Africa Keywords: world economy and global crisis, foreign trade, investment, economic interests

We should not assume that only African energy-exporting countries managed to stay afloat in the crisis and re-entered the economic growth zone in a relatively short time.

Since the current crisis was essentially a "bubble bust" crisis, most exporters of real products, particularly minerals, have greatly benefited from the fact that terrified investors around the world, in search of more or less reliable investment objects, have switched from investing in high-yield and high-risk financial instruments to real assets.

This led to a rapid improvement in the situation in the countries of the continent that export metals, other types of mineral raw materials and agricultural products. By the fall of 2010, average dollar prices for non-energy commodities in current terms (i.e. excluding the inflation factor) reached the peak values of July 2008 on world markets. In real terms, however, they are still below the maximum peak values of two years ago, but the fall was short-lived, and now the prices of non-energy raw materials of African exporters are slowly but surely creeping up. In 2010, according to preliminary estimates, they increased by 35% for agricultural products.

The situation with metal prices is not so uniform. During 2010, prices for ferrous metal ores, although not very fast, grew steadily. They were supported by demand from the global steel industry. The situation is similar with copper prices. But aluminum raw materials are getting more expensive.

WITH METAL IN HIS VOICE

As the crisis fades, the voice of African exporters is increasingly heard in the global metal markets. Despite the serious weakening of the global market environment, Africa has maintained its leading role as a supplier of manganese, chromite, bauxite, gold, platinum, cobalt, vanadium, copper, uranium, antimony, beryllium, mercury, lithium, tantalum, and niobium ores to the world market. At the same time, as a result of the crisis, it somewhat lost its position as a global supplier of iron ore, titanium, nickel, bismuth, tin, and tungsten.

Without waiting for the end of the crisis, the mining giant TNK VNR Billiton, agreed to develop a large iron ore deposit in Liberia, promising to invest $3 billion in the project. The sites in Liberia are located near the 250-kilometer railway corridor from the border with Guinea to the coast of Liberia. Brazil's Vale, China's China Union, "Indo-European" ArcelorMittal and our Severstal are already operating in the industry. Liberia has signed contracts with mining companies worth $10 billion over the past ⁵ years1.

Russian Pipe Metallurgical Company (TMK), one of the world's largest producers of pipe products for the oil and gas industry and a leader in the Russian pipe industry

Ending. For the beginning, see: Asia and Africa Today, 2010, NN 8, 9 and 2011, N 1.

The article was prepared with the financial support of the Russian Foundation for Natural Sciences in the framework of the Project 09-02-00551a / r - "The role of human capital in shaping the image of a country in a multipolar world: a comparison of Russian and African realities".

It supplies products to 65 countries worldwide, and has established a subsidiary in the Republic of South Africa. TMK Africa Tubulars ' office is located in Cape Town, which is one of the largest business and logistics centers on the African continent. TMK's management believes that " TMK's presence in the Central and South African market will enable us to offer modern solutions in the delivery of high-quality pipe products and services to our customers in this crucial oil and gas production region."². The opening of the TMK subsidiary office in South Africa is an important step in the development of TMK's international retail network. The main objective of the new structure is to strengthen TMK's regional presence in sub-Saharan African markets, which have a high potential for the development of the oil and gas industry.

It is expected that after the crisis, there may be significant changes in the geography of supplies of non-ferrous, rare and rare earth metals mined in Africa. Europe's share of their exports from Africa has been falling steadily since pre-crisis times. The US reduced imports during the crisis. China, India and Southeast Asian countries, on the contrary, increased their share in African exports of these groups of goods.

Chinese analysts predict a significant increase in copper supplies from Zambia soon. Currently, the main importers of these products from this country are the United States and Japan, but the copper sector of both countries is in a systemic crisis, because the consumption of metal in them will gradually decrease with the transition to more modern materials. In addition, they are being squeezed by more efficient Asian manufacturers. At the same time, according to analysts of the Molybdenum Network of China, interest in copper in China will only grow from year to year, including due to purchases of metal in the state reserve. Zambia is an ideal candidate for the role of a major exporter of copper ore to China: the country has huge undeveloped reserves of raw materials - 900 million tons, which is 6% of the global total. At the same time, production costs are estimated to be extremely low3.

