The BRICS grouping must strive for investment-led trade among one another, says South Africa’s Trade and Industry Minister Rob Davies.
This approach, according to the Minister, will stimulate economic development by promoting outward investment, trade, industrialisation, added value chains and infrastructure development.
Davies was briefing the media on Wednesday, in Sandton, on the work of the BRICS Business Council following its sixth annual meeting, which ended in Durban on Tuesday.
Making an example of Tuesday’s announcement by Chinese President Xi Jinping of the investment commitment to the tune of $14.7 billion in various sectors, Davies said South Africa needs more commitments of this nature from fellow BRICS members.
Such measures are steps towards establishing more balanced trade, instead of South Africa simply exporting raw materials, while importing finished manufactured goods.
“What we need to see is investment-led trade in BRICS, especially when we look at investment figures. What we saw yesterday with Chinese President Xi Jinping’s announcement of more than $14 billion investment in South Africa is more than welcomed because it will begin to change the picture…
“As a country, we invest more in other BRICS countries than [they invest in us].”
As things stand, intra-BRICS trade has increased from R203,850 trillion in 2010 to R462,356 trillion in 2017.
South Africa’s largest export destination within BRICS remains China, followed by India, Brazil and Russia. The trend is the same with imports, with China being the largest source of imports.
Business Council chairperson, Dr Iqbal Survé, echoed this sentiment, saying that the BRICS Business Council is currently looking at investments in South Africa with the “hope that meaningful projects will emerge”.
Survé said there is an appetite for favourable investment opportunities and this has been one of the core focus areas of the business council, whose role is to facilitate trade and investment among the BRICS counties and to build the bridge between business and investors.
Enhancing intra-BRICS trade
Davies also called for BRICS countries to enhance trade in a way that helps all five countries to weather the turbulence in the global trading system.
“We need to increase and enhance intra-BRICS cooperation. We need to enhance trade and cooperation in a way that focuses on complementariness.
“We are all countries trying to move up the value chain and industrialize, and prepare for the fourth industrial revolution.”
Davies acknowledged that there are areas where the BRICS members are directly competitive. However, he said, this should not overshadow the many areas of complementarity.
“All of us as BRICS countries agree that at the moment, we are now in economic times that need us to strengthen our cooperation. This moment is characterized by unilateralism and a move towards discriminatory mindsets applied to [some], and that has led to retaliation,” he said referring to the trade wars.
According to Davies, these trade wars have already had a detrimental effect on trade patterns. As such Pretoria has asked the US when it met with the Secretary of Commerce to reconsider steel tariffs.
“As BRCIS Trade Ministers, we did agree that we are in support of a rules-based trading system, and we do not believe that the system must be undermined or weakened…. There are many who have been affected as collateral damage [by the trade wars].”
BRICS has its work cut out
The council meeting set the pace for the 10th BRICS Summit, which is being hosted by South Africa under the theme “BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution”.
The meeting was attended by more than 450 representatives from the business communities of Brazil, Russia, India, China and South Africa, as well as representatives from strategic partners such as the New Development Bank.
President Cyril Ramaphosa’s special envoys also attended the meeting, which discussed new means to increase BRICS cooperation. Some of the mooted measures include the introduction of a BRICS rating agency, visa-free travelling as well as cooperation in new sectors such as the green economy and agriculture.
Survé said the BRICS Business Council “has completed its annual report and it's fairly comprehensive. It will be handed over to the five Heads of State tomorrow.” – SAnews.gov.za