Sep 25, 2012

South Korea - Africa ― the frontier for Asian trade

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I have always believed that the first person who reaches the top of the mountain rules the world, the early bird concept, some would say.

Being from Thailand, I was also perplexed by the fact that an airline in ASEAN, Malaysian Airlines, to be exact, used to fly to Latin America (Buenos Aires) and Africa (Johannesburg). Korean Air flies to Nairobi, among other destinations. I believe that the farther we go, the more markets we discover, and the more markets we discover, the more trade opportunities abound.

But when you talk about Africa in most of Asia, most likely you would find a sense of uncertainty. The knowledge and familiarity with Africa is still not there, not only for Thai or Singaporean business persons, but for those from the entire region. An Africa session would not sell like pancakes, say, in an investment fair held in Bangkok or Hanoi, compared to showcases of investment in other regions.

The fact of the matter is that Africa’s economic growth makes it one of the fastest growing regions in the world. This fact is practically unknown. There are today great trade and investment opportunities for Asia to invest in Africa’s emerging markets, such as those of Nigeria, Ghana, Botswana, Mauritius, South Africa and Mozambique. These opportunities include investment in sovereign wealth funds and other financial investments. As we speak, business persons from Asia and Africa are tapping into each other’s “hot sectors,” from telecoms and financial services, oil and gas, agriculture, and mineral assets to physical and social infrastructure.

The Africa story is gaining momentum, and there is opportunity for greater collaboration with countries of Asia individually and as a region. Of course, there is the need to address fundamental issues of poverty, labor and urbanization, as well as some of the most pertinent investment issues for new corporations looking to invest on the continent and for those African companies looking to raise funds in Asia.

At the same time, structural transformation and sustainable development of Africa are needed to ensure the most appropriate resource use and productivity, as well as environmental sustainability and green growth. The "new development path” of Africa will ensure sustainability of natural resources and agricultural productivity, and work to mend the trend of deindustrialization, and this is with the backdrop of a young and growing population.

Economically, Asia and Africa still have much room to work closely as partners for sustainable growth and development. The two regions must learn to rely on each other and reinforce both intra- and inter-regional trade. There is indeed an Asian-African nexus, and Asia should be ready to help Africa develop its growth strategies to achieve the objective of sustainable development.

But who would that be from Asia? Of course, the first person to reach the top of Kilimanjaro and remains there would literally be on top.

Korean, Indonesian and Malaysian companies have invested hundreds of millions of U.S. dollars in Africa. I also hope that ASEAN countries, a part of one market in less than two and a half years from now, would follow suit, and eventually expand investment to Africa for stronger economic ties in a continent of great potential.

In 1950, South Korea was as poor as Ghana and Kenya. In the coming decades, I hope that these African countries will mirror the economic success of South Korea and many ASEAN countries.

Natapanu Nopakun



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