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TRADE-AFRICA: &#39&#39Focus Should Be on Domestic Needs, Not Exports&#39&#39

Rosalia Omungo

DAR ES SALAAM, Dec 3 2007 (IPS) - African states should address the needs of local markets and of their regions before looking at what can be exported globally, and not the other way round as is currently the case.

This proposal was made by a participant at a meeting of the Helsinki Process on Globalisation and Democracy which was held in Dar es Salaam, Tanzania, from November 27-29.

The process is a joint initiative of Tanzania and Finland aimed at mobilizing political will and resources towards actualising global development commitments. These include the United Nations’ Millennium Development Goals and Millennium Declaration.

‘‘The assumption is if we export primary commodities, they will raise capital which will have a ‘trickle-down effect’ and address developmental needs. But, as you know, that is not happening, despite many of our goods and resources being exported,’’ said Michelle Pressend, senior researcher at the South African international relations think tank the Institute for Global Dialogue.

"We should only trade in things we don’t have. For example, if we can’t manufacture medical equipment, we can import it. But food and basic necessities are things that African countries can produce themselves.’’

‘‘Countries need to take into account their resource bases. There are countries that are water scarce, like South Africa, Namibia and Botswana. Perhaps they shouldn’t be focussing on agriculture. Maybe this should be left to countries like Zambia and Zimbabwe that have water. They should be growing maize and other agricultural products.’’

Pressend is of the opinion that countries lacking in water, for example, should concentrate on adding value to commodities. For this reason, she suggests there should be negotiation and collaboration among African countries about diversification rather than countries competing by producing similar goods.

Production remains at the level of primary commodities with little diversification. To address this, technology, strategic direction and investment from the public sector are required, Pressend said. Governments should also invest to build industry.

The important thing is to focus on countries’ productive capacity. This will create jobs, she pointed out.

Governments should put in place financial frameworks and conditionalities for investments to ensure that resources are made available for the development of local technology. For example, argued Pressend, Chinese companies interested in mining minerals in Africa should provide technology transfer in return.

‘‘In order to develop our industries, we as Africans need to put in place investment conditions or codes for national, regional and international investors.’’

She also said that a focus on informal cross-border trade is necessary for the development of trade among different African regions. This is key for development and tackling economic challenges.

‘‘While formal trade is important, we must focus on informal trade and how it can be facilitated. The informal sector forms a big part of our economies, yet there are insufficient resources to promote its development.

‘‘We need to look at options such as developing local markets and co-operation at national level, especially in agriculture. Our production should not just be directed at exports. The focus should be to provide sufficient resources, water and inputs,’’ Pressend proposed.

She also warned that ‘‘it is important for countries to retain protective tariffs. If we liberalize trade, we will be subjected to strong competition by European companies and will never be able to compete. Our production and our industrial strategies must be protected’’.

Mat Noor Nawi, the director of the economic planning unit of the prime minister’s office in Malaysia, told the conference that the interface between developed and developing nations should not favour one side at the expense of the other.

‘‘Developing countries should be allowed to determine their own policy space,’’ he said, adding that Malaysia’s success story shows a lot of emphasis needs to be placed on monitoring and evaluation of programmes and policies.

He also stressed flexibility and people-centred approaches, political stability, well co-ordinated mechanisms and active non-governmental organisations and private firms as part of the reasons for growth in the Malaysian economy.

Dr. Samuel Wangwe, a consultant, and Dr. Yash Tandon, executive director of the intergovernmental think tank for developing countries the South Centre which is based in Geneva, Switzerland, agreed that alternative knowledge systems were needed. Wangwe proposed increasing capacity for policy research.

Participants reiterated that developing countries should be allowed to determine their own policy spaces and that developed countries’ support for developing countries should be flexible.