Since the fall of 2010, China has reduced the export of metals produced from these ores to Japan and the United States. Although many see this move as a tactical ploy in the context of protectionist post-crisis bargaining between the powers, it is quite possible that this move hides a longer-term trend towards shifting the focus to domestic consumption of these highly deficient metals by the renewed national industry of China. In this case, Africa's role as a source of raw materials, in addition to domestic sources, will only increase.

"THE HARD YEARS ARE PASSING...

The depreciation of reserve currencies during the crisis sharply raised the price of gold and precious stones. The crisis has brought back to life many African mines that have been unprofitable since the end of the last century due to a long period of low world gold prices. South Africa, which accounts for 47% of the world's yellow metal exports, has been the most successful country in this regard.

According to analysts, the price of gold against the background of increasing demand for it as an alternative for investment may reach $1,850 per ounce in early 2011. Records of quotations are associated not only with the crisis pursuit of reliable objects for investment, but also with an increase in the average cost of production of an ounce of gold to $1,000, an increase in consumption in China and an increase in imports of the yellow metal to India. The demand for gold in this country, the world's largest buyer, is quite high, despite the record value of the precious metal4.

It should be borne in mind that the increase in the price of gold is directly related to the speed of the dollar printing press of the US Federal Reserve. The looser Washington's monetary policy, the more unsecured greenbacks are stamped, the more precious metals become more expensive.

A number of countries, including Russia, China and the Philippines, have decided to build up their gold reserves in response to the crisis. The largest producer of the yellow metal, China, as of October 1, 2010, had gold reserves of 1.5% of the total volume of gold and foreign exchange reserves, which is less than the indicator of Russia (5.7%) and the Philippines (13.5%). However, these countries still have a much smaller share of gold reserves than the United States or Germany, where the share of the yellow metal in total reserves reaches 70%.

All this makes the prospects for the gold mining industry in Africa very favorable. Currently, Africa receives about $19 billion. annually from the production of gold and about $6 billion. - from diamond mining. During the crisis, international financial institutions could not leave such significant flows of value out of their sphere of attention.

In March 2010, it was announced that the IMF was launching a program that would provide technical assistance and training in Africa "to improve the control and regulation of diamond and precious metal production". The Fund has repeatedly expressed concerns about the growing " links between trade in precious raw materials and illegal financial flows, corruption, drug trafficking, arms smuggling and financial terrorism." The IMF will provide assistance to, among others, Burundi, the Central African Republic, the Democratic Republic of the Congo, Cote d'Ivoire, Mali and Togo. The program will be funded by the United Kingdom, France, Kuwait, Luxembourg, the Netherlands, Norway, Qatar, Saudi Arabia and Switzerland.

..OTHERS COME FOR THEM - THEY WILL ALSO BE DIFFICULT"

If at the end of the crisis in the global fossil fuel markets-

If the overall situation is favorable for Africa, the situation on the global food market is very worrying. Food prices are rising not only in Africa, but also around the world. By the beginning of November 2010, the food price index approached the maximum values of 2008. A certain contribution to the rise in world prices was made by abnormal heat and drought in Russia. Two years ago, at the beginning of the crisis, food prices jumped sharply due to the record high price of oil and a decrease in food reserves. In August 2010, global food prices increased by 5% compared to July. The embargo on grain exports imposed by the Russian authorities on August 5 also affected the African market, affecting Egypt the most. At the end of October 2010, the temporary ban on grain exports was extended by the Russian Federation until July ^{1, 2011.5}

At the same time, the current situation in the food sector, in our opinion, cannot be attributed entirely to the consequences of the crisis or drought and lack of food in Russia. Both, of course, contributed to the catastrophic deterioration of the situation in the second half of 2010.

