From left, President Dilma Rousseff of Brasil, Russian president Vladimir Putin, President Manmohan Singh of India, Chinese president Hu Jintao and SOuth Africa’s president Jacob Zuma of South Africa in Mexico in 2012.
(Image: 2013 Brics summit)
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The 2013 Brics summit, which takes place from 25 to 27 March in Durban, was the main topic of discussion at Frontier Advisory’s monthly seminar held at the Johannesburg Stock Exchange (JSE) on Thursday.
The objective of the Africa Frontiers Forum is to promote an understanding of the business environment in Africa and to raise strategic issues impacting on the continent.
The seminar is attended by leading figures from the realm of business and government who give their insights on a designated topic. It is also a platform for knowledge sharing and networking.
Chaired by Frontier Advisory CEO Martin Davies, the conversation at this month’s seminar was centred on the Brics nations and what member states can expect from the upcoming summit.
The Development Bank of Southern Africa’s (DBSA) regional manager for development planning, Dr Michele Ruiters, told forum attendees that the bank will hold a meeting on the sidelines of the Brics summit to discuss two main issues. The meeting will highlight collaboration on green economy issues, something that Brazil, India, Russia and China have shown interest in; and infrastructure delivery as infrastructure development is important in the Southern African Development Community (SADC) region.
The DBSA is the largest regional infrastructure bank within the SADC region and it invests 20% of its loan book in the region, according to Ruiters.
She further stipulated that the DBSA is a reference bank within Brics, meaning that it’s a member of a financial mechanism forum within the bloc that discusses all the financial issues that might arise in collaboration on the African continent.
Establishing a joint development bank
“Our main focus is on unblocking regional projects which is where the Brics could play a role, that is, around collaboration on co-financing and finding new ways of financing large infrastructure cross-border projects, specifically because we find that most of the blockages that exist around infrastructure delivery are those on the cross-border list,” explained Ruiters.
“This is because it’s much easier to fund country to country, but when there are three or more countries involved in a financial deal is more difficult.”
She added that setting up a Brics bank – a joint development bank – would cater for these cross-border infrastructure delivery projects.
A Brics bank, which will have a starting capital of US$50-billion (R443-billion), would pool resources from partners to unlock infrastructure delivery in Africa.
“What we’re hoping from the summit is that we solidify and formulate our collaboration even more,” Ruiters said.
Russian ambassador Mikhail Petrakov, however, told delegates that Brics should not be viewed merely in terms of concrete issues such as the development bank, but also as a collaboration on strategic political issues and as an opportunity to create a new world.
“But for the time being, Brics is obviously concentrated on the issues of the economy,” said Petrakov. “I presume that discussions at the summit this year will be around key international issues.”
He added that Russia was working hard with other Brics partners because the coalition is a priority and one of the country’s key foreign policies.
The Brics summit will concentrate on Africa and there will be outreach projects following the summit, he said. “By doing this kind of outreach we attract attention from outside to Brics and we can incorporate other regions in Africa.”
He drew attention to the fact that Brics is a young initiative, having only been around for five years, and it has taken a lot of effort to make the forum more structured.
Moving from a socialist philosophy to free markets
Mark Casey, head of the China-Africa Services Group and Deloitte’s technology, media and telecoms industry leader, who has travelled to the other four territories, said the Brics nations shared developmental goals and objectives.
Their ideologies and perspectives are similar, and they experience the same challenges, explained Casey.
“All territories in Brics are moving along an evolutionary continuum from a socialism philosophy to a free market one and I think that makes sense from the unique situation each country is in. I think all of them have a desire to accelerate progress towards that free market goal. Capital flow and investor confidence is high.”
The importance of Africa producing products and not just being mere suppliers was also discussed at the seminar.
“My biggest fear is that we’ve just been suppliers and not partners, and we hope that this is something that will change,” said Casey. “Africa needs to re-establish itself through partnerships and diversify its economy in the long term future.”
South Africa’s inclusion
South Africa was invited to join the Brics nations in December 2010 and Brand South Africa was involved in facilitating the process that led to the country being part of the coalition.
South Africa’s inclusion into Brics has been criticised with some saying Nigeria should have been included instead.
According to Brand South Africa’s research manager Petrus de Kock, the criticism is largely based on South Africa’s market size.
“We’ve got just over 50-million people and when you compare that to other Brics nations there is no comparison in terms of population size,” explained De Kock.
But he asserted that South Africa ranked higher than the other Brics nations in most of the categories of the World Bank’s Ease of Doing Business index.
“For me, one of the hopeful outcomes of the summit is business leadership, civil society and political leadership that come to the country to just have that direct exposure, and for Brand South Africa to take that opportunity to not only build our reputation but to actively build on previous experiences and mistakes,” said De Kock.
He added that it would be important for South Africa to share its multicultural experience with other Brics member states and he hopes that South Africa will play a much stronger role in the future of the organisation.
“The key outcome for me would be heightened awareness of each one of us, of who we are and what our societies look like, and a sense of the unique opportunities as well as challenges.”