By Tamzin Hudson : Undoubtedly the world has entered a new phase far more complex and conflicted than might have been imagined. The signs that things were shaking up arrived in a ground-breaking report penned in 2001 by Jim O’Neill of Goldman Sachs entitled: “Dreaming with BRICs: the Path to 2050.” It was influential in the sense that it depicted the rise of a set of emerging economies, namely Brazil, Russia, India and China – countries whose economies and demographics suggested that they would emerge to rival traditional powers. The research indicated then that “India’s economy, for instance, could be larger than Japan’s by 2032, and China’s larger than the US by 2041 (and larger than everyone else as early as 2016). The BRICs economies taken together could be larger than the G6 by 2039.”
As this report suggested, it was becoming clear that the centre of economic activity was undergoing a seismic shift away from the traditional economic players. This shift has been global in its implications and has also been playing out in the context of Africa, which has been a focus of intense rivalry. In the case of India and China, particularly, the focus has been the vast natural resources that abound on the Continent. In a report titled: Brazil and China: Different Paths to Riches in Africa by J Neyman it was stated that: “In 2010, 89 percent of the imports from Africa to China were mineral products and metals.” The report further states that “According to the London-based Africa Research Institute, trade between China and Africa surged from approximately $10 billion in 2000, to more than $160 billion in 2011.” Other countries, notably Brazil have turned to Africa as a base for new operations for their multinationals and to seek out new markets.
All of this activity on the continent provides unique opportunities for South Africa, which is regarded as a gateway to Africa. In line with the increasing importance of the continent as a region of greatly improving fortunes it was at a meeting of BRICs Foreign Ministers in New York in September 2010 that it was agreed to invite South Africa to join the BRICs. South Africa also did its fair share of lobbying to be part of this select group of countries. China accordingly extended an invitation to the country to attend the third BRICs Summit. South Africa’s membership has not been without controversy. Analysts argue, however, that through leveraging South Africa’s advantages as a key player in its immediate region and beyond implies that the “S” in the BRICS acronym will come imply the Southern African Development Community (SADC) in time to come thereby providing access to a larger and increasingly vibrant market.
South Africa will play host to the Fifth BRICS Summit to be held in Durban from 25 to 27 March 2013 under the theme “BRICS and Africa – Partnerships for Development, Integration and Industrialisation”. South Africa’s hosting of the Summit stands as a singular success in terms of its overall foreign and economic policy and indications are that it stands to benefit greatly from its membership. This point has been clearly articulated by South Africa’s Minister of Trade and Industry. He argues that there are four priorities for South Africa in this Forum, firstly that the BRICS offers South Africa the opportunity to build dynamic economic linkages with leading emerging economies. Secondly, that South Africa seeks to engage in a meaningful dialogue with its BRICS partners that will lead to measures to increase the share of value-added products in its overall trade basket. The third objective is geared towards leveraging the BRICS to advance a “new paradigm” that will be aimed at supporting the growth, development and poverty alleviation agenda of the member countries through a sharing of development models and peer learning. Finally, to build mechanisms through dialogue and cooperation that advances “the economic development agenda of other developing countries and regions.”
South Africa’s hosting of the BRICS Summit provides an exclusive opportunity to promote the Africa Agenda aimed at promoting the integration of the continent and to spur on peace, security and socio-economic development, including a focus on industrialisation and infrastructure development. It is expected that this Summit will provide further impetus to discussions over mobilising the BRICS to join hands with South African companies to tap into the $480 billion that is required to address infrastructure gaps over the next decade.
Africa stands to be a major beneficiary of increasing cooperation with the BRICS. A recently published report by Standard Bank states that BRICS-Africa commercial ties are increasingly “vibrant” and “robust.” According to analysts at Standard Bank, Brics-Africa trade will increase threefold, from $150bn in 2010 to $530bn in 2015.
No doubt one of the big news items ahead of the Summit is the eagerly awaited report of the Finance Ministers that is expected to address the feasibility and viability of setting up a new BRICS-led Development Bank aimed at summoning funds for earmarked projects, including in infrastructure within the BRICS and other developing countries.
I will leave the last word to South Africa’s Finance Minister who stated in a news report that “The concept and the emerging reality of BRICS… as a geopolitical and economic grouping of nations introduces a new dynamic to global governance and economic relations.” He added that “the BRICS is now part of the vocabulary used to describe the shift in economic power southward and eastward.”
Finally, as the leaders of the BRICS nations stated in the Sanya Declaration, adopted at the April 2011 meeting in China which formally marked South Africa’s entry to the group:
“We share the view that the world is undergoing far-reaching, complex and profound changes, marked by the strengthening of multi-polarity, economic globalization and increasing interdependence.”