The Effects of Globalization in African

Countries

Túlio Igor S. Pereira

ECON 490: Contemporary Issues in Economic Globalization

Professor Ramon Castillo-Ponce

Key Issues In more than 200 years of Economic

Development, how has Africa performed relative to other countries? How can this performance be explained?

How is Globalization helping in the development of African countries?

Are there special cases where Globalization seems to be working in Africa?

In this section I used interactive graphs with

the Gapminder software which you can obtain

for free at http://www.gapminder.org/downloads/

If you do not want to download the software, there is also an option to use it directly on the website (all you need in this case is a web browser with flash).

The software has more than 600 indicators spanning over 200 years of data, so please feel free to play around with it!

The ones I used were the following (Life Expectancy vs. Income per Capita and Life Expectancy vs. Children per Woman):

Economic DominationExports:o The export of raw materials and

cash crops to Europe accounted for most of Africa’s wealth during the European Rule.

o Most explored natural resources: Copper, Gold, Diamond, Cotton and Cacao

Styles of Colonial Rule Variedo Africans had limited opportunities to take part

In government

o Wealth and power remained in European

hands.Source: Encyclopedia Encarta

Post-Independence Economic Development After Independence, countries were expected to side

with one of the two superpowers: the U.S. or the USSR

Many countries in Northern Africa received military aid from the Soviet Union. Angola and Mozambique were also Soviet allies.

Countries had to borrow heavily to finance their economic projects: - By the 1980’s African nations owed more than $200 Billion to

Western governments and International Organizations such as the IMF.

Africa’s resources still attract foreign countries, but the involvement of the countries in the Continent have often been dubbed to be a new form of Neo-Colonialism

Africa and the World / South-South Cooperation

“Horizontal” cooperation is increasingly higher between

other developing countries and Africa.

More particularly, China’s involvement in the continent is noteworthy:

China is now Africa’s largest trading partner – Bilateral trade

grew more than 43% in 2010 ($115)

Chinese Direct Investment has jumped from $0.5 Billion to $9 Billon in 2009

Growth in trading relationship is fueled by Chinas increasing demand for natural resources such as oil, gas, and minerals.

Source: Foreign Policy Magazine

Source: Foreign Policy Magazine

Source: Foreign Policy Magazine

A Case Study: Botswana

Botswana: Opening Up for Business“Give me Trade, Not Aid”

Source: http://www.youtube.com/watch?v=2_UyoP8BwuU

Concluding Thoughts

The colonial legacy hindered the economic development of Africa for too many years.

In most cases, post-colonial economic policies worsened the cases of many countries in the continent.

Economic liberalism and South-South cooperation may be one of the best paths to undertake in this new era of Globalization.