Sunday, August 21, 2011

Developing Nations Trade Amongst Each Other

Nations like India and China have shed new light on south-south co-operation, developing countries sharing resources. As their economies have grown, these nations have increased their investments in parts of Africa and Asia. Currently, China and India account for one fifth of the global economy, and are said to make up one third by 2025.

The United Nations Conference on Trade and Development estimated that, between 1996 and 2006, developing economies provided more than $17bn of foreign investment in Africa and $27bn of investment in Asia. This is not aid money, but rather an investment that the donor country will benefit from.

This mutual growth cannot happen through market forces and private initiatives alone, however. It is important to have policymaking and government action acting in these new economic ties. For example, China and India’s economic successes were achieved through the notion that domestic factors play a crucial role while market integration creates new opportunity for growth.

By building off one another, developing nations have a real chance for economic success.

-Sami Ressler