‘World at crossroads’
President Cyril Ramaphosa’s address at the BRICS Business Forum, Sandton Convention Centre in Johannesburg yesterday
THE world is faced with “a choice between confrontation and co-operation… we are at a crossroad,” warned People’s Republic of China President Xi Jinping at the opening of the BRICS summit in Joburg yesterday.
“We need to build a shared future for humankind,” Xi said.
“Trade wars should be rejected. Economy hegemony should be rejected. Those who pursue that will only hurt themselves. As BRICS, we should be resolute in rejecting unilateralism and protectionism.”
Xi called on the developing world to rise against US protectionism, warning that the tariffs that the world’s biggest economy had imposed on imports would have far-reaching implications for emerging nations and markets.
The leitmotif of this BRICS Summit as articulated by its leaders is to embrace openness and inclusivity, and ensure people-centred growth.
The elephant in the room was the US, which has initiated trade wars with many of its traditional trading partners, causing consternation among the world’s emerging economies.
President Cyril Ramaphosa warned the BRICS countries about the challenges for developing countries emanating from the “rise in unilateral measures which are incompatible with World Trade Organisation rules”.
He told a packed audience with delegates from Brazil, Russia, India, China and South Africa: “We need to discuss the role of trade and inclusive growth.”
In light of the current volatile global environment, Ramaphosa hailed BRICS as an important and vital forum for co-operation after a successful decade of collaboration.
“We have successfully shaped an ambitious agenda, and our intra-BRICS co-operation is gaining momentum in the fields of finance, agriculture, trade, science and technology, health, education and security,” Ramaphosa told delegates.
“The New Development Bank (NDB) is one of BRICS’s most important achievements, which serves to fill a critical gap in development financing,” Ramaphosa said.
In just three years, the bank has issued $5.7 billion (R74.98bn) in loans to BRICS member countries, and intends on increasing that amount to $15bn in the next three years.
According to NDB vice-president Leslie Maasdorp, the bank plans to expand its mandate to lend to the private sector which is willing to take on long-term risk, in a move beyond the financing of state-owned enterprises with sovereign guarantees.
Ramaphosa also lauded the creation of the BRICS Business Council as an outstanding achievement.
Addressing the Business Forum, chairman of the BRICS Business Council Dr Iqbal Survé noted that the NDB is projected to give more loans to the BRICS countries over the next few years than the World Bank gave to them in 75 years.
Survé said the three achievements he hoped could be accomplished by the end of this week’s summit include a visa-free regime for bona fide business travellers, technology transfer between the BRICS countries for business and the creation of a BRICS rating agency.
According to Minister for Trade and Industry Rob Davies, who addressed the BRICS Business Forum: “South Africa is collateral damage in the current trade wars, as the international trading system is being rebalanced not in the interests of the majority, but in the interests of one party.”
Davies criticised the fact that the US is raising tariffs on steel and aluminium and that some countries are exempt while others are not.
“South Africa represents only 1% of US steel imports, but our representations to the Americans to exempt us from the tariffs were unsuccessful.” In what could be interpreted as a veiled threat, Davies highlighted the fact that interest groups in the South African poultry industry plan to launch a court challenge against the US poultry import concession, given the fact that South Africa’s benefits under the African Growth and Opportunity Act have been breached.
Davies summed up the general sentiment of delegates when he said: “This BRICS Summit will be a signal to the world that there is another part of the world that makes up 42% of the world’s population, and that it is significant.”
IT GIVES me great pleasure to welcome you to the BRICS Business Forum, which has become a vital platform for the development of economic co-operation between the BRICS member countries.
We welcome you to our shores just a week after the world marked the centenary of the birth of the Father of our Nation and a global icon, the late former president Nelson Rolihlahla Mandela.
We invoke his name here because the work we are here to do requires of us to build on the foundations Madiba laid for the advancement of democracy, world peace, human solidarity, international co-operation and mutual respect.
This year also marks a decade of BRICS collaboration, during which we have successfully shaped an ambitious agenda for development that recognises the great potential our countries possess for collective action.
Intra-BRICS co-operation has been gaining momenum in areas such as finance, agriculture, trade, combating transnational crime, science and technology, health, education, security and academic dialogue.
One of the most important achievements of the first decade of BRICS was the establishment of the New Development Bank, which fills a crucial gap in project funding.