However, it should also be recalled that in the seven years of the African boom (2000-2007)* agriculture was consistently underfunded, giving its potential share of financial resources to institutional reforms, priority construction of national financial systems, and projects for the development of trade and intermediary entrepreneurship. Agricultural infrastructure - road construction, irrigation, etc. - received crumbs. Those sectors that received funds turned away from agriculture. Within the financial sector, agricultural lending, marketing of industry products, financial, information, and technological services to the industry were not properly developed. As a result, the productivity of the agricultural sector is very low, as is the income of the villagers. The exceptions, perhaps, are Egypt and Morocco.

The land issue has become particularly acute in the last decade. Rapid population growth and intense land degradation on the continent have caused Africa, once known for its abundance of land, to enter a state of relative scarcity in a number of countries. The situation is aggravated by the growing environmental problems and sharp manifestations of global climate change on the continent.

In the long run, the food situation in Africa will remain acute until 2015, with possible outbreaks of mass hunger and malnutrition spreading. Some 40 million people are currently at risk of starvation in Africa.

In addition to the impact of the crisis, such fundamental factors in the context of Africa as natural disasters (droughts, floods, locusts, etc.) and military-political conflicts that cause refugee problems and local food crises will continue to have a negative impact. The still possible reduction of financial and food aid through international channels is likely to worsen the situation. First of all, this will affect countries with chronic budget and balance of payments deficits, which make up the vast majority of the Tropical Africa region.

Whether the emerging crisis in the United States will cause the "African holodomor" will be clear by about mid-2011. In any case, it is unlikely that African countries will meet the goals and objectives adopted by the UN in 2000. The Millennium Declaration on halving poverty and hunger by 2015

LESSONS FROM THE CRISIS FOR THE AFRICAN AND GLOBAL ECONOMY...

The crisis showed that although no country in the world was able to completely "isolate" itself from the global cataclysm, the degree of its impact on individual countries was very different. The countries of Africa were innocent victims of a crisis that was born through no fault of their own and beyond their borders. The traditionally subordinate and dependent position of African countries in the global economy has predetermined the degree of their vulnerability to external forces, which they can only influence to a very limited extent.

The impact of the economic disaster came to Africa mainly through the negative impact of global financial markets, international trade, weakened investment activity, and reduced transfers.

However, due to the lower integration into the" most globalized " segments of the world economy (interbank relations, intra-corporate production cooperation, technological exchange), the recession period and its depth in general were not so terrible for the countries of the continent. The entire period of GDP decline was limited to about 12-14 months on average in Africa. According to this indicator, only the figures of the most integrated countries in the world economy (including some oil and gas exporters), as well as the least developed countries, whose budgets are crucially dependent on the inflow of external aid, went into negative values for a relatively short period of time (1-2 quarters).

When looking at the situation from the perspective of international economic, monetary and financial relations, it is clear that during the crisis, those African countries that accumulated significant foreign exchange reserves, had positive balance of payments and budget deficits felt better.

In addition, those who had well-established and well-funded social programs and systems, and who were better able to regulate the financial system, fared better. That is, he did everything that was anathematized by free-market fundamentalists and neoliberalism.

The crisis marked the fiasco of the Washington Consensus. In a deep hole were precisely those who thoughtlessly took the path of deregulation," emancipation " of the markets. The liberalization of the latter has greatly facilitated the development of-

* For more information, see: Fituni L. L. Ekonomika Afrika: vyzovy postkrizisnogo razvitiya [African Economy: Challenges of Post-crisis Development].

The crisis is constantly moving across the planet, even entering the nooks and crannies of the African economy, which not so long ago almost did not fall under the influence of the global situation, lived their own lives and "boiled in their own juice".

The implications for some of the "unquestionable" tenets of economic theory were not talked about aloud either at the peak of the crisis or after. This is because they affect the inner sanctum not only of "Neolibs", "Neocons" and others like them, but also the more fundamental axioms of the market economy.

