Collective BRICS' strength crucial factor in global economy: Zuma

The collective strength of BRICS is a crucial factor in the global economy, South African President Jacob Zuma said yesterday, calling for an increased support for the reform of international financial institutions.

“Africa has been excluded in all processes in the centuries that have come and passed. For the first time it is part of a serious grouping as represented by South Africa,” Zuma told reporters ahead of the 5th BRICS Summit starting in Durban today.

Zuma said that the collective strength of the BRICS is a crucial factor in the global economy which was evident from the fact that in 2012, BRICS economies served as a bulwark in the global economy, when most developed economies witnessed sharp slowdowns or negative growth.

The President said South Africa valued its membership of BRICS, which groups Brazil, Russia, India, China and South Africa, citing how it tied in with his country’s own developmental goals.

“BRICS fits in well with our National Development Plan objectives of raising employment through faster economic growth, improving the quality of education, skills development and innovation as well as building the capacity of the state to play a developmental, transformative role,” Zuma said.

“At a global level, we want to obtain increased support for the reform of International Financial Institutions, the revival of the Doha Development Agenda, as well as the reform of the United Nations, including the UNSC,” he said.

Importance of BRICS for South Africa

Zuma said the importance of BRICS for South Africa was best reflected in bilateral trade relations at a practical level, with China being South Africa’s biggest trading partner overall as well as first among the BRICS countries, and India in second place in this category.

“In 2012, South Africa’s total trade with the BRICS countries stood at 294 billion rand, which is 11 per cent higher than the 2011 figure of 264 billion rand,” he pointed out.

“Total trade with Brazil grew from 18 billion rand in 2011 to 20 billion rand in 2012, representing growth of 11 per cent. Total trade with Russia increased from three billion rand in 2011 to five billion rand in 2012, representing growth of 45 per cent,” Zuma said.

“Total trade with India, which is South Africa’s sixth largest trading partner, grew substantially from 53 billion rand in 2011 to 67 billion rand in 2012, representing growth of over 26 per cent,” he said.

“China ranks first among the BRICS partners and is South Africa’s largest bilateral trading partner, with total trade expanding from 188. 42 billion rand in 2011 to 201 billion rand in 2012, representing growth of 7 per cent,” he added.

BRICS Business Forum

Zuma said that to further expand economic relations, a BRICS Business Forum would take place parallel to the BRICS Summit today, focusing on infrastructure, energy, financial services, mining and beneficiation as well as agro-processing.

The Heads of State and Governments of the BRICS member countries would receive the recommendations of the BRICS Business Forum, which would also result in launch of the BRICS Business Council during the Summit.

Zuma also highlighted other activities at the Summit, including the proposed BRICS Trade and Risk Development Pool which will harness the collective and reinsurance capacity as well as facilitate intra-BRICS Trade and Investment.

Telecommunications discussions would focus on the envisaged BRICS Cable, a new high-capacity optic fibre cable of 28 400km, linking the BRICS countries.

“This will remove the dependency on developed countries as interconnection points, and will provide direct communications among BRICS countries,” Zuma said as he ended his address with comments on the much-speculated launch of the BRICS Development Bank.

“A major output for us will be the establishment of the BRICS Development Bank to assist in mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies. The BRICS Finance Ministers will present results of the feasibility study during the Summit,” Zuma said.

The BRICS Summit will be attended by President Dilma Rousseff of the Federative Republic of Brazil, President Vladimir Putin of the Russian Federation, recently-elected President Xi Jinping of the People’s Republic of China, and Prime Minister Manmohan Singh.