Avoiding past mistakes

During the last decade, soccer jerseys the country has been successful in restructuring debts. Coupled with attracting foreign investment, a steady economic growth in the area of five per cent was achieved during recent years.

It is important for Indonesia to avoid what Thailand did during the 1990s when the Thai government allowed too much foreign borrowing, fuelling an unprecedented property boom. The country was effectively bankrupt even before it let the national currency, the Thai baht, float, which triggered the Asian Financial Crisis.
In Africa, the global financial crisis appeared at first to have a less severe impact than in the developed world.

Historically, African economies were rather disconnected from the global economy, which was widely regarded as a disadvantage. This has now turned into an advantage, with the ripples of collapsing businesses all over the world not fully hitting Africa.

Between 2002 and 2007, Africa experienced an average growth of more than six per cent, partly due to the increased global demand in natural resources - historically unique for the continent.

With decreased commodity prices, falling demand for African exports and investments, the growth decreased. But there is no reason why the prices of commodities will not pick up again, at the latest by 2010, once the leading global economies have recovered.

Looking at China-Africa relations, the trade between the Asian giant and African continent has dropped by 30.3 per cent during the first six months of 2009 compared to the same period in 2008 – which can be attributed to the global financial crisis.

By comparison, global trade volume in the first half of 2009 is down by 12.2 per cent. During the same period, Chinese investment to Africa increased by 81 per cent.

Jean Ping, the chairman of the African Union (AU) Commission, underscored the value of the China-Africa partnership during a visit to China in early September: "As Africa is facing challenges like developing [its] economy and dealing with global issues, it eagerly wants to strengthen cooperation with China in various fields."

The African business plan - foreign investment in return for natural resources - may therefore turn into a success story.