Development bank all the talk

2013-03-27 00:00

TWO billion consumers.

That’s the lucrative market that South Africa’s Finance Minister Pravin Gordhan was gunning for while negotiating South Africa’s role in a future Brics development bank.

Gordhan told a foreign wire service yesterday morning that the bank was a done deal.

Interviewed later by The Witness, he fought back a smile when asked to confirm his earlier statement.

“I can say we’re on track, but let’s wait for the leaders to make the announcement tomorrow.”

Officials say the Brics are considering injecting an initial $50 billion into the new infrastructure bank. But the specifics of the scale, location and structure of the institution were still being thrashed out and Russia expressed cautious optimism over the venture.

“It’s a huge job with a lot of difficult issues to be agreed on.

“In principle, there is some progress,” Russian Deputy Finance Minister Sergei Anatolievich Storchak told Reuters.

Finance Minister Anton Siluanov said a decision on its location and funding was still needed, adding that further steps would be required before the bank could be created.

Talk of the bank, which will spearhead development in the member states, dominated issues leading up to the annual summit.

South Africa has been labelled by sceptics as the odd one out and Gordhan played his cards close to his chest when asked how negotiations went with his counterparts. “Very constructive,” he said.

Some of the details expected today include the location of the bank and the seed money needed for members to buy in.

Asked if he had conceded any ground to larger Brics partners, Gordhan said: “There was nothing to concede. My role was to make sure we get some results. We are equal partners within Brics and everybody will say, ‘but you’re a small economy’.

“But the fact of the matter is that the ‘S’ is a very established part of Brics now.

“Although small, we have lots of strength in the South African economy … we mustn’t keep shooting ourselves down and [must] use those strengths to work with our Brics partners.”

“The Brics formation is potentially a pool of over two billion consumers, so we have to explore opportunities for trade, explore opportunities for technological exchanges, learn from each other as to how we create better-paid consumers to increase demand overall, and learn how to work out how we are going to trade on a more even-handed basis with our bigger Brics partners.”

Gordhan also promised other announcements today “on the financial side”.

Away from the summit, KwaZulu-Natal Premier Zweli Mkhize said he would use the occasion to promote the province as a destination for foreign direct investment.

“As the undisputed gateway into the rest of Africa and other continents, we believe that we can use the province … not only for its own benefit, but for the benefit of other provinces, as well as countries, within the region.”

President Jacob Zuma, who hosted Chinese president Xi Jinping in Pretoria during the day, arrived at the meeting in the evening to welcome his Russian counterpart, Vladimir Putin.

The two swept into a cordoned-off area, hugged each other and shook hands for the waiting photographers before slipping into a meeting room.

Moments later there was a brief scuffle outside when a task force security member ejected a large Russian delegate.

For the most part, security was extremely tight, with delegates experiencing huge problems with the organisation of the summit.

There was no schedule of events, media had limited access to delegates and parts of the venue, Durban’s International Convention Centre, and many a visitor was heard grumbling about where to find basics like water.

Zuma closed off the evening with a banquet at the ICC.

Today begins with a breakfast attended by the five heads of state, followed by closed discussions and plenary sessions, culminating in the signing of several multilateral agreements.

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