Since its formation, the bank has disbursed loans totaling $5.1 billion (R67bn), with approvals amounting to $1.7bn this year alone.
As we enter the second decade of BRICS co-operation, we are determined to expand the bank’s role in economic and social development.
We are meeting here at a time when the multilateral trading system is facing unprecedented challenges.
We are concerned about the rise in unilateral measures that are incompatible with World Trade Organisation rules and are worried about the impact of these measures, especially on developing countries.
These developments call for thorough discussions on the role of trade in promoting sustainable development and inclusive growth.
The BRICS countries are increasingly recognised as an influential formation in reinforcing the principles of transparency, inclusiveness and compatibility within the multilateral trading system.
There is also much scope to expand the value of trade between BRICS countries.
As a country that is primarily an exporter of commodities to its BRICS partners, South Africa supports a shift towards complementary and valueadded trade.
Linked to the trade agenda, we need to increase investment between the BRICS countries, particularly in the productive sectors of our economy.
We also require a strategic road map regarding the opportunities presented by the 4th Industrial Revolution and the measures required to mitigate its disruptive effect on industry.
I am pleased that these are some of the areas under discussion at this business forum.
I look forward to concrete proposals made by yourselves for the consideration of the summit. Equally important are your deliberations on BRICS-Africa co-operation.
As South Africa, we are determined that our engagements within BRICS and other multilateral platforms should advance the integration and development of the African continent.
There is great potential for investment in Africa.
In the past decade, Africa has grown at a rate of 2 to 3 percentage points faster than the global GDP, with regional growth predicted to remain stable above 5% in 2018.
This growth will be supported by increasing foreign direct investment flows, public investment in infrastructure and higher agricultural production.
In addition to this, Africa’s working age population is expected to double to 1 billion in the next 25 years.
More opportunities are presented by the agreement to establish the African Continental Free Trade Area, which provides access to a market of over 1 billion people and a combined GDP of over $3 trillion.
The value of this free trade area will only be fully realised through massive investment in infrastructure and skills development.
This presents opportunities for our BRICS countries, some of which have extensive experience in infrastructure development and are world leaders in education and skills development.
This business forum provides a platform to harness the benefits of globalisation and also confront the challenges it presents, all within an ever-changing global political economy.
As South Africa, we have acknowledged that to effectively deal with poverty, unemployment and inequality, we need to significantly increase the level of investment in our economy to lift growth and create jobs.
We have embarked on an investment drive that has taken us to meet with investors in various parts of the world and which will culminate in an Investment Conference later in the year.
We are seeking to reinforce the strong bonds that we developed with our BRICS partners by expanding investment into our country.
And we are building on the vast investment potential that South Africa possesses.
Our partners in BRICS are familiar with our world-class transport and telecommunication infrastructure, a supportive operating environment and a sophisticated banking system.
We have been steadily improving the ease of doing business in the country, providing dedicated support to investors through Invest SA and developing an attractive package of incentives.
We are working to diversify our economy.
A wide range of investment opportunities are available in areas such as renewable energy, recycling, bio-fuels, water infrastructure, energy, mining and minerals beneficiation, agriculture and agri-processing, aquaculture, tourism, shipbuilding and repairs, business process outsourcing, advanced manufacturing, fuel cell production, aerospace and defence.
South Africa is determined to derive greater value from its abundant natural resources and steadily advance up the value chain into knowledge-based sectors.
We are embracing new technologies and approaches that are merging the physical, digital and biological worlds.
We are committed to walking this path together with our BRICS partners.
It is imperative that we collectively navigate the risks and leverage the opportunities that arise from the new digital age.
There is much we can do together to develop appropriate regulatory frameworks, infrastructure and skills support and enable the 4th Industrial Revolution.
Our task is to give practical expression to an economic partnership that will catapult the industrialisation of our respective economies beyond the digital age.
While trade among the BRICS partners has expanded exponentially over the past 10 years, we need to advance to a new level of industrial co-operation.
Addressing the demands of both the present and the future requires the same unity of purpose that brought BRICS into existence and which has sustained it over the past decade.
We look to you, our distinguished business community, to be at the centre of our collective efforts to forge a new economic path.
We look to you to be ready to realise the vast potential that exists for investment and trade, and to be our partners in building inclusive economies that create shared prosperity.
I wish you every success in your deliberations.