SOUTH Africa will welcome heads of state from the BRICS countries in Johannesburg in late July for their 10th summit. In 2001, Goldman Sachs chief economist Jim O’Neill said the emerging economies of the BRICS countries - Brazil, Russia, India and China (South Africa joined in 2010) - would be powerhouses that lead global economic growth. More recently, however, doubts have been raised about the vitality of the BRICS economies.
But a look at the facts should help clear away these doubts.
Amid countless multilateral mechanisms, BRICS doesn’t boast a long history. But it stands out for two reasons. First, its small number of members represents the vast expanse of the world’s emerging economies, along with 42% of the world’s population and over 25% of its landmass.
South Africa, as the second largest economy in Africa, is the sole representation of the continent in BRICS. Each member is unique in its own way, together building a highly complementary model of co-operation.
Second, it stands out for its collective economic performance.
The rate of economic growth in the bloc has far outpaced the world’s average - and the expectations of many. Jeremy Stevens, an economist with South African Standard Bank, said at a BRICS economic forum in Beijing in 2014 that from 2008 to 2017 the world’s average growth rate would be around 1%, while that of BRICS nations was expected to reach 8%.
This optimism has been bolstered by statistics released by China’s Ministry of Commerce. These show that over the past 10 years the BRICS increased their share of aggregate global economic value from 12 to 23%. Their trade volume rose from 11 to 16% of the world’s total. And outbound investment jumped from 7 to 12%, contributing half of the world’s growth.
The vigour of the BRICS economies is evident in the increasing activity of the BRICS New Development Bank. The bank was set up in 2014 to fund development projects in member states.
The chief of the New Development Bank, K V Kamath, announced in May that the bank has approved projects worth $1.7billion, while the target for the whole year stands at $4bn to $4.5bn. That is on top of the $3.4bn in projects approved by the bank since its inception.
Two-thirds of the investment has gone into environmental restoration, water supply systems, irrigation and other projects that support sustainable development.
The bank has also invested in hi-tech projects developing artificial intelligence, blockchain technology, and 5G communications networks to improve member countries’ competitiveness.
And the BRICS group has even bigger dreams. Last year, the BRICS heads of state met in China’s port city Xiamen and mapped out a blueprint to expand co-operation in global governance, international peace and security, and people-to-people exchanges.
There are also plans to build the New Development Bank into a global financial institution.
Non-BRICS countries will be able to apply for membership of the bank starting in 2021. And it is set to have a bigger role in global governance.
For example, the bank intends to establish its own credit ratings agency that will serve the needs of the global south and other emerging economies.
The BRICS countries are braced to do more, particularly for the development of Africa, as South Africa steps into the organisation’s rotating chair and hosts the 10th summit. Building on the BRICS decade-old success story, the summit is destined to be another milestone on the journey of intensive development.
A new push for investment and inclusive economic growth will be high on the agenda of the Johannesburg summit, with the aim of advancing South Africa’s national interests and the African Union agenda, and deepen south-south relations.
BRICS is becoming the meeting place for developing countries, and a platform for south-south co-operation.
Meanwhile, the BRICS mechanism has already proved its efficacy as a channel for improving bilateral relations.
This year marks the 20th anniversary of the establishment of diplomatic relations between China and South Africa.
In two decades, the two countries have witnessed their relationship grow stronger by the day.
China has been South Africa’s biggest trading partner for eight consecutive years, with two-way trade in 2016 reaching $35bn.
That’s 20 times what it was 20 years ago, and it accounts for one quarter of all trade between China and Africa.
China is also a major investor in South Africa, with direct investment topping $15bn.
Africa is set for a decade of unbelievable growth and prosperity, said Dr Iqbal Survé, the chairperson of the South African chapter of the BRICS Business Council. Working groups have over the past few months increased momentum to showcase South Africa as the most diversified economy on the continent, he said. BRICS provides a channel for these plentiful opportunities.
By basing their co-operation on mutual trust and benefit, BRICS countries have been rewarded with growing confidence and prosperity.
At a time when the world is facing the grave challenges of protectionism and isolationism, countries with the determination to safeguard the international rules-based order can be a force for good.
There is a Chinese saying “Even mountains and seas can’t separate people with shared aspirations”.
As BRICS leaders gather under the theme of “Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution”, there is much to anticipate and share with the world. - China Media Group
Wang Shanshan is current affairs commentator with China Media Group