BRICS ‘a voice for emerging economies’

19 October 2012

The BRICS grouping of influential emerging economies is not a “closed shop” but an important voice for emerging economies and developing countries globally, South African Trade and Industry Minister Rob Davies told an experts’ meeting in Jakarta, Indonesia on Wednesday.

The theme of the meeting was “exploring Africa: mainstreaming Indonesia’s economic diplomacy in non-traditional markets”.

South Africa ‘looking to the South’

Davies said that while South Africa’s relations with its traditional trading partners remained important, the country’s prospects for growth would depend increasingly “on diversifying and strengthening our economic links with these dynamic economies of the South, including Indonesia, and with Africa.

“The expansion of South Africa’s trade and direct investment with the countries of the South, notably the BRIC countries, continues apace, with China and India at the forefront,” Davies said.

“Aggravated by the Eurozone crisis and demand contraction in Europe, the share of the European Union in South Africa’s total trade has declined from 36% in 2005 to 26.5% in 2011. By contrast, the share of the BRIC countries in South Africa’s total trade has increased from 10% in 2005 to 18.6% in 2011.”

Davies said the BRICS countries – Brazil, Russia, India, China and South Africa -had a shared interest in pushing for the reform of multilateral institutions for global governance, in order to give developing countries a bigger voice in these institutions.

“In particular, we have strengthened coordination in the World Trade Organisation’s Doha Round to defend and champion a development outcome, as well as in forums such as the G20 where trade and investment issues arise.”

Supporting Africa’s development agenda

Davies said South Africa had a direct interest in extending BRICS cooperation to support Africa’s development agenda, particularly by “increasing financial aid to build infrastructure and industrial capacity, and increasing imports of value-added manufactured products from the continent.

“The abundant natural resources of Africa, the growing consumer power of Africa’s emerging middle class, and high growth rates offer an opportunity to build a more sustainable and mutually beneficial relationship with Africa in the next decades.”

On Tuesday, Davies co-chaired the second meeting of the South Africa-Indonesia Joint Trade Committee, during which the two countries agreed to step up their interactions in order to increase trade.

Indonesia is the largest economy in South-east Asia, with gross domestic product (GDP) of around US$1-trillion.

According to the Department of Trade and Industry, trade between South Africa and Indonesia grew between 2007 and 2011, with SA ranking 23rd as a destination for Indonesian exports, and Indonesia ranking 26th for imports from SA.

South Africa’s exports to Indonesia “mainly consist of raw materials, and there is a need to diversify them to include value-added products,” the DTI said in a statement on Tuesday.

SAinfo reporter