6% and in
2007 a breathtaking 26.9%, as projected by the
OECD.
In coming years, Africa's economic
picture could be rosy. The continued global
expansion continues to sustain demand for oil and
other industrial raw materials at relatively high
prices. At the same time, a significant increase
in official development assistance to Africa and
improving macroeconomic stability have all
contributed to this positive economic outlook.
But over the longer term, as Louis
Kasekende, the chief economist at the AfDB,
pointed out, the outlook on growth can be
discounted.
That can partly explain why
financial ministers and central-bank governors
from 53 African countries were flown to Shanghai
to get "inspiration" from China, a big importer of
African resources.
But for the Chinese
government, to host the annual meeting is an
important move to implement the country's grand
African strategy set at the Beijing Summit of the
Forum on China-Africa Cooperation last November by
President Hu Jintao and the leaders of 48 African
states.
China needs good cooperative ties
with Africa to secure supply of oil and raw
materials as well as markets for Chinese goods and
investment. China also needs the support of
African countries in international affairs.
The importance China has attached to its
ties with Africa was illustrated as by President
Hu's visit to eight African countries this
January, just weeks after the Beijing summit. Hu's
visit was to "deliver in person the fruits of the
Beijing summit to African friends", Wei Jianguo,
China's vice minister of commerce overseeing the
country's trade and economic cooperation with
Africa, said at a gathering of African bankers and
financiers.
Since the end of 2006, China
has been Africa's third-largest trade partner and
is well on track to becoming No 1. The Ministry of
Commerce has estimated that China trade has
already contributed one-fifth of Africa's economic
growth.
Premier Wen pledged at the
Shanghai meeting's opening ceremony on Wednesday
that China will fully honor its
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