International Business: The New Realities, 5th Edition

Globalization and Africa

Africa is home to the poorest countries. The majority of its 1 billion people live on less than $5 a day. It is the area least integrated into the world economy and accounts for less than 5 percent of world trade. Although it has abundant natural resources, Africa remains underdeveloped due to many factors, including an inadequate commercial infrastructure, lack of access to foreign capital, high illiteracy, government corruption, wars, and the spread of AIDS.

Experience of the past half century suggests that traditional methods of trying to help Africa—mainly foreign aid provided by advanced economies—have achieved little success. Despite billions of dollars of aid to Africa, per-capita income is increasing relatively ...