Missed opportunities
Trade grew in 2002, but the Middle East and Africa have largely missed out. Niveen Wahish looks at recently released World Trade Organisation figures
For over three years the global economy has been dealt one blow after another. A persistent slowdown was exacerbated by the events of 11 September and business confidence has been badly shaken in the wake of a number of corporate scandals.
However, according to the World Trade Organisations' (WTO) World Trade Figures 2002, trade still grew. A press release on the report shows that trade grew by 2.5 per cent in 2002, surpassing the 1.5 per cent growth of total world output. Yet trade growth in 2002 remained below the 1990s, which saw a 6.7 per cent growth per annum. The value of world merchandise exports rose by four per cent to $6.24 billion.
However, growth in trade has been uneven. According to the WTO, it has been strong in Asia and Eastern Europe. Trade remained stagnant in Western Europe and Japan and contracted in Latin America as a result of economic turmoil there. North America, particularly increased US imports, was cited by the press release as the largest single factor in the recovery of global trade last year. US imports account for one fifth of world trade, but in 2002 the increase in US imports was equivalent to one half of the global total.
Africa and the Middle East continued to play a marginal role, both in terms of affecting or being affected by this global trend. "Africa's output and trade in 2002 did not indicate a reversal of past trends with respect to incomes or participation in world trade," the press release said, adding that average per-capita income levels changed little and Africa's trade growth lagged behind the rest of the world. "Although various debt indicators improved and non-oil commodity prices recovered somewhat from 2001 levels, a broad-based expansion of output and trade has not yet occurred."
The value of African merchandise trade grew by only one per cent in 2002, reaching $139 billion. The value of trade grew by an average of three per cent from 1990-2000. Overall, the value of Africa's imports rose by one per cent, registering $133 billion compared with a two per cent rise the previous year.
The situation in the Middle East was not much better: the value of merchandise exports declined by two per cent, reaching $236 billion, compared with average growth rates of six per cent from 1990-2000. Imports, on the other hand, grew by two per cent to reach $183 billion. Growth rates in 2001 stood at four per cent.
The value of exports in services in the Middle East region dropped by four per cent, to $32 billion, due to a decline in the tourism sector. In Africa, the value of commercial services exports fell by six per cent.
While trade may have grown in 2002, the WTO said that, according to early indicators, "growth in trade volume for 2003 will be little or no better than 2002". It added that projections on the course of global output and trade depend strongly on the developments in the conflict in Iraq, "much depends on how political stability can be reestablished in Iraq and maintained throughout the region".
But it's not only the conflict in Iraq that may jeopordise trade growth in 2003. The continued sluggishness in the world economy and the possibility of a continuing spread of Severe Acute Respiratory Syndrome (SARS) are also important factors.
