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)
Updated 6 hours ago A former employee of the Manufacturing, Engineering and Related Services Sector Education and Training Authority (Merseta) and his accomplice have each been sentenced to 20 years imprisonment after being found guilty of fraud by the Specialised Commercial Court, in...
Updated 6 hours ago The Richards Bay Bulk Terminal, in KwaZulu-Natal, loaded 1.49-million tons of cargo in September, exceeding its monthly target of 1.32-million tons, Transnet Port Terminals (TPT) said on Monday. TPT said the reaching of vessel targets ahead of deadline created...
Updated 6 hours ago The revenue implications for South Africa of ‘base erosion and profit shifting’ by corporate taxpayers are firmly in the crosshairs of the Davis Tax Committee (DTC) and Judge Dennis Davis hinted on Monday that recommendations were being considered to “detect and...
Recent Research Reports
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.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
This Week's Magazine
The broad-based black economic-empowerment (BBBEE) alignment process in the con-struction sector has begun, dur-ing which the sector codes of the Construction Sector Charter Council (CSCC) will be aligned with the revised Codes of Good Practice (CoGP), which come...
It is second time lucky for Toby Venter. Ten years ago he negotiated to buy the Kyalami racetrack, but “the deal did not materialise”.
Environmental solutions company I-Cat started construction work on its R22-million, 1 949 m2 environmentally sustainable office and warehouse facility, commissioned by I-CAT Environmental Solutions, at a launch event in October. The new sustainable I-CAT campus,...
Effective file synchronisation and sharing across an organisation’s structures can provide the basis for robust mobile-device and document management while maintaining proper backup, version control and content distribution. These are the lessons learned by complex...
Hotel group Carlson Rezidor currently holds the largest hotel pipeline in Africa with 30 hotels and 6 300 rooms under development. The hotel group develops and operates Radisson Blu in the upper upscale segment and Park Inn by Radisson in the mid-market segment. With...