Total Pageviews

Sunday, March 23, 2014

DEVELOPING COUNTRIES 8: WHAT IS IN FOR NIGERIA





      Developing countries group of eight, more popularly known as D8, is a group that comprises the countries of Nigeria, Turkey, Pakistan, Indonesia, Bangladesh, Iran, Egypt, and Malaysia. The bloc came into being on June 15, 1997 in Istanbul Turkey, the idea of which came from the then president of Turkey Dr Necmettin Erbakan, in what is today commonly refers to as the Istanbul declaration. According to the website of the organisation 'the objective of D-8 organisation for economic cooperation are to improve member state's position in the global economy, diversify and create new opportunities in trade relations, enhance participation in decision-making at international level, and improve standards of living'. With a combine population of bout 1 Billion people which is about 13% of the total world population and combine global trade figure of $1.8 Trillion at the end of 2012 which is about 5% of the total global trade that year, the bloc is set to become one of the most important trading bloc in the world that transpass more than one region. Unlike trading unions such as European Union, ECOWAS, NAFTA, or COMESA, D-8 cut across regions of the world from Africa to Middle East, South Asia, to South East Asia. The bloc has set a target of $500 billion of trade between member countries by the year 2018 from the current figure of around $160 billion. 
      The much talk about MINTs economies that comprises of Mexico, Indonesia, Nigeria, and Turkey have three members of D-8 out of the four countries that made up the group. In the very recently concocted acronym of PINEs that include Philippines, Indonesia, Nigeria, and Ethiopia, two out of the four members of the group are from D-8 group. This further drive home the potential of the D-8 as the future mover of the global economy. If you look at the rate of economic growth in the individual members of this group you will see that Nigeria is making, 6.9; Turkey, 2.2%; Indonesia, 6.11; Malaysia,5.6%; Pakistan, 4%; Bangladesh, 6.7%; Iran, - ; and Egypt, - . The fact that they all form part of the most potential members of the high potential emerging economies in the world, with stable regimes in about 90% of them and prevailing peaceful atmosphere in about 80% of them making it the more likely for them to help shape the global economy in the near future. That is why it is very pertinent for Nigerian authorities to develop a good strategy to utilize this opportunity that promise a more positive outlook for Nigeria. Because it is not enough for Nigeria to be contented with its membership of regional economic bloc like ECOWAS or quasi economic bloc like AU; D-8 membership span four regions of the world with different geography and economic potentiality.



    The benefits that await Nigerian membership of D-8 is enormous, to start with all these countries have some few things in common, starting with population which ultimately determine the size of their domestic markets. The fact that their large populations compose of growing number of young people make the potentials of these economies more brighter, unlike say G-8 (sorry, G-7 without Russia). They are all fast growing economies as we have seen from their GDP grow rate earlier. Some of them have superb infrastructures such as Turkey, Malaysia, and to some extent Indonesia and Iran. Two of them are members of G-20, Turkey and Indonesia. Two of them are near the point of inclusion into the (so-called) status of a developed country, Turkey and Malaysia. Five of them are energy producers, Iran, Nigeria, Malaysia, Indonesia, and Egypt. Three are top tourist destinations Turkey, Malaysia, and Egypt. Two have world class education system that attract all sorts of students from around the world, Turkey and Malaysia. Two have a growing civil aviation industries that have the capability to produce commercial aeroplanes, Indonesia and Turkey. In term of manufacturing Turkey is far advance than any other D-8 member country, with an industry that produces electronics (for example, two of Turkish manufacturers -Vestel and BEKO major TV producers in Europe - supply most of Western Europe with domestic electronics). They have well grounded automobile manufacturing industry that supply neighboring regions with cars.
    Nigeria's big-time investors such as Dangote can size the opportunities provided by the higher emphasize the group has placed on private sector activities to exploit investment opportunities in the vast regions that made up the bloc. Already Turkish investors have sized the moment looking at the level of investments they are making in our country in sectors such as education, health, and transportation. One area that Nigeria should placed more emphasis on is the field of agriculture where Nigeria will have much to learn from countries such as Turkey, Indonesia, Pakistan and Malaysia. Mechanization and use of fertilizer in all these countries have reached an advanced stage. Fertilizer production and trade among member countries is already on the agenda of the group as meetings have already been hosted on its by the group, the last one being in Turkey last year. Dangote foray into the making of fertilizer with his investments of billion of Dollars will be comfortable with this D-8 emphasis on the sector. Nigeria's growing banking industry can make use of this opportunity to open shops in locations where Nigerians frequent such as Istanbul, Cairo, and Kuala Lumpur. In term of development of our financial industry, Nigeria has much to benefit from closer tie with Malaysia particularly in the area of Islamic banking and financing. 



        In terms of military and security, Nigeria has already started to cooperate with Pakistan on ways the two countries can share ideas and resources on how to deal with insurgencies bedeviling the two nations. Pakistan has longer experience in dealing with Taliban insurgence than Nigeria has with Boko Haram, though they are all very violent and deadly. But, as Nigerian military authorities have already found out Nigeria has much to learn from Pakistan in term of strategy to counter the insurgence. Pakistan is already a nuclear power with a rapidly growing weapons production industry that boost of local productions of military tanks, war planes, drones, etc. Nigeria should use this opportunity to revive it comatose defense industry base in Kaduna. This will substantially reduce Nigeria's usage of foreign exchange to procure military equipments which would henceforth be locally produced. This is a vast area, remember the country defense budget currently runs into over a trillion Naira.  By reducing the use of hard earn foreign exchange to buy weapons from abroad, a substantial amount of money will be freed for better used by other sectors of the economy such as education and health. Already the countries are looking at a proposal for setting up military textile industry by two countries in Nigeria; but this should not stop their, it should be extended to other areas such as Pharmaceuticals, agriculture, and energy supply.

No comments:

Post a Comment