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Globalisation has brought inequality, says Chissano

Globalisation has brought inequality, says Chissano
By Kabanda Chulu and Mutale Kapekele in Livingstone
Friday August 10, 2007 [04:00]

FORMER Mozambican President Joachim Chissano has observed that globalisation has brought growing inequality across and within nations. And Vice-President Rupiah Banda said despite the strong macroeconomic performance, African countries still faced a huge challenge of economic shocks as a result of globalisation.

Addressing the Chartered Institute of Management Accountants (CIMA) 2007 Southern Africa regional conference in Livingstone yesterday, Chissano said the majority of developing countries had continued to remain at the periphery of globalisation.

“Globalisation brings to developing countries risks, challenges but also opportunities such as greater access to developed countries’ markets and technology transfer, but it also brings growing inequality across and within nations. Another negative aspect of globalisation is that the majority of developing countries remain at its periphery and they are therefore failing to reap benefits while feeling the brunt of this powerful force,” Chissano said.

He said in the globalisation process Africa had suffered severely from the flight of human capital, which is commonly referred to as brain drain in poor countries and brain circulation in developed countries.

“Clearly the impact of globalisation is more felt on business and it is more visible in Southern Africa where the rather weak economic base featured by its countries makes them more dependant on extra-regional economies and thus more vulnerable to global shocks,” Chissano said. “And our inability to generate domestic savings forces our economies to rely on foreign capital flows for investment and our obsolete and less competitive technologies compel our countries to look for their pertinent replacement outside the region and our knowledge and business practices remain inadequate to the high speed the global economy is moving through.”

However, Chissano said that African economies could not move forward if they fail to take advantage of the opportunities offered by globalisation.

“I believe we can do it and we can put globalisation to the benefit of regional business and we can do it better under the following pre-conditions such as peace, stability and appropriate macro economic policies that simultaneously fulfill the role of promoting indigenous business and attract foreign investment,” said Chissano.

“But this must be compounded with strong political will to cooperate with one another and all of us must develop and defend a common agenda for development which goes beyond a mere economic growth.”

And Vice-President Banda said African countries have the huge challenge of remaining economically vigilant in the light of volatile oil prices and unpredictable weather.

“The main challenges we face are sustaining broad based economic growth and making further inroads in alleviating poverty reduction strategies.”

He said the economy of the continent could only improve by boosting macroeconomic activities and reducing the cost of doing business.

“This will entail persevering with macroeconomic stabilisation efforts, reducing the cost of doing business and continuing to address governance issues directly, including enhancing the legal framework and strengthening the transparency of natural resource management,” said Vice President Banda.

Labels: CIMA, GLOBALISATION, JOACHIM CHISANO, RUPIAH BANDA

posted by MrK @ 11:27 AM