Economic solutions in Cameroon in the era of globalization

The end of the Second World War marked the beginning of a dramatic rise in world wealth measured in terms of value added. This global growth, particularly rapid during the period of the “thirty glorious” and even beyond, was accompanied by a more than proportional increase in trade between nations, thus giving substance, among other aspects, to the phenomenon described under the term “globalization”. The commercial form of globalization results both from the liberalization of global goods movements and the development of trade within economic solidarity spaces in different regions of the world. Indeed, in 2004, the weight of trade in world GDP exceeded 25% (Krugman and Obstfeld, 2006) 3.

However, this important level of trade in production seems to be unequally distributed across countries. Countries in sub-Saharan Africa are particularly marginalized in this increase in the volume of international trade. These accounted for only 2% of trade in 2005 according to the UNCTAD report. In 2003, the same report already noted the sub-Saharan countries’ sluggishness in world trade and explained this by the failures of diversification strategies through a considerable dependence of these countries on commodities. low value-added, whose price instability could hinder economic growth (Kom, 2009).

Thus, to avoid being out of the running in this global economic competition, Cameroon, like other developing countries, faces a daunting challenge: it needs to enhance its growth and reduce poverty in order to succeed. its integration into the global economy. This justifies, on the one hand, the implementation of strategies aimed at making Cameroon an emerging country by 2035. To increase its trade, Cameroon will have to increase substantially and sustainably growth rate of real GDP per capita, which will boost its degree of openness through imports. In this regard, Otrou (2007) demonstrates that there are several factors that can influence foreign trade, including population, GDP / capita, investment rate and many others.

Fontagné and Pajot (1998) show that foreign direct investment (FDI) has an impact on foreign trade and thus determines trade between countries. For example, Cameroon has embarked on policies aimed at attracting international capital flows and hence foreign direct investment (FDI). Indeed, as Alava (2006) demonstrates, if in the 1980s FDI was considered a threat to national sovereignty because multinational firms were suspected of reducing social welfare, today we are witnessing to a radical change in the attitude of developing countries which have adopted favorable policies in their policies.

Thus, the weakness of

local savings, the search for new non-debt generating sources of investment, the weak development of local financial markets, the limitation of access to international financial markets, the lack of technologies and skills etc. … are the reasons why developing countries are moving more and more towards FDI (Ajayi, 2006). Thus, foreign direct investment, assimilated to the foreign activity of multinational firms, is growing at a steady rate in all the economies of the world without exception. It affects all sectors of the economy: agriculture, industry, services.

FDI inflows have increased by a record 19 per cent in 1997, and again by 10 per cent in 1998 to about $ 440 billion (UNCTAD, 1998). According to UNCTAD (2001) 5, the share of developing countries in total FDI inflows increased from 26% in 1980 to 37% in 1997, and their share of total outflows from 3% in 1980 to 14%. in 1997. In 2010, 2011 and 2012, incoming FDI inflows to Cameroon (in USD million) were 538, 243 and 507 respectively (UNCTAD, 2013) 6.

Given that Cameroon has been receiving more and more FDI for a few decades, and that FDI has a considerable influence on foreign trade, it would be necessary to ask the following question: what is the impact of FDI on FDI? foreign trade in Cameroon? The literature on the influence of foreign direct investment on foreign trade is very broad and controversial. The theoretical work of Mundell (1957) 7 shows that FDI negatively influences foreign trade (substitution effect).