Time to Forge Powerful New Economic Bloc
Versi, Anver, African Business
Despite ancient and intimate relations between Africa and the Arab world, the last three decades have seen a loosening of ties as each region has concentrated on its own priorities. Now, amid the rapidly changing global economic landscape, there is a very welcome reviving of ties and the establishment of stronger business relations. African Business editor Anver Versi reports from Abu Dhabi.
At a point in time when the global economic balance of power is in flux and the future is being shaped by dimly comprehensible forces, two conferences--both within a week of each other and both independently seeking stronger bonds between Africa and the Arab Gulf--could not have come at a more appropriate moment.
One conference, the Gulf-Africa Strategic Forum, organised by the Gulf Research Centre, took place in South Africa at the tail end of February; it was followed almost immediately, early in March, with a full-spectrum examination of Gulf-Africa relationships in Abu Dhabi, United Arab Emirates (UAE). This conference was organised by the Africa House of New York University (NYU) and the recently inaugurated NYU Abu Dhabi Institute.
Economics professor Yaw Nyarko, director of the Africa House at NYU, was the moving force behind the conference. He told me that during his numerous trips around Africa, including his homeland Ghana, the Gulf kept cropping up in conversation--either as a business destination, a shopping paradise, a stopover hub or a place where one's relatives and friends lived or worked.
"I realised that there was a surprising depth to the relationships between the Gulf and the various Africans of the continent. Given the fact that NYU was in the process of opening a sister institute in Abu Dhabi, it seemed natural that a comprehensive conference on these two regions should take place."
Coincidence or not, the timing could not be better. With the West in recession and commodity prices, including that of oil, on the floor, it was clear that both regions needed to start thinking outside the box. Even before the onset of the current economic crisis, exploratory feelers were already being sent out, mainly from the Gulf Cooperation Council (GCC) countries, into increasing the volume and direction of investment in the African continent.
The recession now gripping most of the world and the consequent collapse in the price of commodities, including oil, on which both regions are mainly dependent, has concentrated minds and brought the issue of reviving ancient ties between the two regions into sharp focus.
Sheikh Abdallah bin Zayed al Nahyan, the UAE Foreign Minister proposed a new 'special relations' framework when he said: "I believe that a new strategic partnership should focus beyond economy to an alignment of strategic interests and priorities between our two regions, as we strive to face the challenges of this century" at the South Africa conference.
This viewpoint was elaborated on at the NYU conference in Abu Dhabi. Abdullah Al Saleh, Director General of the UAE Ministry of Foreign Trade pointed out that trade between the UAE and Africa had increased 120% from 2006 to $8.4bn in 2008 and that FDI over the 2007-08 period had rocketed to $15bn. Nevertheless, trade between Africa and the Gulf constitutes only a very small percentage of both regions' total trade figures.
Seeking a mutually beneficial future
The UAE, Al Saleh said, was actively seeking investment opportunities in Africa, particularly in telecommunications, tourism, mining, real estate and finance. There are 300 Islamic finance institutions around the world handling over $8oobn, but astonishingly few in Africa, despite the fact that over half the population of Africa is Muslim. However, Al Saleh added, the two regions, once intimately connected in so many spheres, had drifted apart and it was essential for each to learn about the other. …