| The introduction of Africa in the world market | | | | dangerous trap of a simplistic participation in world |
| started since the 15th century, could not in many | | | | trade. |
| respects be considered as a positive venture. Africa's | | | | SOUTH-SOUTH COOPERATION FOR SELF RELIANCE |
| backwardness compared to the rest of the | | | | As Todaro(1992) pointed out while it may be possible |
| world(developed countries, newly industrialised | | | | for many less developed countries to be self reliant |
| countries and emerging countries) which is a paradox | | | | on an individual country to country basis, some form |
| due to its enormous resources and potential, clearly | | | | of trade and economic cooperation among equals is |
| demonstrate that Africa remain the great loser of | | | | probably preferable to each country trying to 'go |
| the international economic order. A situation | | | | alone' in a world of unequal trade, technology |
| worsened when considered the policies undertaken | | | | dominance, increasing protectionism among developed |
| by developed countries: the creation of regional and | | | | countries and various forms of non market price |
| non regional trade blocs, the protection of domestic | | | | determination. This means more than ever before, |
| markets through quotas. | | | | before initiatives toward south south cooperation |
| According to Gunnar Myrdal, the underdevelopped | | | | should be perceived as the basement of any sound |
| countries 'way of handling their commercial policy will | | | | economic policy undertaken by a third world country |
| be one of the most significant factors in determining | | | | possessing a potential or a resource to exchange. |
| whether they will fail or succeed in their drive for | | | | The south-south cooperation will accelerate the pace |
| economic development' This assertion has the merit | | | | and render effective the economic independence of |
| of addressing trade as the dominant economic | | | | LDCs. The Northern partners of southern countries |
| activity possible in Africa and other Third World | | | | would be progressively replaced by southern |
| countries. It therefore takes into account the fact | | | | partners. For instance, Nestlé could rightly |
| that African countries could not live in isolation and | | | | face a competition from Brazilian coffee, South |
| retrenched the fact that the growing competition in | | | | African milk whose industries in these domains of |
| the production and distribution of goods and services | | | | activities could quickly develop to satisfy that aim. |
| will render these countries more vulnerable each day | | | | The result would actually be a multiplication of |
| if nothing is done. As a consequence a reflection | | | | vendors which will inevitably affect the prices of |
| needs to be conducted as concerns industrialisation | | | | those commodities, in such a situation it's quite sure |
| and trade for effective development in a context of | | | | the customer would soon pay the real price. In |
| liberalized market. | | | | addition, one could believe, the relative proximity |
| A DISTORTED AND UNFAIR ECONOMIC ORDER | | | | (geographical, cultural and sociological) makes south |
| The former American ^president Bill Clinton observed | | | | partners more suited to provide satisfying products |
| 'globalisation is a fact not a policy option' This implies | | | | among themselves. For their needs are relatively the |
| globalisation is more than a mere creation of human | | | | same. Arthur Lewis (1977) stated that 'the LDCs |
| being rather the consequence of ever increasing | | | | have within themselves all that is required for growth. |
| contacts among individuals, peoples and communities. | | | | They have enough land to feed themselves, if they |
| The failure and collapse of the communist model and | | | | cultivate it properly. They are capable of learning the |
| its abandon by pioneers countries like China and | | | | skills of manufacturing and of saving the capital |
| Russia are evidences the liberal economic order was | | | | required for modernization.' |
| inevitable. | | | | REGIONAL INTEGRATION |
| The discussion over a need to reform the present | | | | A regional organisation could be defined as a grouping |
| economic order is as old as the deterioration of the | | | | of countries, in most cases neighbouring countries, |
| terms of trade. On the one hand LDCs, as a result of | | | | into an organisation in order to address a particular |
| an international division of labour dating from the | | | | issue: economic development; the management of |
| colonial experience produce goods in the form of raw | | | | their common resources such as lakes, rivers; the |
| materials. They have no control over operations like | | | | management of plagues with potential consequences |
| the transportation, transit and distribution of these | | | | beyond a country. Economic issues constituting the |
| resources, thus they can't determine the prices of | | | | main problem in almost all societies, it is also the main |
| these commodities. On the other hand developed | | | | stake of regional integration. In fact the world is |
| countries sell these products once manufactured with | | | | slashed into pieces of regional groupings with |
| such a high added value that there is an enormous | | | | membership overlapping at times owing to double |
| gap between the commodity sold by underdeveloped | | | | membership of certain members. However this |
| countries and the manufactured product sold to the | | | | enthusiasm toward integration can not hide the |
| same countries. Nearly half of third world countries | | | | relative and mitigated success of regional integration. |
| earn more than 50 percent of their exports revenue | | | | If excluded the European Union, ASEAN, NAFTA |
