Tuesday, May 23, 2006

Chinese And Indian Boom Benefiting Other Poor Countries Too

A new report from the OECD says that the boom in Asia, particularly China but also India and other in South Asia and East Asia is not only greatly reducing poverty there but also in Africa, a continent where per capita income have fallen behind and poverty risen in recent decades, largely due to the destructive policies of dictators like Robert Mugabe.

Although China and India competes with African countries to some extent, this is -at least for Africa as a whole- more than outweighed by how China and India first of all provides cheap consumer goods, secondly how they provide investment capital for Africa and most importantly how they raise commodity prices. Africa as a whole are net exporters of commodities and they benefit for that reason from rising commodity prices just like Canada , Australia and Norway do.

It could also be added that the higher commodity prices have benefited another poor region, Latin America too, with for example Chile (Copper), Mexico (Oil and Silver), Venezuela (Oil) and Brazil (Agricultural commodities like soya and beef) benefiting from improving terms of trade due to the commidty price rally.


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