|Follow us on:|
TBP (Durban, South Africa) – The Fifth BRICS Summit begins today at 17:30 GMT at the iNkosi Albert Luthuli International Convention Centre in Durban, South Africa.
More than 5,000 delegates – including the heads of state of Brazil, Russia, India, China, South Africa and 15 additional African countries – will gather in the coastal city for two days of policy meetings and signing agreements.
Economist Jim O’Neill, the chairman of Goldman Sachs Asset Management, coined the acronym ‘BRIC’ in 2001 to describe the four emerging markets that he forecast would equal the United States – the world’s largest economy – in output by 2020.
The four nations met for their first summit in Yekateringburg, Russia four years ago and invited South Africa to join the group in 2010.
In slightly over a decade the BRICS’ combined GDP has grown from approximately $3.0 trillion to more than $13.0 trillion, approximately one-fifth of global GDP. The five countries account for 42 per cent of the world’s population and contributed roughly $2.2 trillion in economic growth last year.
Focus on Africa
The theme of this year’s summit, which coincides with the 50th anniversary of the founding of the Organisation for African Unity, is “BRICS and Africa – Partnership for Development, Integration and Industrialisation.”
According to a recent report from Standard Bank, BRICS’ total trade with Africa reached $340 billion in 2012, a more than ten-fold increase over the past decade. The bank believes that trade will surpass the $500 billion mark by 2015.
But, note authors Simon Freemantle and Jeremy Stevens, “the BRICS act more as competitors than collaborators” in their approach to the continent at present. The two hope that this year’s summit will help to craft a collective agenda which delineates distinct areas of common interest.
“Deliberations in Durban will provide an opportunity to provide structure, leveraging key starting points for BRICS engagement, thus allowing deeper avenues for collaboration,” they said.
Their sentiments were echoed recently by South Africa’s minister for international relations and cooperation, Maite Nkoana-Mashabane. In a piece for The BRICS Age Magazine, Nkoana-Mashabane wrote that, “The summit will strive to concretise a number of projects aimed at enhancing economic sustainability among BRICS countries, Africa and the world.”
Analysts believe that education, healthcare, agriculture, development, resource management, urbanisation and infrastructure lead the list of areas in which tangible progress could be made through coordinated action.
These items are likely to feature prominently on the agenda when the heads of state of 15 African countries meet with South African President Jacob Zuma following the Summit for a retreat themed, “Unlocking Africa’s potential: BRICS and Africa Cooperation on Infrastructure”.
The keystone achievement of this year’s summit is expected to be the formation of a BRICS Development Bank, first proposed by India at last year’s gathering. Finance ministers from the five BRICS countries met today to discuss the results of their feasibility analysis.
At the conclusion of their meeting, South Africa’s finance minister, Pravin Gordhan announced, “It’s done.” The details of the bank’s structure, operations and focus will be left to the heads of government to announce during the Summit tomorrow, he said.
“The proposed BRICS bank is expected to operate as a conduit for funding economic development, much like the World Bank”, said Jeremy Stevens, Standard Bank’s Beijing-based economist.
“We believe the bank will focus on financing projects linked to intra-BRICS bilateral multipliers and shared interests such as job creation and urbanisation, with a particular emphasis on physical infrastructure projects,” Stevens said.
Mikhail Margelov, Russian President Vladimir Putin’s envoy to Africa said that the bank could start with $10 billion in seed money from each country.
“Better we start with something small and beautiful,” said Margelov.
The BRICS Development Bank is among several finance-related initiatives on the summit’s agenda. Two pacts covering a BRICS Multilateral Infrastructure Co-financing Agreement for Africa and a BRICS Multilateral Cooperation and Co-financing Agreement for Sustainable Development are also scheduled for ratification tomorrow.
Another agreement which may be signed seeks to unify trading platforms and time standards for the five nations’ stock exchanges.
The five bourses began cross-listing certain financial products one year ago this month, the first time five global exchanges cross-listed their most important equity indices, according to Edemir Pinto, CEO of Brazil’s BM & FBOVESPA exchange. The move was widely viewed at the time as an important first step in promoting greater integration among the rapidly expanding emerging market exchanges.
According to Margelov, the BRICS also plan to create a pool of reserves to provide financial support to the member countries in case of need. Brazilian finance minister Guido Mantega said in October of last year that the pool would be modeled on the Chang Mai Initiative for China, Japan, South Korea and 10 other Asian nations set up in the wake of the 1997 Asian financial crisis.
Business Council and Think Tank
Another high-profile new initiative at this year’s summit is the launch of the BRICS Business Council. The 25-member group, comprised of five business leaders from each of the BRICS countries, will serve as a platform for strengthening economic ties, trade and investment between the member economies.
Naina Lal Kidwai, President of the Federation of Indian Chambers of Commerce and Industry (FICCI) and leader of the Indian business delegation to the summit, believes that the Council will “go a long way in strengthening the engagement levels amongst business communities.”
“We pledge our complete support to this effort and will enthusiastically work with our friends to get this group going and ensure dedicated deliverables,” Kidwai told TBP.
Drawing out a roadmap to increase intra-BRICS trade to $500 billion by 2015 should be a key aim of the group, she said.
Mining magnate Patrice Motsepe, speaking at an African National Congress’ Progressive Business Forum seminar on Monday, expressed similar sentiments, but also offered some practical advice to businesses. “Focus on matchmaking,” he said.
The BRICS Business Council will join the newly formed BRICS Think-Tank Council which was announced earlier this month.
“One of the most important elements of BRICS cooperation should be in the sphere of knowledge production and academic cooperation,” said South Africa’s minister of higher education and training Blade Nzimande.
As with the BRICS Business Council, organisers envisage the think-tank grouping as more than just a forum for discussion.
“Scholars will be able to make contributions to government policies and related research projects, with the objective of immediate and tangible impacts on the strategic economic, social and geopolitical policies of the country,” Olive Shisana, chief executive of South Africa’s Human Sciences Research Council said.
The think-tank council includes the Institute for Applied Economic Research (JPEA) in Brazil, National Committee for BRICS Research (NRC/BRICS) in Russia, Observer Research Foundation in India, China Centre for Contemporary World Studies in China and Human Sciences Research Council (HSRC) in South Africa. The agreement for the think-tank was signed on 11 March 2013 but will be formally announced tomorrow.
At the close of the summit, the five BRICS leaders are expected to adopt the eThekwini Declaration and eThekwini Roadmap. eThekwini is the name of the municipality in which Durban is located.
According to Yuri Ushakov, a Putin aide, the Declaration will provide an overview of the BRICS’ “attitude to the current global politics and economics, as well as an insight into most urgent issues of multilateral cooperation.”
The Roadmap, he said, will provide details on the BRICS’ agenda for the year ahead and identify new areas in which bilateral partnerships are possible.
Matt Quigley for The BRICS Post