New strategy for Asia-Africa economic cooperation

Yash Tandon and Chandra Kant Patel Geneva

The conjuncture of rapid structural transformation in a growing number of economies of Asia, the adoption of reforms to revive Africa's economic prospects, and the expected leveling -- off in demand and income growth in the advanced economies provides a propitious setting for renewed efforts to strengthen Afro-Asian economic cooperation. Emerging complementarities between the economies of the two regions, buttressed by macro- economic reforms of the recent past, have contributed to a rapid growth in trade, investment and financial flows between them.

The expansion in inter-regional trade has, potentially, far reaching consequences not only for these two regions but for the world economy as a whole. It signals, for example, a rupture in the center-periphery pattern of trade that has historically defined developing countries relations with the North. These shifts are also likely to affect the quality of trade relations: intra-developing trade is more likely to reflect equality and mutuality of interests, unlike the rancor and dependence that characterizes North-South trade relations.

As regards OECD economies, the New Strategy will need to take into account demographic trends and consequences of an aging population, declining savings (and long-term investment) and stagnation in demand due in part to a saturation of consumption and stagnation in income growth. The New Strategy must therefore address the implications of shifts in the loci of dynamism and growth away from developed to other regions of the world.

Deepening Afro-Asian ties, however, will require sustained political efforts. One of the lessons deriving from earlier measures to increase economic cooperation and promote integration, no less within regions as between them, suggests that in the absence of a high degree of political commitment and support, such efforts are unlikely to secure the full benefits of mutual cooperation.

At the same time, given the considerable heterogeneity within and between the two regions, efforts towards enhancing cooperation must necessarily embody multiple approaches. In this regard, strengthening intra-regional cooperation will itself have spillover effects towards strengthening inter-regional ties via the provision of more secure and larger trade and investment markets.

The several existing structures designed to promote sub- regional, regional and even inter-regional arrangements will be required to play a leading role in providing form and content to a New Strategy for Enhancing Trade, Investment and Technical Cooperation (New Strategy). Likewise, beyond the important catalytic role of Governments, civil society will have to play a greater role than heretofore. New partnerships embracing business, industry, centers of learning and research and other non-governmental structures will, to a much greater extent than before, be expected to drive the process of cooperation.

A tri-partite framework of cooperation involving inter- governmental forums, sub-regional organizations and people to people and civil society interaction should be formalized to the extent possible and structured to permit its growth. The forthcoming Asian-African Summit in Jakarta therefore has a central role in designing and establishing such a framework within which the New Strategy can be nurtured.

An important component of such a framework must be the establishment of follow-up arrangements to service the technical and policy-making organs of the New Partnership, to monitor progress in the implementation of the decisions and to help coordinate the work of existing institutional structures and private-public partnerships in support of the New Strategy.

Such an effort would require political guidance and leadership on an on-going basis and for which a standing bureau of the conference could be established to meet periodically, including at heads of states levels, to monitor progress and take appropriate decisions. The follow-up structures could consist of one or more of the regional organizations and new ones to be created such as, for example, An Afro-Asian Trade and Investment Chamber.

Priority areas critical for the success of the New Strategy include: Policies and measures regarding international trade and the harnessing of comparative advantages between the two regions; the role of a revived Global System of Trade Preferences; cooperation in the field of commodities, investment and transfer of technology and special measures for the least developed countries.

Likewise, sharing of expertise and knowledge, learning from best practices concerning agricultural, industrial and commercial policies, and related measures covering FDI and its promotion, transfer of technology and competition policy should be expected to form a key component of the New Strategy.

In this respect, the role of non-governmental actors in promoting learning and sharing of experiences must be highlighted. Access to the resources at the disposal of the private sector and related associations such as Chambers of Commerce, Business and Industry associations and Export and Investment promotion agencies would complement the traditional Government to Government mode in the delivery of technical assistance.

The establishment of a network of relations between Asian and African Universities and centers of research could play a leading role in training, increasing exchanges of students and faculty, building technical capacities and sharing of knowledge in a wide range of development policies and areas.

Given the similarities of development experiences, provision of technical assistance between Asia and Africa is likely to be more productive, cost-effective and better adapted to each other's need than support from the traditional providers of such assistance.

However, this will not take place spontaneously or at levels warranted by needs or demand. The transfer of technical knowledge and assistance among them must be supported by, as necessary, contributions from Governments and private entities and for which consideration may be given to the establishment of an Afro-Asian Technical Assistance Pool to be managed and administered by one or more of the existing institutions of cooperation in the two regions.

Yash Tandon is Executive Director of the South Centre, Geneva. Chandra Kant Patel is Co-ordinator in Geneva of the Southern and Eastern African Trade Information and Negotiation Institute (SEATINI).