Salient to Investors:
Fareed Zakaria said:
- Africa has become the great hope of the business world. The World Bank says Africa could be on the verge of a take-off the like of China’s 30 years ago.
- Populations are stagnating or declining in Europe, Japan and China, while Africa’s population of 1 billion is expected to more than double by 2050. Africa’s share of the world’s population will rise from one-seventh to about one-fifth by the middle of the century.
- African economies grew an average 6 percent in 2012, 3 times the US growth rate and faster than many Asian countries.
- The World Economic Forum’s Africa Competitive Report shows that 14 of the 20 least competitive economies in the world are African.
- African economies are over dependent on commodities – more than half of the continent’s total exports are minerals, which makes it vulnerable to fluctuations in global demand. Over 2/3 of Africa’s labor force is employed in agriculture. Manufacturing is essentially the same share of GDP as it was in the 1970s.
- The African Economic Outlook says a 1 percent drop in growth in the world’s rich countries translates into a 10 percent drop for Africa’s export earnings.
- In most African countries, economic and political reforms have stalled, corruption remains staggeringly high and the private sector remains much too tied to government favors.
- South Africa annual growth fell to less than 1 percent in the latest quarter, while youth unemployment hovers around 50 percent, a recipe for future crises.
Stephen Schwarzman at the Blackstone Group said:
- The West is uneven in producing jobs while China is producing 10 million jobs a year. With the burdens on governments in the West, people are going to become more and more unhappy just generally. As China becomes a focus as the US’ largest creditor there may be hostility between China and the rest of the world over decades, you could have major trade problems, major economic problems, and potentially military problems. Those problems are already occurring between China and Japan, between China and Europe on certain types of products.
- The US economic recovery is real – in housing, in auto. Business spending will increase, particularly as construction starts coming back., but it won’t be radical.
Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1306/30/fzgps.01.html