10th BRICS Summit bolsters interaction and collaboration
South Africa wrapped up the 10th Brazil, Russia, India, China and South Africa (BRICS)
summit in Johannesburg in July with pledges to cooperate with its fellow member countries on a range of issues.
These include establishing a new training centre, vaccines research unit and second regional office for the BRICS Bank.
BRICS accounts for 40 percent of the world’s population and almost a fifth of the world’s economy. At this year’s annual summit – which was hosted by South Africa
– India and South Africa signed three agreements, namely: to build an artisan training centre, develop space technology and bolster skills in the agricultural sector.
The training centre, the Gandhi-Mandela Centre of Specialisation for Artisan Skills, will be a joint initiative between India and South Africa and will form part of South Africa’s technical and vocational educa- tion and training (TVET) system.
The agreement signed between the two countries allows, among other things, for the training of South African personnel in India and the training of facilitators by Indian experts in South Africa.
South Africa also signed an agreement with Russia on agricultural cooperation and water resource management. In addition, a number of other agreements were signed between BRICS officials during the summit. These include one to set up a second regional office of the New Development Bank (NDB) in São Paulo, Brazil, and an agreement by the respective BRICS banks to conduct research on using blockchain. Accords were also signed on a regional aviation partnership and to cooperate on trade in e-commerce.
At the summit, under the theme “BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the Fourth Industrial Revolution”, President Cyril Ramaphosa called upon BRICS countries to col- laborate with one another to better prepare for the changes that new technologies are expected to bring about.
In his opening speech at the Sandton Convention Centre, he stressed the need for governments to re-skill a significant portion of the workforce. To tackle this challenge, the BRICS ministers of industry agreed to set up an advisory group comprising policy-makers and experts from all of the BRICS countries.
In addition, officials agreed to es- tablish a BRICS networks of science parks, technology business incubators, and small and medium-sized enterprises. Ramaphosa said the creation at the summit of a BRICS Tourism Track will be key to fostering inclusive and sustainable development.
A PwC report released shortly before the summit revealed that while South Africa experienced a notable decline in Chinese tourist arrivals during 2017, the total number of tourists from BRICS countries increased by just over six percent, to 275 521 visitors. BRICS visitors account for about three percent of South Africa’s international tourist arrivals.
PwC estimates that these visitors spent about R3 billion in 2017 in South Africa and that every R1 million spent by tourists creates on average of eight jobs.
In addition, a BRICS Gender and Women’s Forum will be created to focus on boosting the socio-economic empowerment of women. Ramaphosa told the BRICS Business Forum, held at the summit, that cooperation among BRICS members has been gaining momentum in areas such as finance, agriculture, trade, combating transnational crime, science and technology, health, education, se- curity and academic dialogue.
He highlighted that one of the most important achievements of the first decade of BRICS was the establishment of the NDB, which fills a critical gap in project funding.
“Since its formation, the bank has disbursed loans totalling US$5.1 billion, with approvals amounting to US$1.7 billion this year alone,” he said.
Intra-BRICS trade has grown from $567 billion in 2010 to US$744 billion in 2017. South Africa-BRICS trade has grown from US$28 billion to US$35 billion over the same period. Despite this, a report by Deloitte released before the summit re- vealed that South Africa’s raw ma- terial exports have increased from about 34 percent to 70 percent of total exports to the group between 2001 and 2016.
At the same time, manufactured products as a share of South Af- rica’s exports dropped from about 41 percent to 24 percent, while the country continues to import mostly manufactured products from other BRICS countries.
South Africa’s top exports to China include metalliferous ores, and iron and steel, accounting for close to 60 percent. In 2016, coal accounted for more than half of India’s imports from South Africa, revealed the report.
Ramaphosa stressed however that South Africa wants to shift towards supplying its fellow BRICS countries with higher-end finished goods. South Africa also wants to increase investment between BRICS countries, particularly in manufacturing, he added.
In addition, South Africa wants to ensure that its own engagements within BRICS and other multilateral platforms advance the integration and development of Africa. In support of this, a number of African heads of state participated in the summit.
Underlining this, Ramaphosa highlighted Africa’s attractiveness to investors. He pointed out that in the past decade, Africa has outpaced the global economy’s growth by two to three percentage points. In addition to this, Africa’s working age population is expected to double to one billion in the next 24 years, he added.
The agreement to establish the African Continental Free Trade Area, which provides access to a market of over 1 billion people and a combined gross domestic product (GDP) of over US$3 trillion, presented a further opportunity for BRICS businesses. However, Ramaphosa pointed out that the value of this free trade area will only be fully realised through massive investment in infrastructure and skills development.
The respective heads of Jamaica (the Caribbean Community chair), Argentina (the current G20 chair) and Turkey (Organisation of the Islamic Conference chair) also at- tended the summit. Ramaphosa said the engagements between BRICS delegations and these leaders aimed to create a platform for greater interaction and partnerships among countries of the Global South. This would help create a united front for developing countries to push for changes in the world economy in areas such as trade and the governance of global institutions.
Ramaphosa also told the summit that his government has been steadily improving the ease of doing business in the country, providing dedicated support to investors through InvestSA and developing an attractive package of incentives.
He pointed out that a wide range of investment opportuni- ties are available in areas such as renewable energy, tourism, mining, fuel cell production and a number of other sectors.
At a banquet at the Sefako Makgatho Presidential Guesthouse in Pretoria on the eve of the summit to host China’s President Xi Jinping, Ramaphosa said his government has undertaken to use whatever opportunities possible to expand trade and investment prospects.
Recalling China’s support for the liberation movement during South Africa’s armed struggle, Ramaphosa said the past 20 years, since official relations were established between the two countries, has seen a “meeting of minds” on numerous issues.
He said Xi has indicated that China is ready to invest and work with South Africa in various sectors, such as infrastructure development, the ocean economy, the green economy, science and technology, agriculture, environment and finance.
During the visit he and Xi signed several agreements and memorandums of under- standing, including investment commitments to the value of US$14.7 billion. The contribution
will help Ramaphosa’s pledge to raise the level of investment by at least a US$100 billion over five years. The investment commitments include loans to Eskom and Transnet, a multi-currency facility accord signed by Naspers with the Bank of China, a US$983 million facility to Standard Bank by the Commercial Bank of China, as well as a US$3 billion financing and insurance agreement between Standard Bank and the China Export and Credit Guarantee Insurance Corporation.
China’s foreign direct investment, according to a Deloitte report released before the summit, has been the main driver of job creation since South Africa joined BRICS in 2011.
The country’s US$11 billion in investments in South Africa from 2011 (when South Africa joined the bloc) to 2017 created almost 15 000 jobs in South Africa. This is almost double the nearly 8 000 jobs from Chinese investment valued at US$1 billion in South Africa between 2003 and 2010. South Africa will remain chair of BRICS until 31 December. Brazil will then take over. Next year’s BRICS summit will held in Brazil.