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  • 2010-2 ISSUES

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  • ISSUE 2/2010

                                                                                                                                                  2-2010 

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  • South-South trade has grown steadily over the last decade to become an important feature of international trade. Growth has been rapid and has tended to cover a broader range of products than South-North trade. Moreover, growth has been evident in areas of higher value addition and technological content offering prospects for reducing dependence on commodity trade. The greater proportional drive coming from enterprises compared to the efforts of governments still leaves scope for improvements in trade facilitation and other trade-generating initiatives.

    With an increasing demand for market-based solutions to poverty, innovative businesses like LeapFrog Investments have identified the opportunity to develop business models targeting low-income customers that are profitable, scalable and offer competitive returns for the major financial investors they are attracting.Launched in 2008 by former United States President Bill Clinton, LeapFrog Investments is the world's first and largest microinsurance fund, investing in businesses that provide affordable insurance to low-income and vulnerable people in Africa and Asia.

    With the prospect of recovery from the global financial crisis, enhanced by stimulatory spending by national governments, there are forces at work that will assist in developing a sustainable recovery, although some lingering risks remain. Emerging markets can play a key role by continuing to strengthen their participation in global trade and investment with parallel measures aimed at stimulating domestic demand.

    Africa has traditionally been an important cotton production base. Before the textiles and clothing quota phase-out, cotton markets were mainly in Europe. Today almost 80% of world cotton fibre is processed into yarn in Asia. In contrast, fibre transformation rates in Africa are at a historic low. Thus, on average, 83% of sub-Saharan African cotton is exported as lint, almost exclusively through international merchants to Asia.

    ITC Market Analysis Tools: Enhancing the Transparency of Global Trade and Market Access

    Arequipa, Peru's second most industrialized city and commercial hub, supplies 85% of the world's alpaca fibre. Recognizing the export potential of women entrepreneurs in the Arequipa alpaca textile and clothing sector, ITC - together with the Peruvian Export and Tourism Promotion Commission (PROMPERU) - developed a project to strengthen their capacity to penetrate international markets more competitively. The project approach focused on three key areas: design and product development; market access; and business development and marketing strategies.

    The past decade has seen tourism drive poverty reduction, especially in Africa. Investments in the tourism industry have led to new employment opportunities and increased income for poor communities situated close to tourist destinations as a result of tourists spending more time and money in these areas. Indeed, developments in the tourism industry and its related value chains have resulted in notable increases in trade through tourism.

    A study conducted into the health biotechnology sector in six developing countries with substantial biotechnology industries throws new light on far-reaching productive results of cooperation within the sector. The emergence of post-colonial South-South collaboration in these countries is helping move joint activity beyond political rhetoric to a substantial economic reality, despite most international ties in developing countries remaining with the North.

    AfDB supports the economic empowerment of African women and the new network New Faces, New Voices. As the global financial system is being reshaped, it is time for financial institutions and regulators to realize that women represent an emerging market.

    With increasing globalization and technological developments that enable business processes independent of location, many countries around the world have become attractive sites for Western companies. While access to cheap labour was previously the dominant motivation, nowadays emerging markets compete more on availability and scalability of skills. The global services market has become highly competitive, and differentiation of service offerings and leverage of inherent advantages, including cultural and language affinities, set the scene for keen competition between offshoring destinations.

    In the aftermath of the global financial crisis, a new world order is emerging. It is a world of rapidly shifting markets characterized by changing patterns of trade, investment and opportunity. The developing world is increasingly becoming an important driver of the world's economy; South-South and intra-regional trade are growing rapidly; supply chains are changing; and opportunity exists in an environment where business flows in every direction.

    UNECA Economic Report on Africa recommends Strategies for GrowthThe 2010 Economic Report on Africa, compiled by the United Nations Economic Commission for Africa (UNECA) and the African Union Commission, has provided African States with strategies to promote growth and alleviate economic vulnerability.

    The global economic crisis has radically changed market opportunities and the global business environment. As the global economy rebalances, the new drivers of economic growth are expected to come from increasing consumption in and demand from emerging markets.In this edition, we explore the impact of shifting market trends on trade, investment and opportunity with commentary from leading businessmen and -women, economists and researchers. We also take an in-depth look at some of the challenges and opportunities these shifts are presenting for sectors including foreign investment, biotechnology, services outsourcing, tourism, textiles and clothing.

    The considerable expansion in South-South trade, especially in the last decade, is seen as an exciting new phenomenon with a number of developing countries among the major trade partners. Trade and investment ties between South Africa and Brazil in particular have been strengthening, underpinned by the reach and influence these two countries enjoy in their respective continents. Despite short-term setbacks due to the global financial crisis, differing comparative advantage in products produced in the two countries provides many opportunities for expansion in two-way and regional trade and investment.

    In the aftermath of the global financial crisis, the driving forces of economic growth, international trade and finance will shift even more rapidly towards developing countries in Asia and the emerging economies, underscoring the importance of South-South cooperation. The countries of Latin America and the Caribbean will need to form trade and investment partnerships that go beyond free trade agreements in order to further integrate Asian production and export chains. There is a need to reduce the marked asymmetry between large volumes of trade and small reciprocal levels of investment.

    Africa is emerging as an attractive investment destination and a key market for goods and services. Southern Africa, in particular, has changed significantly in the past decade showing a reduction in levels of indebtedness, an increase in the number of politically stable and democratic countries and solid measures to curb corruption.

    Managers of enterprises feel the effects of economic uncertainty in their home markets and struggle to interpret the changing economic climate and the direction change will take. For those fortunate to have effective trade support institutions (TSIs), finding a way forward is easier. The mandate of TSIs is to support the efforts of entrepreneurs and to find practical ways to help them compete effectively. As South-South trade grows regional, TSIs are taking up the challenge and finding ways to make a difference.

    The sustained rapid growth of many African economies over the past decade and a half, bolstered by resilience during the recent global economic crisis, has been appreciated more by the countries of the South than those of the North, the traditional source of much foreign investment in Africa.