South-south trade and FDI

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The Financial Time’s Quentin Peel after attending our recent Mumbai event:

The south is growing faster than the north. Southern companies are more competitive than their northern counterparts…

[The IFC] reckons south-south FDI flows rose from $15bn in 1995 to $46bn in 2003. The big numbers have tended to come from investments in natural resources, led by the drive of both China and India to acquire oil and gas reserves. But the most interesting dynamic is in manufacturing and services, including telecommunications and software. It is not a question of these companies being cheap, low-cost producers: they may have started out that way, but now they are developing their own technologies, knowledge and efficient management style as they invest abroad.

Though unfortunately:

The funny thing is that an awful lot of southern governments do not seem to have realised that they are winning the globalisation race. They are still hell-bent on discouraging the very trade and investment that would benefit their economies and their own home-grown companies. They had better wake up before the northerners haul up the drawbridge.

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