Friday, August 23, 2013

AFRICAN ECONOMY....CHINA EXPLOITATION OR DEVELOPMENT

Whether it’s an economic development or a low cost productivity mechanism which is being exploited by China and Brazil in Africa only time will be to reveal the same. In my recent macroeconomic research I find that African countries are being the new targeted lands for agriculture productivity. China is pioneer in agriculture output infrastructure and brazil is pioneer in ethanol production. Both the countries have line up in Africa for the production of the same.My reason for exploitation takes birth from this that till date African economies are struggling to get a full day meal whereas the same country is being exploited by others

Brazil's More Food programme,is focusing on improving farmers' access to equipment, machinery and agricultural technologies, including tractors, through the provision of concessional credit. Ghana, Zimbabwe and Mozambique have been given credit and signed a technical co-operation agreement. At the other end we find that the involvement of agribusiness in Ghana, where for example, the Brazilian company Constran is building an ethanol plant, designated for export to Sweden, partly to get round European tariffs on Brazilian ethanol imports. So the $306m (£196m) project involves Brazilian technology and European investment in an African country.

On the other side the Gates foundation is spending $1bn on agriculture technology. Sino-African trade in agricultural products has grown quickly. From 2009 to 2012, China's agricultural exports to Africa grew from 1.58 billion U.S. dollars to 2.49 billion U.S. dollars, an increase of 57.6 percent. From 2009 to 2012, The benefit of these investments has lead to increase in grain supply to stupendous levels. For example Mozambique where 300 hectares of experimental paddy fields supported by Chinese investment yielded 9 tonnes to 10 tones per hectare for three successive years. Since 2006, China has helped set up 15 agricultural demonstration centers in Rwanda, the Republic of Congo, Mozambique and some other countries. Moreover the plans are much broader in these economies since china is taking the advantage of low manpower cost as well as developing the African societies. But the development is less and more of China.

Now Brazil gets into the same bandwagon to exploit the human resources and land cultivation levels of African economies. This is very clear from the raw data analysis which revel that From 2009 to 2012, China's agricultural exports to Africa grew from US$1.58 billion to US$2.49 billion, an increase of 57.6%. During the same period, China's agricultural imports from Africa grew from US$1.16 billion to US$2.86 billion, a 146% increase. China's direct investment in African agriculture grew from 30 million U.S. dollars to 82.47 million U.S. dollars, an increase of 175 percent. Well the prime reason is to take advantage of the cost benefit of the African economy. Resource exploitation is the traditional game of developed economies being deployed on emerging and poor nations. .

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