Developing economies should invest in each other

by Dave

Successful LatAm companies and wealthy LatAm individuals would be reluctant to invest in Asia, given they are coming from a culltural framework of high uncertainty avoidance. Investing and doing business in tried and tested regions like the U.S. and Europe is preferred over the new.
Times LIVE

A preferential trade agreement (PTA) between the Southern Africa Customs Union (SACU) and India has been mooted for many years, but has yet to materialise. The India-Brazil-South Africa (IBSA) Trilateral has also been talking about an India-SACU-Mercosur (the Southern Common Market including Brazil) preferential trade agreement.

If the commercial relationship is to be truly leveraged, the agreement must be fast-tracked. With a consumer base of more than 1.6billion people, a PTA will redefine the trade corridor between South Asia, southern Africa and Latin America.

South African companies have not fully leveraged opportunities in infrastructure, energy, power generation and agro-processing in India. A case in point, India plans to invest $1.7-trillion in the next 10 years in infrastructure developments, yet no South African construction companies have been able to penetrate the Indian market.

BASIC countries (Brazil, South Africa, India, China), IBSA countries (India, Brazil, South Africa), and BRIC economies (Brazil, Russia, India and China) have rapidly clubbed together to advance the interests of the South. This, coupled with SA’s strategic positioning in the expanded G20, has resulted in government accelerating our strategic alignment with the South. This is clearly reflected in the new industrial policy action plan. However, business has not always followed suit.

South African companies are comfortable with doing business in traditional economies in the US and Western Europe, but are less comfortable with doing business in emerging economies.

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