Third World Network
Africa: Deeper regional integration needed in response to crisis
Published in SUNS #6728
Geneva, 25 Jun (Kanaga Raja) — The global economic crisis, which has reached the African continent, requires the re-examination of existing approaches to international development, with one important response being deeper regional integration to address the long-standing structural weaknesses of African economies, the UN Conference on Trade and Development (UNCTAD) said Thursday.
In its “Economic Development in Africa” report for 2009, UNCTAD says that regional integration is essential for sustained development on the continent, especially within the context of the current crisis.
It argues that better links between countries, ranging from paved roads to banking cooperation, are needed to spur mutual economic growth. Weak physical and institutional infrastructure is the key obstacle to increasing intra-African trade and investment.
The report notes that Africa currently has the world’s lowest shares of regional trade and investment – 9% of recorded flows of total external trade and 13% of recorded flows of total inward foreign direct investment.
The report on Africa comes just as UNCTAD revealed on Wednesday that global foreign direct investment (FDI) inflows and cross-border mergers and acquisitions (M&As) – the main mode of FDI – drastically declined in the last quarter of 2008, and the fall has continued into 2009. FDI inflows dropped by 54% and M&As by 77% during the first quarter of 2009 as compared to the same period last year.
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