Debate on Brics Durban Summit

DEBATE
Tues 19 March 2013
Cheryllyn Dudley MP - ACDP

Since South Africa's accession to the BRICS group of emerging powers in 2011, there has been sustained interest in South Africa's role in the grouping.

South Africa may be the small fish in the BRICS pond - compared to India or China - but BRICS represents rising powers from the different regions of the world and we do hold our own in Africa - although commentators say that ultimately the 'S' in BRICS should stand for SADC!

If we are able to align our region with our BRICS membership, it will represent a regional market of 273 million people, which gives greater credibility from a market size perspective and a far greater negotiating influence. With other nations being considered for membership, the acronym BRICS is expected to give way to 'E' for 'Emergent nations' and becoming the E6 or E8 – if this is so South Africa can only benefit from its early participation in the grouping.

Given that South Africa will be hosting the BRICS Summit next week in Durban, local players are hoping to see mining on the agenda as South Africa is a mining hub and this has not yet been prioritised even though all BRICS nations are heavily engaged in mining.
The ACDP would like to see BRICS discussion focusing on trade and investment barriers that inhibit business among participants - focusing on the barriers that matter and are relatively easy to deal with, such as visas and customs procedures etc.

BRICS needs to focus strongly on the facilitation of trade and use its leverage to cut trade and investment deals. We also think there is a need for BRICS partners to be raising awareness of opportunities in their respective business communities. Some of these countries are not renowned for operating business-friendly environments.
South Africa’s strength will depend on a team approach including government, the business community, think-tanks and civil society - the only way for South Africa to maximise the potential of BRICS. What we bring to the table as South Africa is however, the bottom line – if we do not bring finances and entrepreneurial skills we will not realise the potential there is for us in this BRICS partnership.
Economists warn that South Africa should not 'throw everything' into BRICS but continue to forge relationships elsewhere and in Africa.
BRICS is still very young and how it levers resources and opportunities will be watched closely - the proposed developmental bank which would finance infrastructure and sustainable-development projects across BRICS nations and other developing countries is an interesting example. The World Bank has welcomed the idea and is said to be looking for a strong working relationship - South African analysts caution that BRICS must ensure the bank is being established for the right reasons and not 'just to poke a finger in the World Bank's eye.
Private sector representatives, in the meantime, are hoping that BRICS might consider establishing a commercial bank, not only for development and infrastructure, but also for commercial projects - through which participants will be able to trade.
Lastly, the proposal to pool the foreign exchange reserves of the five BRICS member countries to support one another in times of balance of payments or currency crisis looks particularly interesting for South Africa. Brazil, Russia, India, China and South Africa collectively hold reserves of 4.5-trillion US dollars.