Feb 16, 2011
South-South trade booming despite high trade barriersBack
© Reuse this
Speaking at a Frontier Advisory seminar at the JSE, OECD Development Centre director Mario Pezzini said that South-South trade had experienced tremendous growth in recent years, with exports from developing countries now constituting 37% of global trade, of which about 50% related to South-South trade.
“The sharp increase in trade between developing countries, despite barriers remaining, just shows the increasing importance of these trading relationships.
“This leaves lots of opportunity to improve on the flow of trade, just imagine what gain would lie in the further reduction of trade barriers,” said Pezzini.
Historically, developing countries focused on preferential access to developed markets, but Pezzini said that the global economy had dramatically changed over the last two decades with wealth shifting from the developed world to developing countries, necessitating a change in thinking and attitude when it came to trade.
The situation was further exacerbated with the recent economic crisis, where developed economies experienced a recession, while some emerging economies continued showing double-digit growth figures.
Developing countries contributed to about 70% of the world’s growth in the last decade.
Pezzini said that the strong growth was fuelled by the rising demand for resources, especially from the growing Asian giants, which led to a decade of higher commodity prices and also stimulated growth in those countries producing raw materials.
Further, emerging markets started implementing better fiscal and macroeconomic policies, while increased liquidity provided for lower interest rates.
The OECD anticipated that the growth trend would continue, saying that while the developed world contributed about 60% of the world’s gross domestic product (GDP) in the 1990s, the picture would be reversed by 2030, with developing countries contributing 60% to the global GDP numbers.
However, Pezzini pointed out that accelerated growth from these countries had resulted in greater inequalities in society, which could lead to political unrest, like the recent displays in North Africa.
He said that good policy and governance was needed in these countries to build the correct developmental infrastructure, improve education and increase human capital, while continuously diversifying their economies with a strong focus on productivity and innovation.
“A great way to achieve this, is through the exploitation of the power of peer-to-peer learning, where policymakers can come together and share their successes and failures with each other. The OECD Developmental Centre has identified a strong demand for such policy dialogues and we have already arranged a number of opportunities for such interaction in the coming months,” concluded Pazzini.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Video News
International consulting engineering company Royal HaskoningDHV (RHDHV) has appointed Salani Sithole as South African MD, effective March 1. Sithole has been with the company for six years and, prior to joining RHDHV, held various positions in engineering consulting,...
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
This Week's Magazine
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.
In a recent letter to the editor that I sent to Engineering News (Concerns regarding South African portion of Square Kilometre Array) and in a follow-up article elaborating further (We must start preparations to build our own synchrotron light source), I stated my...