South Africa plans to boost links between Africa and its partners in the Brazil, Russia, India and China alliance at a landmark summit, which will be held in Durban in March 2013, Xavier Carim, deputy director general at the Department of Trade (DTI) and Industry, said. “The summit theme is Brics and Africa – a partnership for development, integration and industrialisation,” said Carim.
“We want to align our interests to support the integration agenda in Africa, not just to focus on access to resources,” explained Carim. “There have been suggestions that because South Africa is the smallest of the Brics’ nations in terms of population and GDP, it therefore may not deserve a place in this club of leading developing nations. “However, one answer to this criticism is that South Africa can offer its Brics partners better access to the mineral-rich African continent and hence plays not just a national role, but a continental one, in the Brics.”
The heads of government who will be attending the summit will be invited to a meeting immediately after the main event with the New Partnership for Africa’s Development (Nepad) steering committee. “This will be at presidential level and will help to link the Brics with Africa,” explained Carim.
Pretoria-based international affairs consultant John Maré welcomed the plan to boost relations between Africa and the Brics grouping at the Durban summit. “This is important. “In particular, it means South Africa is facilitating an Africa-China business dialogue,” said Maré . “It is important that business deals ensure there is no exploitation of Africa by the Chinese,” Maré told IPS.
He emphasised the importance of China in particular for Africa, suggesting that the Asian giant is the key member of the original Bric grouping from Africa’s perspective. “The Bric grouping invited South Africa to join, making it the Brics, as we are seen as the most suitable gateway to Africa,” he said.
“If there is this emphasis on Africa at the Durban summit, it will mean South Africa is playing the role everyone assumed we would play when we were invited to join.” Maré suggested that the Brics should seek a new dialogue with Africa along the lines of this continent’s existing one with the European Union (EU).
“The EU has a specific dialogue with Africa, through the African Union Secretariat,” he noted.
“This linkage between Nepad and the Brics could be a mirror image of that – and would give the Brics a relationship with Africa which neither the US nor Japan has.
“I am sure this Durban meeting will be the first of a regular dialogue.”
Johannesburg-based independent analyst Ian Cruickshanks also welcomed the prospect of South Africa facilitating a closer link between Africa and the Brics.
“I welcome any extension of South African influence in global economic and political groupings,” he told IPS.
“The Brics is seen as a new vibrant group with political and growing economic clout, access to capital, able to influence new fixed investment in Africa – which is the last frontier in exploitable energy and industrial commodity reserves.”
Cruickshanks noted that Africa only contributes about three percent of global GDP, with South Africa accounting for around one percent.
“But Africa has the potential to advance faster than the developed world, provided that there is better access to capital, and this could be tapped through the Brics industrial powerhouses,” he predicted.
He noted that South African resources are already significantly exploited, but questioned whether shale oil might provide new energy reserves, with the possibility of these reserves being developed through partnerships with Brics partners, with export potential to the rest of Africa.
“South Africa’s advanced financial sector could provide the basis of a gateway to Africa for the Brics, bringing a huge economic boost, and contributing to funding President Jacob Zuma’s promised R900bn in infrastructure development plans,” said Cruickshanks.
In another development, Carim said that there was work underway to try to anticipate and defuse trade friction within the Brics.
He gave examples of applications for South African anti-dumping duties against chicken imports from Brazil and against paper imports from China.
“These things do come up, and it’s inevitable when you see how our trade is growing,” he explained.
“The more you trade, the more friction – it’s a normal part of the relationship.”
However, he said that in dealing with Brics’ partners “we are looking at ways of taking the sting out of these matters, before they happen”. Carim insisted that companies which believe they are the victims of dumped goods – goods sold in a foreign market at lower prices than they are sold domestically, and which is believed to do damage to foreign rivals – do have the right to apply to their governments for protective measures.
He said that ways must also be explored to get a better balance in trade with South Africa’s Brics partners.
“When South Africa’s imports go up, there is an impact on our domestic industries,” he argued.
“There has to be some way to alleviate the pressures, to find outlets for our exports and to find ways to support our exports – such as wine to Brazil,” added Carim.
However, Carim said that the conditions are not yet ripe for a free trade area (FTA) among the Brics nations.
“No one is talking of a free trade area because with an FTA you open your markets, and you can lose sectors,” he explained.
“India is vulnerable with its agricultural sector, and if you look at manufactured goods, the Chinese are extremely competitive in this arena.
“Meanwhile, Brazil is extremely competitive in agriculture. “You run risks from a free-trade perspective.”
Carim emphasised that there is a lot of scope for the Brics nations to learn from one another, and gave the example of the ways in which Brazil has an effective development finance institution – from which South Africa’s Industrial Development Corporation can learn a lesson or a few.
“Meanwhile, the Chinese and Indians are good at developing industrial development zones – an area in which South Africa has yet to excel,” said Carim. “We should look at sharing experiences, rather than destructive competition,” Carim concluded.
The article was first published on 9 January 2013 by The New Age