Johannesburg, 17 November 2020. Strong multilateral relations between business communities in the BRICS alliance are growing in importance in a rapidly changing global economy. Awareness about the alliance should be increased in a period of increased economic and trade volatility.
Ms Busi Mabuza, the chairperson of the South African Chapter of the BRICS Business Council said it is quite clear that global cooperation and stability is critical to the recovery of global, regional, and national economies.
This was underscored at the recent virtual meeting of the BRICS Business Council hosted virtually by the city of St Petersburg in Russia. Representatives from the five countries in the alliance – Brazil, Russia, India, China and South Africa – attended sessions on wide ranging issues, including digital technology, sustainable development, global healthcare challenges, female entrepreneurship and the prospects for economic recovery post the Covid-19 pandemic.
“BRICS has become a recognisable multilateral brand of global governance,” said Ms Mabuza. “It represents nearly 42% of the world’s population and offers major potential markets for business from these states to build networks and enhance intra-BRICS trade and investment.”
Ways to go green
In a session on opportunities for sustainable development, delegates agreed on the need to reduce greenhouse gas emissions, stimulate economic recovery, and create new jobs.
The new economic development models that have emerged during the pandemic can be further scaled up with a strong focus on sustainable transport corridors, new and more efficient materials for building and construction and greater innovation to increase agricultural yields.
Recent advances in South Africa in the field of renewable energy uptakes were held up as best practices for other BRICS countries as exemplified by the successful implementation of the Renewable Energy Independent Power Procurement Programme – REIPPP. Plans to create a government-driven infrastructure fund were also welcomed.
Areas of cooperation within the BRICS alliance exist in fields such as the green economy, energy storage, electric transport, and solar thermal power. South Africa is regarded as the anchor market for renewable energy on the African continent and a key centre for the manufacturing of green technologies.
PPPs in the Covid-19 crisis
The Council called for greater trust between private and public sector entities to foster better collaboration and create an environment that supports more seamless contract enforcement and dispute resolution. The state should see itself more as a partner rather than a client or owner and its primary function is to ensure policy stability.
Delegates committed to cooperate in the development of digital infrastructure and services that can facilitate international industrial cooperation and reduce the impact of the distance factor, particularly in the transport and logistics sectors.
Ms Mabuza says South Africa is mainly a consumer of value-added services and there are considerable opportunities to strengthen its position in the thriving intermediary trade between BRICS countries.
Through a strengthened transport logistics capability South Africa can also emerge as a real global port hub through which other BRICS countries can access Sub-Saharan markets.
Responsible financing standards
The alliance partners are involved in initiatives to ensure financial markets adopt sustainable business models and a common approach is being developed among development finance institutions (DFIs) in the five countries.
A Memorandum of 8 Principles for Responsible Financing will be signed at the 2020 BRICS Summit held on 17 November. This will include guidelines and standards on environmental, social and governance issues and introduce benchmarking to measure and monitor accountability.
South Africa is a compelling proposition for foreign direct investment, says Ms Mabuza. Robust, sustainable investment standards are critical to attracting investments from entities beyond DFIs, such as asset management and retirement funds.
The recently created infrastructure fund intends to attract US$100bn in investment through the crowding in of international and private sector capital to achieve scale.
Agricultural biotechnology, food security and sustainability
Locally developed agricultural biotechnology compares very favourably with its BRICS partners. There is a healthy balance between plant and animal applications, and this is also evident in the increased competitiveness of the agricultural value chains and its ability to compete in global markets.
South Africa will greatly benefit from a biotechnology protocol between BRICS partners which will be signed in India in 2021. This will lead to greater cooperation in research and development, teaching and application.
Market access for trade in agricultural and food products remains a contentious issue and South Africa continues its efforts to get preferential access in especially China, India, and Russia.
Ms Mabuza said the country’s delegation strongly supported a proposal on enhanced trade made at the summit because “improved market access into BRICS partners is by far our number one ambition and priority.”
The BRICS Business Council was created in 2013 to strengthen and promote economic, business and trade ties among the business communities in the member countries. The St Petersburg summit was an important next step to strengthen relationships and identify immediate and innovative opportunities for future cooperation, says Ms Mabuza.
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