CNBC Africa sat down with Steve Forbes, chairman and editor-in-chief of Forbes Media, to draw some insight from his perspectives on the current global markets and how the US is faring.
Hot on the heels of that conversation was the relationship between China and the US. Forbes said that Chinese trade is essential to the US economy and influence of China cannot be denied. He cited American technology heavyweight, iPhone which is put together in China and then shipped back to the United States.
“The ties are enormous, the key thing is removing trade barriers in China, stopping the cyber- attacks and stealing intellectual property, those are issues not that two economies are so closely inter-meshed now.”
Forbes said on the backdrop of the current volatile global market, the US too is “sluggish”as reports have been good and bad. “It’s like a race car that can’t get off second gear. We are doing better than the rest of the world but that’s not saying much.”
According to Forbes, he illustrated that America is like a race car going at 50 kilometres per hour which is only winning because the rest of the world is going at 35 kilometres. “We all should be going faster,” he said.
In order to make a turn, Forbes posited that the federal reserve should stop mocking up the credit markets by allowing the real prices to grow. “The zero interest policy has made it very easy for government to borrow and big companies. But that combined with regulation is very difficult for small and new businesses, which are the big job creators.”
Forbes stated that the US foreign policy is moving towards isolation and turning its back on the world is not good for Africa. “Turning outward to the world means more trade, greater security which means more investment.”
It is no secret that Africa has enormous opportunity even beyond the commodity boom. Forbes said entrepreneurship in Africa needs more structures to build assets.
“Entrepreneurs don’t flourish and get the breakthroughs, there’s no lack of energy, it’s that up to now the political and economic structures in most countries [in Africa] weren’t hospitable to turning that energy into something wealth-creating.”
Forbes holds scrutiny of the International Monetary Fund (IMF) saying that, “they mostly give bad advice, economic malpractice.” With the disaster that was foreign aid on Africa, Forbes said the continent is more than capable of
He advises that if Africa “does right” on taxes and property rights, the continent will soon see a rise in the middle class.