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Brics – Championing A New Paradigm For Economic Cooperation
Brics – Championing A New Paradigm For Economic Cooperation

Brics – Championing A New Paradigm For Economic Cooperation

Dr Rob Davies, MP

Minister of Trade and Industry

South Africa is preparing to host the Fifth BRICS Summit and the first meeting of BRICS Leaders on African soil in Durban on 27 March 2013. This historic event, convened under the theme “BRICS and Africa – Partnership for Development, Integration and Industrialisation”, will be preceded by a meeting of the BRICS Ministers of Trade and Economic Development on 26 March 2013.

South Africa’s membership of the BRICS Forum has become a vital element of our global economic strategy, and as the incoming BRICS Chair, South Africa will play a key role in shaping the agenda for economic cooperation.

There are four strategic considerations that anchor our participation in the BRICS Forum. First, in the current global economic environment, South Africa seeks to use the BRICS Forum to build stronger economic linkages with the world’s fastest growing and most dynamic economies. The IMF’s latest forecast for 2013 indicates that emerging market and developing economies will grow by 5.5% this year, compared to growth of 1.2% in advanced economies.

While South Africa’s economic links with established trading partners remain important, our prospects for growth and development will depend increasingly on diversifying and strengthening our economic links with these dynamic economies of the South and with Africa. The expansion of South Africa’s trade and direct investment with the countries of the South, notably the BRIC countries, continues and it is striking that the share of the BRIC countries in South Africa’s total trade almost doubled from 10% in 2005 to 18.6% in 2011.

Second, the BRICS Forum provides a platform to address some of the challenges arising from the rapid growth in intra-BRICS trade. A core concern for South Africa is the structure of trade, whereby our exports to China, India and Brazil continue to be dominated by low value-added products in exchange for manufactures. One of the priorities for our term as BRICS Chair is to coordinate a joint study to explore ways to promote more value-added exports that will support our industrial development objectives.

Third, there is an historic opportunity for the BRICS countries to champion a new paradigm for collaboration for more sustainable, equitable and mutually beneficial development. This should involve closer cooperation among the BRICS countries to support our growth, development and poverty objectives, building on our respective economic strengths and avoiding destructive competition. This may be achieved by identifying complementarities in key growth sectors and through a value chain approach, to cooperate to build the industrial capacities of our respective economies.

Finally, the BRICS Forum offers a unique opportunity for BRICS countries to extend and advance their cooperation in ways that meaningfully promote the economic development agenda of other developing countries and regions.

The BRICS countries are already deeply involved in Africa’s economic transformation process and their presence is growing significantly. This is reflected in rapidly growing trade and investment flows as well as economic cooperation activities across a range of sectors. We would want to advance an agenda in the BRICS Forum that will see BRICS countries enhance their cooperation and collaboration to provide more decisive impetus to Africa’s own strategies for inclusive and sustainable development.

Two years ago at the Sanya Summit, BRICS Leaders established the Contact Group on Economic and Trade Issues to develop and advance joint work programmes on a range of trade, investment and economic matters. The contact group, which meets in Pretoria this week at Senior Official level, will lay the basis for the Trade Ministers’ Meeting in March. It will focus on strengthening BRICS coordination in the multilateral arena notably in the World Trade Organisation, and advance cooperation on key aspects of intra-BRICS trade issues, SME development and investment policy and promotion.

South Africa will also articulate and promote the African economic development agenda as agreed by African Governments, particularly in respect of support to continental integration, infrastructure development and industrialisation. BRICS partners have already committed to support Africa’s infrastructure development and industrialisation and the eventual establishment of a BRICS-led Development Bank would signify meaningful progress in this respect.

Deepened cooperation between BRICS countries, the leading emerging economies in the world, and Africa with its much improved development prospects, abundant natural resources, growing consumer power and favourable demographics offer enormous potential for building Africa-BRICS economic cooperation on a sustainable and mutually beneficial basis over the next decades. This opportunity should be seized.

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