Bric gives SA firms a golden opportunity

2011-01-15 11:50

Local businesses will need help from the government to reap maximum benefit from the opportunities presented by South Africa becoming a member of Bric (Brazil, Russia, India and China), the bloc of rapidly developing economies, analysts say.

South Africa did trade valued at R177.5?billion with these countries in 2009. It exported less than it imported from Brazil and China.

Figures from the Industrial Development Corporation show that between January and October last year trade between South Africa and the bloc amounted to R162.5?billion.

South Africa imported R25.3?billion in goods more than it ­exported to the group.

“The government needs to come up with a trenchant strategy that will help the country reap the full rewards of joining Bric,” said Neren Rau, chief executive of the SA Chamber of Commerce and Industry.

He said South Africa should also identify sectors it would promote in the Bric countries.

India had a clear strategy of promoting its information and communications technology sector, Rau said, while China had strength in the manufacturing of textiles.

He advised South Africa, which is strong in mineral resources, to strive to become a beneficiation specialist.

South Africa is set to make its ­debut attendance at a Bric meeting in April after being invited by the ­economic power bloc last month.

The organisation will then change its name to “Brics” to accomodate the addition of South Africa.

Trade appears to be an area where South Africa can generate the most benefit, because laws regulating ­investment within Bric are not ­favourable to outside companies.

South Africa already has bilateral trade agreements with all the Bric countries.

Stef Coetzee, chief executive of the Afrikaanse Handelsinstituut, said joining Bric would make it easier for ­local businesses to gain access to ­global markets.

“Corporates should also maximise the benefits by networking with ­businesses in those countries and creating meaningful partnerships,” said Coetzee.

Businesses should plan carefully how they were going to exploit opportunities presented by the bloc.

He said the government should come up with strategic means to regulate its vulnerable industries: “I am not against an open market economy, but we should devise smart policies to protect certain industries.”

South Africa had gone overboard in opening up its industries, while other countries had smartly regulated their own, Coetzee said.

“If we get this right, more South ­African firms will become global players,” he said.

The Institute for Global Dialogue’s international relations analyst, Dr Siphamandla Zondi, said Bric offered South Africa the opportunity to accelerate its own development by linking it to the fastest-growing ­global economies.

“Just like after World War 2, when Japan and Korea grew significantly by falling under the umbrella of the US, South Africa could also use this opportunity to grow by association,” said Zondi.

He said all types of businesses should actively seek favourable market access to the Bric economies and create relationships between big and small business.

Zondi advised that South Africa could use the Bric platform to make its voice heard on how the global economy could recover from the ­recession.

“South Africa should try to strategically strengthen the bilateral relationship with the Bric countries and sharpen its economic and commercial diplomacy by seeking business for its business, or else the Brics ­relationship will not benefit us.”

Zondi said the Bric countries had a large consumption appetite and South African businesses could benefit from this.

“These countries consume anything from high industrial products to cheap goods, and South Africa has to take advantage of this,” he said.

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