Brics opens amid optimism

2013-03-26 00:00

THE fifth Brazil, Russia, India, China and South Africa (Brics) summit opens today amid optimism among leading South African economists that the gathering will focus on the establishment of a development bank and stimulate trade between the countries.

Andrew Layman, chief executive of the Durban Business Chamber of Commerce and Industry, said the development of mutually constructive relationships within a bloc like Brics was a progressive process.

However, some civil rights groups are pessimistic about what the conference can achieve because of human and civil rights violations in some of the member countries.

Layman said the Brics summits “require a great deal of discussion and negotiation in order to regularise trade conditions among the countries”. He added that the summit could announce the creation of a Brics development bank.

Such a bank would fund infrastructure development in the member countries and facilitate the exchange of their currencies.

Catherine Grant, an economist with the South African Institute of International Affairs, said the motivation for a development bank for Brics was that the Bretton Woods institutions — International Monetary Fund and the World Bank — were not meeting the needs of developing economies. However, the establishment of a development bank was a massive task that would not happen overnight.

“It will take years to raise funds and establish a mandate and identify the location of the bank,” she said. Together the Brics nations have $4,4 trillion (R40,9 trillion) in foreign reserves.

Simon Freemantle, a research analyst with Standard Bank, said the creation of a development bank was sure to feature strongly at the fifth summit, but he explained that it would not be a counterweight to institutions such as the World Bank.

“Yes, the dominance of the of the U.S. and Europe in Bretton Woods institutions is a source of contention for Brics. However, the bank will serve as an auxiliary funding institution which will be more aligned to Brics developmental agenda,” he added.

Brazil, Russia, India and China held their first summit in 2009 and invited South Africa to join them in December 2010.

The theme at this year’s summit is “Brics and Africa — partnerships for integration and industrialisation”.

Grant said a core issue that could be up for discussion would be the conflicts in Syria, Mali and the Central African Republic, where several South African National Defence Force soldiers were killed when rebels seized the capital, Bangui, on Sunday

The summit will focus largely on the ways in which the members can stimulate business.

Layman said at least one session, the business council, would be devoted to discussions among business representatives of each country.

But although the summit had created a lot of expectations, “it is unlikely to provide business opportunities itself”, he said. The value of the summit to local businesses would be realised later as the relationships among the five countries were cemented and enhanced.

“This is particularly important for south African companies because in economic terms SA is the junior partner and through Brics we will be gaining privileged access to over 40% of the world’s market,” said Layman.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.