Africa must push into Asia
Africa must push into Asian markets to support economic growth because the effects of financial crises in the US and Europe may drag on for two years, says Joseph Stiglitz.In a speech at the African Development Bank (AfDB) in Tunis, Stiglitz said some African governments were still incapable of managing their natural resources in order to accumulate the reserves they need to resist the global economic downturn.
The AfDB has forecast Africa's economic growth will accelerate to as much as six percent this year from around four percent in 2009 due to a revival in investment flows and commodity exports that dried up in the global slump.
"Africa must change its economic geography and steer towards the Asian market because the repercussions of the crisis will still be present in 2011 and 2012 in the USA and Europe," said Stiglitz.
Africa's strongest economic links were traditionally with Europe but its trade with Asian states has grown fast as China seeks access to the continent's oil and mineral wealth and Africans are drawn to cheap Asian consumer goods.
Speaking at a conference on Africa's emergence from the global economic downturn, Stiglitz said African governments need to warn of impending crises before they happen.
Once crises begin, he said, they will not end without proper state intervention.
He said African countries rich in natural resources such as oil had less need of privatisations and should better manage their resources through investment, creating job opportunities and boosting health services.
"A lot of countries in Africa do not know how to manage their natural resources like oil, he said. "Natural resources should be used in the interests of Africa, as is the case in Chile."
"African countries must have built-up reserves, especially those with natural resources," he said. The states least affected by the latest crisis are those with lots of reserves."
Stiglitz, who received the Nobel Prize in Economics in 2001, has argued that economies are most efficient when they find a balance between state and market-driven policies.
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