Monday, November 17, 2008

Africa has One Country at G20 Conference, Many Urge that Focus Remain on Trade

Business Daily Africa
Africa Reuters
Financial Times

Africa’s financial institutions have generally been insulated from the direct effects of the credit crisis, but the continent is still concerned with the slew of secondary effects that arise from the crisis. Conversation about the credit crisis and its affect on Africa is again centered around a few key issues; namely, that the crisis will diminish trade opportunities, access to finance, remittances, and foreign direct investment. As the G20 met to discuss international financial coordination, only one African country, South Africa, was invited to represent the continent.

African finance ministers and central bank governors did, however, meet recently in Tunisia to discuss the outlook for Africa. Though those at the meeting admitted that this international credit crisis could not have come at a worse time for Africa, African countries were committed to continuing economic reform and the tough macroeconomic policy that has stabilized economic conditions throughout Africa. The ministers also view the crisis as an opportunity to diversify from predominant commodity exports.

This will not be possible, however, unless countries stay committed to avoiding protectionist stances on trade. The African financial ministers have called for trade talks, such as the WTO’s Roha Round, to begin again. The ministers said that, “This will stimulate the world economy and enhance opportunities for the poor, particularly in Africa. We call on all countries to refrain from protectionist tendencies.” Other experts would like to see a stand alone trade agreement for Africa that increases regional coordination and address infrastructure constraints on trade. They claim that the only way for the success of capitalism to spread to poor African countries is through continued and robust trade.

1) How likely is it that G20 countries will focus on trade agreements at a time when their financial institutions and credit markets are in dire circumstances?
2) Do you think that it is right for Africa to only have one representative at the G20 meeting? Attendance is based on the overall size of a country’s economy, yet this leaves close to a billion people unrepresented. Are there other avenues that Africa countries can pursue in order to have their voice heard?

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