September 15, 2011
Statement of H.E. Mr. Desra Percaya, Ambassador/ Deputy Permanent Representative of Indonesia on Behalf of the Asian Group at the 58th Session of the Trade and Development Board
Economic Development in Africa: Fostering Industrial Development in Africa in the New Global Environment
Mr. Secretary-General (of UNCTAD),
I have the honour to make this statement on behalf of the Asian Group. At the outset I wish to fully align the Group with the statement made by Zimbabwe on behalf of the Group of G77 and China.
The Asian Group welcomes the holding of this Session on “Economic development in Africa: Fostering industrial development in Africa in the new global environment“. Moreover, the Group wishes to commend UNCTAD and UNIDO for conducting a thorough research and providing appropriate recommendations in the 2011 Report on Economic Development in Africa. The report comprehensively examines the status of industrial development in Africa, including past experiences in promoting industrial development in the region and lessons learned.
The Group is pleased to learn of the renewed commitment of the African countries to industrialization in recent years. Indeed, intense dependence on agriculture and commodities poses a serious threat to a country’s or a region’s capacity and capability to withstand external shocks.
As the report suggests, the African region has suffered a substantial blow to its economy and social development because of the volatility of commodity prices, food price hikes, energy price increases, and the global financial and economic crisis of 2007. The growth rate of real output fell drastically, undermining gains in tackling poverty and further diminishing the prospect of attaining the Millennium Development Goal (MDG) targets by 2015.
In this regard, the Group wishes to underline the importance of making the necessary structural transformation in the economy of the African countries, namely by reorienting the sole reliance on agriculture and to further diversify the economy by developing balanced capacities in other sectors, most particularly in industry and services.
In this connection, the Asian region could serve as an example whereby balanced economic diversification have boosted growth and development in the region. Diversification of the economy have also sustained the region and shielded it from the worst impact of the multiple crises happening in recent years. During the global financial and economic crisis of 2007-2009, some of the Asian countries have even managed to register a positive growth, when many countries and regions experienced a negative growth.
In fact, the Group cannot underscore enough the merits of a diversified economy. However, while the recovery process from the last crisis has been successfully completed, at the same time it is also deeply undermined by the unfavorable economic situation prevailing at the present time. And to add gravity to the situation, there are still the potential global risk of a pandemic outbreak and the menace of climate change to confront.
There are bound to be numerous challenges in making the structural change to industrialization. Developing a competitive manufacturing sector will be one of them, as will also the need to devise a labour-intensive industry and pro-labour policies to absorb millions of new workers every year. It is only logical that there should be in place stable governments and adequate amounts of investment in order to support and advance productivity.
In this connection, the Group is pleased to observe that Asia is increasingly becoming an important strategic economic player in Africa, both in terms of Foreign Direct Investment, and trade. During the period 2003-2008, total exports from African countries to Asia grew by 20 per cent. Meanwhile, Asian exports to Africa are growing 18 per cent per year, faster than to any other region in the world. One third of total African imports come from Asia, second only to imports from the European Union. FDI inflows into Africa expanded nine-fold between 2000 and 2008, much faster than world total FDI inflows or even as compared to total FDI inflows into Asia.
The Group is also pleased to report that the inter-regional cooperation between our two continents is in full swing, in the form of the New Asian–African Strategic Partnership (NAASP), set up in Jakarta, Indonesia, in 2005. With the aim to collectively improve prosperity among Asian and African nations, over 30 capacity-building programmes and projects have been carried out to date, ranging from business and the economy, to environment, intellectual property, and satellite communication and technology.
The NAASP embodies a genuine and valid South-South cooperation that is surely beneficial for the two regions. The holding of the NAASP Summit in South Africa in 2012 is expected to solidify, intensify, and diversify the cooperation between the two dynamic regions, to achieve increased growth and development.
At this point, Mr. President, I should like to conclude by saying that, given the benefits that the full utilization of the NAASP framework will provide, the Group would like to call upon UNCTAD’s Unit on South-South cooperation and regional integration to work closely with both regions to maximize the impact of South-South cooperation within our two regions.
15 September 2011