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Finance & Innovation

Africa and Asia, together at last?

Suryanto

While the World Bank and the International Monetary Fund have summoned hordes of world leaders to Washington DC this week for its annual spring meetings, there’s another leadership summit taking place at the other end of the world, and it hasn’t been talked about as much.

The fact that not many people in the media are talking about the Asian-African Conference which is happening in Indonesia is surprising, considering that its member countries account for 75% of the world’s population, and high ranking ministers from over 70 countries are attending.

This is the sixth time that the Asia-Africa summit has been held, and it normally happens every ten years. The summit has an interesting history – the first time that the summit was held (1955), the Soviet Union and the United States were both pressuring countries in Africa and Asia to pick sides for the Cold War. That 1955 meeting helped the African and Asian nations to establish a common identity as emerging countries, resist the sales pitches of the USSR and USA, and generally keep out of the Cold War. This became known as the “Non-Aligned Movement”.

Fast forward to 2015, where, despite Russia’s activities in Ukraine, the Cold War is now history. The post-colonial era of Africa is also more a 20th century thing than a 21st century one. But there are lots of modern reasons why Asia and Africa want to meet and work together.

As mentioned, these two parts of the world represent 75% of the world’s population, and 28% of the global economy. Even more dramatically, trade between Africa and Asia has boomed in recent years, jumping from $2.8 billion in 1990, to $270 billion in 2012. These two continents are growing both in population and economy, so some of the most exciting trade deals in the world will be pondered at the lunch kiosk during this conference. It’s also a place where terrorism and climate change can be discussed amongst countries with a fair bit in common in terms of development.

But there are limitations. This grouping of African and Asian nations hasn’t yet achieved prime importance within their own countries, and no major deals have been struck in the first two days of the 2015 conference. The other issue is that what most African and Asian countries need is investment, and investment funds often come from North America and Europe, who aren’t at the conference.

A buzzword at this year’s conference has been “South-South” cooperation, which refers to two or more developing countries in the more southerly parts of the world providing aid, assistance, and trade to each other. The remaining three days of the conference will reveal whether these countries are ready to move beyond the talking stage, and cut some deals.