SA banking on Brics
Johannesburg: South Africa is hopeful that the proposed Brics development bank will be launched in the country when it hosts next year’s summit of the Brics countries. This was the view of the Minister of International Relations and Cooperation, Maite Nkoane-Mashabane, speaking at the Brics Colloquium hosted by the ANC’s Progressive Business Forum yesterday. The colloquium took place on the sidelines of the ANC policy conference which kicks off today in Midrand.
Nkoane-Mashabane said the proposed development bank was one of the most critical initiatives undertaken within the bloc of emerging economies (Brazil, Russia, India, China and South Africa). She said: “We are keenly watching the possibility that the Brics development bank will be born here in 2013.”
This was corroborated by Minister of Trade and Industry Rob Davies, who said we “hope a considerable amount of work will be done by next year when we host the summit”.
South Africa will host the summit only two years after joining the bloc. Nkoane-Mashabane said South Africans must move on with the debate and stop asking why the country was a member of the bloc. There was no doubt that South Africa was going to benefit from membership.
Nkoane-Mashabane characterised South Africa’s recent controversial decision to contribute $2bn (R17bn) into the International Monetary Fund (IMF) as part of a broader push to reform institutions of global governance. As part of the $75bn from the Brics bloc, the investment was contingent on the restructuring of influence in the IMF. “This pledge is in line with our objective of reforming institutions of global governance,” she said.
This would help emerging economies to join the main table when the direction of world affairs and solutions were discussed. “In the past we used to look to wise men from somewhere else to solve global problems. We used to be invited to the table only when tea and dessert were being served.”
This was coming to an end.
Nkoane-Mashabane urged South African business to take up opportunities emerging from the Brics formation and not to fret too much about squabbles as they were part and parcel of business realities. Referring to areas of potential dispute within Brics, like the spat over the alleged dumping of Brazilian chicken products in South Africa, she said the governments would deal with these issues.
Addressing the areas of potential dispute, Indian high commissioner in South Africa Virendra Gupta said it was not all hunky dory. He said there were fault lines but these would be addressed and did not overwhelm the benefits.
Business Unity South Africa’s (Busa’s) Nomaxabiso Majokweni, while praising the Brics initiative as a value-adding development, warned that members must address areas of constraints. “It is evident that the tectonic plates have moved and the balance of power is moving towards the Brics.”
She said Brics must not be motivated by geopolitical objectives but must translate into real economic objectives. She said the quality of trade between Brics members nations must improve towards valued-added products.
Majokweni said there were still issues and areas of constraint that needed to be addressed. There were still trade and investment barriers within the bloc that governments and businesses needed to address. These included tariff schedules and hidden taxes. There were also onerous labelling requirements.
She said there was a need to establish a structure to address these constraints. “We do not want to be sitting in another summit talking about the same constraints,” she said.