| from one single primary commodity, such as cocoa, | | | | regional integration has offered little compared to the |
| coffee or bananas. These countries are now confined | | | | fruits awaited. |
| in production structure of low value added activities. | | | | Jarle Moen distinguishes between |
| Not only are third world countries trapped to deal in a | | | | 'once-and-for-all-benefits and dynamic benefits of |
| single commodity, but they are also depending on a | | | | integration in third world countries. |
| few if not a single foreign market for supply of | | | | For many LDCs especially those with very small |
| manufactured products and trade of their primary | | | | domestic markets, regional economic integration may |
| commodities. | | | | offer a valuable experience, helping the transition to a |
| In Africa about 340 millions people that's half of the | | | | more balanced economic development and a more |
| continent population live on less than a US dollar a | | | | open economy. Within the integrated, both quality |
| day, the mortality rate of children under 5 is 140 per | | | | and marketing techniques can improve and promote |
| 1000, while life expectancy at birth is only 54 years. | | | | diversification and export production at a larger stage |
| Only 58 percent of the overall African population has | | | | without compelling these countries to face the |
| access to safe water. | | | | awkward effects of the liberalised market as the |
| As contained in NEPAD document 'Africa's place in | | | | tendency seems to be. Integration can also increase |
| the global community is defined by the fact that the | | | | the market size and, where economies of scale are |
| continent is an indispensable resource base that | | | | present, reduce the cost per unit. This could benefit |
| served humanity for so many centuries.' The | | | | both producers and customers in the integrated |
| underpinning theory of the current economic order is | | | | market. For customers, it makes it possible to |
| to large extent classical and neoclassical trade | | | | purchase goods at their real prices, since a |
| theories. According to them, all countries would gain in | | | | competition among more than one regional economic |
| participating in international trade. Free trade | | | | actor (producer or distributor) would have as a |
| maximises global output by permitting each country | | | | consequence the obligation to offer the best prices |
| to specialise in what it does best. According to the | | | | possible. Also in a larger market, partners outside the |
| IMF, outward oriented trade policies are conducive to | | | | integrated region would find it interesting for them to |
| faster growth for they promote competition, | | | | invest in such a region so as to take advantages of |
| encourage learning-by-doing, improve access to trade | | | | the discriminatory policies put in place to safeguard |
| opportunities and raise efficiency of resource | | | | the region's industries. According to Thomsen (1994) |
| allocation. In order not to miss this turning of history | | | | host country market size is one of the strongest |
| and thereby remain loser, Africa and other LDCs | | | | determinants of where foreign firms invest. One has |
| should undergo a deep reflection so as to gain | | | | to take into account the fact that an investment |
| advantages of globalisation. A challenge which can not | | | | from a developed country in a developing country is |
| be delayed or neglected in a context of high risk for | | | | accompanied by a substantial transfer of technology. |
| these countries to miss the few opportunities they | | | | Once achieved, regional integration will boost the |
| already had: the protection of recent inventions and | | | | members' countries bargaining power in the |
| the rush of multinational corporations in the LDCs | | | | international community. A power which can easily |
| markets of goods and services are evident dangers. | | | | increase with cartelisation. Countries belonging to a |
| The simple liberal approach to trade is not consistent | | | | regional organisation tend to present the same |
| with the historical experience of many developing | | | | features, for instance they could belong to the same |
| countries. First the theory of trade so applauded by | | | | climatic belt, central Africa for instance and southern |
| some is built on assumptions that are violated in most | | | | African countries. This geographic situation can enable |
| international markets. | | | | such countries to bargain with additional strength in |
| Much of world trade is in oligopolistic industries such | | | | what they produce best on which they could expect |
| as cars, chemicals, electronics and steel. The | | | | better returns on sales thereby reach a situation of |
| increasing importance of multinational corporations is a | | | | absolute gains. |
| clear indication that imperfect competition matters. | | | | REFERENCES |
| On this point Krugman(1987) states 'the insights of | | | | MOEN Jarle: Trade and Development: is South South |
| new models incorporating imperfect competition, | | | | Cooperation a Feasible Strategy? London School of |
| learning and economies of scale has reduced the | | | | Economics 1994 |
| doctrine of free trade from an optimal first best | | | | MYRDAL Gunmar: An International Economy, London: |
| strategy to a reasonable rule of thumb. | | | | Routledge and Kegan Paul |
| Our aim in conducting this analysis is to demonstrate | | | | TODARO Michael: Economics for a Developing World, |
| regional economic integration and a more effective | | | | New York: Longman 1992 |
| South-South cooperation among countries could | | | | KRUGMAN Paul 'Is Free Trade Passé? |
| enable third world countries to not fall prey into the | | | | |