Looking East: The Gulf as a new economic partner
Among strategies undertaken by some developing countries include looking East. This is more the case for some poor African countries that have hitherto depended much on the West in terms of aid, trade, investments, technology, culture and the like. Among the specific places to look at when looking East should be in the Middle East. Countries there include Saudi Arabia, Oman, Kuwait and Qatar.
‘Looking East’
The ‘Looking East’ phrase has been recently used in economics, business, politics and other areas to mean searching for alternative economic, business and even political alliances from the East instead of the West.
In economic and business sense, looking East is the option given to countries to diversify their sources of aid, trade and investments so as to depend not only on the West but also on the East.
The East has mainly been taken to include Asian countries while the West is typically composed of North America and Europe.
China and India Factor
China and India have been the main countries to look at when one looks East. This is due to the colossal sizes of these two Asian giants. The dragon economy of China and the incredible economy of India form part of essential global economic axis. The duo constitutes the Brics family of countries that include Brazil, Russia, India, China and South Africa.
The duo also forms the ‘Rising Asia’ and the ‘Southern Engines of Global Growth’. They have substantial global economic power. No wonder then that when countries and captains and titans of the industry look East they first see these two giants. Looking East should be more than looking at China and India.
The Gulf is Factor
The Gulf countries are potential and actual new sources of trade, investments and even aid for Africa and Tanzania for that matter.
This part of the Arab world seems to have huge sums of petrol-dollar looking for safe avenues for investments and trade.
Particularly, the Gulf would like to diversify away from oil-based economy to many other sectors in general and agriculture in particular.
Part of the Gulf’s strategies includes investing in Africa in general Tanzania included. Objectives for this include production of food for human and animal consumptions.
The Gulf-Africa Trade
The Gulf States are among the best potential and actual trade partners for Africa in general and Tanzania in particular. Trade ties between the two worlds go back to pre-modern day trade relations.
The two parts of the world have many goods and services that can be imported from and exported to each other.
Among the goods from Africa to the Gulf include agricultural and mineral products as well as many others from the extraction and natural resources based industries.
Goods from the Gulf are likely to be dominated by fuel in forms of petrol, diesel and related goods as well as manufactured industrial goods. Potential export of services to the Gulf from Africa in general and Tanzania in particular include tourism and manpower.
Aid From the Gulf
Traditional sources of aid for Africa in general and Tanzania in particular has been the West. When it has to be the East it has arguably been Japan, Korea, China and India mainly. Arguably, the Gulf does not feature as a substantial source of aid. Given growing wave and drive of partnership between the Gulf and Africa in general and Tanzania in particular, aid opportunities may unfold.
This seems to be the case when one looks at potentials offered by individual Gulf States and such organizations as the Gulf Cooperation Council, The Arab Fund, Kuwait Fund, Islamic Development Bank, the Gulf Research Centre and Saudi Fund for Development.
Ways forward for Tanzania
For Tanzania to actualize the existing opportunities and those that are unfolding from The Gulf there is a need to carefully, systematically and strategically map out and follow up these opportunities.
Among such opportunities are those related to industrialization which is among the key focus of the fifth phase government.
The academia has to give intellectual leadership in the matter by researching on specific Gulf investment, trade and aid opportunities as well as procedures and modus operandi to actualize them.
Tanzanian diplomats accredited to this part of the world have to engage economic diplomacy gears correctly to ensure that all potentials are optimized.
The author is professor of economics, a researcher, consultant and principal of Mzumbe University Dar es Salaam Business School.