It turned out that unrestrained markets are not at all prone to self-leveling and adjustment. They are by no means more stable or more effective, as has been drummed into the heads of earthlings over the past 20 to 25 years. Contrary to the postulates of neoconservative and liberal economists, they failed to distribute risks and contain the growth of transaction costs. As noted by the Nobel Prize-winning economist J. R. R. Tolkien. Stiglitz in his speech "Post Financial Crisis: Options for Africa" on January 11, 2010, not all "market innovations" are for the better: innovative financial instruments have proved to be excessively risky. Moreover, the newly created "free" financial market has successfully prevented the renewal of precisely those segments that serve the public good - the formation of democratic electronic payment systems, transparent, cheap and reliable mortgages, an equally accessible system for trading government securities, etc.

Real life has shown that during the recession, countries that did not have independent central banks handled the crisis better than those in which central banks were legally independent. It also turned out that by focusing on managing inflation, economic and, above all, financial authorities failed, as the theory suggested, to effectively manage growth, unemployment, and financial sector stability. This implies only two possibilities: either the provisions of the imposed economic theory do not work, or the financial authorities of the countries that are guided by it are so inept and short-sighted that they manage to successfully counteract economic laws by their incompetence or malice.

Perhaps the most important lesson of the crisis is that it is the state (whose role in the economy has been repeatedly criticized, distorted, reviled and slandered in the recent past) that has taken on a key role in saving all economies without exception.

However, if it could have saved or at least kept dozens of national economies afloat, it probably could have prevented or greatly eased this crisis if it had not been excluded from many economic functions and if it had had more rights and levers of influence on the economy and finances at an earlier stage.

Perhaps some will challenge the validity of the latter conclusion in relation to mature, highly developed market economies. However, in the case of developing countries, this is absolutely true. Poor countries are not able to afford anti-crisis programs like Barack Obama or Angela Merkel. They don't have the cumulative power of the economies of China, Russia, or India. At the same time, the active economic intervention of the state for preventive purposes turned out to be fundamentally important and saving for both the giants and the pygmies of the world economy.

Not only for African countries, but also for the whole world, it is important to review approaches to assessing the correlation between the role of the market and the state in the post-crisis period. The consequences of this crisis will continue to be felt in various segments of the global economy for a long time to come. They may be compounded by the selfish desire of the leading developed countries to solve their own economic problems at the expense of others. It is this policy, rather than an abstract desire to redefine the world, that has led to world wars in the past.

...AND FOR RUSSIA

For the Russian side, the crisis has complicated work on a number of existing areas of cooperation with African countries, but at the same time it has opened up certain new horizons. It is necessary to pay more attention to the medium-term prospects of cooperation, possibly abandoning the pursuit of externally attractive "short-term goals". In fact, the only main task of interested domestic structures in the region so far should be to counteract its transformation into an effective alternative to Russian sources of raw materials and, even more likely, into an effective tool of blackmail and pressure on the Russian side. For this purpose, a system of measures for long-term and self-sustaining Russian presence and, most importantly, influence in the region should be developed. These measures should be based on the material and technical base of Russian property, the economic and technological links of African countries, companies, and personnel with Russia, and the personal contacts, connections, and interests of influential members of the African public.

In the subsequent and possibly not so distant stages of overcoming the consequences of the crisis and increasing industrial exports from Russia, economic cooperation with African countries can make a significant contribution to overcoming the raw material nature of the specialization of the Russian economy in the international division of labor.

* "Neocons" and" Neolibs " - a common abbreviation of the words "neoconservatives" and "neoliberals"in the media.

¹ http://www.infogeo.ru/metalls/news/?act=show&news=35475

² http://www.infogeo.ru/metalls/news/?act-show&news-35435

³ http://www.infogeo.ru/metalls/news/?aet=show&news=-35495

⁴ http://www.infogeo.ru/metalls/news/?act=show&news-36133

⁵ http://fintimes.km.ru/novosti/rost-tsen/12684; Rossiyskaya Gazeta, 25.10.2010.

Permanent link to this publication: