African nations and other emerging countries are expected to soon outperform the developed world, and South Africa wants to take advantage.
South Africa is planning to improve business dynamics within the Brazil, Russia, India, China and South Africa (Brics) club of emerging national economies, and also with other African nations, at the Brics’ first African summit in Durban next month.
“Emerging and developing economies are already playing an important role in the global economy,” said Michael Jordaan, the chief executive officer of South Africa’s First National Bank (FNB).
“The Chinese economy is already the second largest in the world, with a nominal GDP above seven trillion dollars, (and) growing at between seven and eight per cent,” he said. “There are also several emerging market economies that have GDP levels above one trillion dollars, including Brazil, Russia, India and Mexico.”
He added, “The outlook for advanced economies, in contrast, is mediocre, given that they are largely encumbered by high debt burdens,” said Mr Jordaan adding that there are opportunities at the summit for promoting some of the innovative banking products that South Africa has developed.
“For example, mobile cash and banking facilities, such as cell phone banking, have great potential in Africa and other developing countries — as this technology is most applicable in emerging markets,” he said. Preparations for the summit are accelerating: Russian Foreign Minister Sergey Lavrov recently travelled to Pretoria and met with Maite Nkoana-Mashabane, South Africa’s Minister of International Relations and Co-operation.
The two agreed that there are a number of important global issues in which the Brics should co-operate, such as pushing for reforms in the United Nations, the International Monetary Fund and other global institutions.
Their Chinese counterpart, Foreign Minister Yang Jiechi, is also slated to make a pre-summit trip to South Africa. Nkoana-Mashabane has praised the Chinese for their decisive role in gaining South Africa membership to the Brics club.
“I do believe that China’s key role in securing South Africa’s membership of the Brics was the correct initiative to create a nexus between Africa and the Brics,” she said. “South Africa is deeply grateful for the role that China has played in this regard,” she added.
When they attend the Durban summit, each of the Brics leaders will be accompanied by a sizeable business delegation — and a lot of work is taking place behind the scenes to ensure that there will be productive business dialogues.
A big challenge for South African President Jacob Zuma and the other leaders will be to make it easier for business leaders, like Mr Jordaan, to further shift their focus toward working with emerging nations.
Trade ministers from the five-nation club will hold a special joint session with business delegations from the member nations on the eve of the summit, and a permanent Brics Business Council is due to launch after the summit.
“This business council will be a more permanent mechanism for business interaction,” said Xavier Carim, deputy director general at the South African Department of Trade and Industry.
But there has been concern in South Africa that many members of business delegations, who have in the past accompanied Zuma to Brics gatherings, have been chosen because they are his close supporters, and not necessarily because their presence would help forge new business links.