Consequently there is the expectation that aid flows

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Frot, 2009). Consequently, there is the expectation that aid flows from traditional donors to Africa will either decrease or increase marginally. Traditional donors such as France, Ireland and Italy have already announced plans to cut aid budgets (Mold et al., 2009). With diminished prospects for funding by traditional donors, a decrease in Southern support is likely to have serious consequences for growth and poverty reduction in the region.
South-South Cooperation: Africa and the New Forms of Development Partnership7171A major channel through which a decrease in funding by traditional donors could potentially affect Southern support is through its impact on triangular cooperation activities. In recent years, some traditional donors have entered into collaborative arrangements with Southern partners to implement projects in recipient countries — a phenomenon referred to as “triangular cooperation” (UNDP, 2009). The projects are either co-financed by the traditional donors and Southern partners or are financed by the former with the latter providing human resources and technical assistance. Brazil is the main Southern partner operating in Africa that is actively involved in these collaborative arrangements with traditional donors. To the extent that the financial crisis leads to a reduction in traditional donors’ participation in these activities, it would reduce funding for these activities.Another channel through which the crisis is expected to have a potentially negative effect on Southern support is through its impact on economic growth. Since the onset of the crisis, there have been downward revisions of growth forecasts for emerging economies, with dire consequences for their capacity as well as willingness to scale up official flows to other developing countries. In 2009, four of the eight key Southern partners to Africa had negative growth rates as a result of the crisis (table 12). Although China and India had positive growth rates, they were much lower than their average in the past five years. To the extent that Southern partners respond to the crisis by focusing more on domestic economic issues rather than external relations, there will be a substantial decline in support to Africa in the near to medium term. Recent developments suggest, however, that they may not respond to the crisis in this Table 12The financial crisis and the growth of Southern economies 200720092010China13.08.710.0India9.45.78.8Saudi Arabia2.00.13.7Kuwait 2.5-2.73.1United Arab Emirates6.1-0.71.3Republic of Korea5.10.24.5Turkey4.7-4.75.2Brazil6.1-0.25.5Source: IMF (2010).
Economic Development in Africa Report 201072manner. For example, since the onset of the crisis, China has stepped up rather than reduced its economic engagement in African countries. In particular, it has promised to increase support to Africa. Brazil, India and the Republic of Korea have also signalled their intention to provide more support to the region in the coming years.

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