The Scale of a Country’s Economic Potential as a Factor in Investment Allocation. The Case of Small Island States in Africa
The choice of partner countries for potential investment projects constitutes an important issue in the development of Russian-African cooperation. The article aims to answer the question of whether the small island states in the region (Mauritius, Seychelles, Cape Verde, Sao Tome and Principe, C...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Russian Academy of Sciences, Institute for African Studies
2023-09-01
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| Series: | Ученые записки Института Африки Российской академии наук |
| Subjects: | |
| Online Access: | https://africajournal.ru/wp-content/uploads/2023/10/Sugakov-Masshtabnost-Эkonomicheskogo-Potentsiala-Strany.pdf |
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| Summary: | The choice of partner countries for potential investment projects constitutes an
important issue in the development of Russian-African cooperation. The article aims to answer the
question of whether the small island states in the region (Mauritius, Seychelles, Cape Verde, Sao
Tome and Principe, Comoros, Guinea-Bissau) should be included in the list of investment priorities.
To this end, the author undertakes an analysis at three levels: global, regional and the national
(country) one. Accordingly, first, fundamental features of the global investment system are identified,
in the light of the Fituni-Abramova theory of the world economy’s subsystemic dichotomy. Second, the
author introduces the concept of «economic potential scale» and hypothesizes that it plays a more
important role in the allocation of foreign direct investment in Africa than in other regions of the
world. As the correlation analysis shows, the important role of economic potential scale is not only
characteristic of Africa, but also of other regions except Europe. According to the author, this is due
to the fact that in Europe the investment climate is more important, whereas in other regions,
including Africa, natural resource potential and other indicators related to economic potential scale
remain the important factor. Third and lastly, taking into account the global and regional patterns
discussed above, the author considers the potential for inclusion of the African small island states in
Russia's list of investment priorities. For this purpose, the author proposes a typology of these
countries based on the intensity of investment attraction: the «high-intensity – offshore», «highintensity
», and «low-intensity» types. The conclusion is that the countries belonging to the first two
types can be considered among Russia's priorities for investment in Africa. Despite their relatively
small economic potential, they have a number of competitive advantages, including those associated
with the ocean economy. |
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| ISSN: | 2412-5717 3034-3496 |