We are continuing to publish the interviews made on the margins of the BRICS summit in South Africa. This time, we attended a small conference of South Africa’s Minister of Trade, Industry and Competition, Ebrahim Patel.
Patel presented a specifically African perspective on the summit, which we will explore in further upcoming interviews as well.
What is your main take-away from this BRICS summit?
One of the key things that’s come out of this summit is a common recognition by BRICS countries that the best way to develop a partnership with the African continent is to support us in our efforts with industrialization.
Historically, Africa and South Africa has been a provider only of raw materials to countries across the world, including BRICS nations. And the proposition, the value proposition we’ve put on the table is come and invest in setting up factories here on the African continent.
Manufacturing on the African continent
Help us to grow jobs, but you also get great opportunities here. This market is huge. 1.3 billion Africans, a young population, energetic entrepreneurs, a network industry, and a growing investment in skills and in infrastructure. So that’s the message that’s come out here. All the BRICS leaders have recognized that, and they’ve understood that the outreach with the African continent has to have a component of manufacturing goods here on the African continent.
How is your perspective on relations between Africa and China specifically, given the increasing economic activity of China on the continent?
So, the Industrial Development Corporation is South Africa’s leading public investment agency that’s aimed at industrialization, precisely because we’ve been talking to China about increasing the level of investment in things like manufacturing, productive services and so on. The obvious partnership was between the Bank of China and the Industrial Development Corporation. It’s not the only one.
We’ve also signed an agreement with the China-Africa Development Fund, and we will be engaging with a range of Chinese financial institutions. In November, China will be hosting the China International Import Expo in Shanghai. And that’s another opportunity to reach out to the Chinese capital markets.
China has a growing and quite deep capital market. And we have great opportunities here on the African continent to use that capital in productive and profitable investment. And that match is what that partnership is about.
“BRICS’ weight in global economy has increased”
Which consequences will the BRICS’s enlargement have on the global economic governance?
What we have now is a bigger number of people, a bigger market, a bigger investible capability, and that will mean that BRICS’s weight in the global economy has clearly increased.
Our job now is to ensure that out of that BRICS membership, this combined membership, we’re able to ensure value to every BRICS member. Ultimately, citizens look to us for more jobs, for more investment, for more opportunities for small business. So, this is a game changer in bringing together the economies of the South and connecting them much more.
Think about it. Within all those economies, you’ve got enormous resources of raw materials, you have huge pools of capital and technology, you’ve got a large labor force, more than 45% of the world’s labor force is now in BRICS.
Those are important opportunities that BRICS can play to and ensure growth in the global economy because it’s not only BRICS that will benefit from it. It’s not only BRICS+, that will benefit. When BRICS does well, the global economy too gets a dividend in increased growth, because with growth goes increased aggregate demand.
We suck in products from other parts outside the BRICS family, and that is good for citizens all over the world.
What are your expectations regarding trade between BRICS countries and Latin American countries, especially given the initiatives on trade and local currency, and regional currency?
I think we will see over a number of years an increasing level of trade because the countries will be co-investing in each other. This is not an exclusive trading arrangement that BRICS will only trade with itself. We also stand for open markets globally.
If you look at the history of humanity over a number of decades, in fact hundreds of years, we as human beings have been interacting more with each other. And since the end of the Second World War, there’s been a strong attempt at creating a stable global architecture that promotes trade and investment between countries.
And not only between friends, but between countries, because that has lifted hundreds of millions of people out of poverty, it’s boosted global growth and so BRICS will also be putting forward the argument for a global trading system that works.
Is there any activity that you have with the community members of the community in common? There’s been over the last few days a remarkable interaction between the Chinese business community and that in South Africa.
South Africa will have a presence in Shanghai at the Shanghai or the China International Import Exhibition. And in addition to that, we’re talking about the technical work that needs to be done that would allow South Africa in future to set up a South African Chamber of Business in China itself.
Bretton Woods model “has not served well” African and Latin American countries – reform is needed
That will take us a number of months to get over the finish line, but we’ve had very productive discussions between myself and Minister Wang Wentao on that project. There is a universal agreement by countries in the south, not only BRICS countries, but all African countries, Latin American countries that we have not been well served with the Bretton Woods model that the IMF and the World Bank has not given the kind of concessional funding and the scale of the funding that’s required to lift many people out of poverty.
So there’s a need for a reform within those financial institutions and in addition to that, BRICS itself can complement those efforts by building the New Development Bank.
The New Development Bank will have more shareholders in the future, and it will be able to raise, we hope, significant additional capital that can be deployed into productive investment.
The New Development Bank is particularly important because the deficit in many developing countries is infrastructure, energy, transport logistics, and critically, water in a number of places.
More recently, of course, digital infrastructure, because the world is digitizing, and there are new opportunities that come from digital industrialization, but that requires infrastructure.
So the complementarity of a reform of the international financial institutions, that more capital is made available, more concessional terms are negotiated, and that these are done without the kind of onerous conditionalities that historically have been imposed on developing countries. That, together with the New Development Bank, can be a boost to global development and particularly development of the global south.
BRICS will cooperate on “promoting green energy”
The last question is, how do you plan on the major oil producers are currently going to be increasing? Do you think that this marks the end of the pit of the dollar?
Well, I think that question is perhaps best put to the countries that are big players in oil. From our point of view as BRICS, we’re looking also at energy, looking at green energy. The world has to prepare for the reality of climate mitigation. Weather patterns are being disturbed across the world, and so all countries are committed to finding a just transition to a greener path.
At the same time, of course, the speed with which we do that needs to recognize the vulnerability of economies with additional costs and therefore while I can’t answer the oil questions specifically, that would be oil ministers of those countries that would answer it better, I can make the point that there will be a lot of collaboration that would be oil ministers of those countries that would answer it better, I can make the point that there will be a lot of collaboration with in BRICS on promoting green energy. Thank you very much.
This press conference was attended to on behalf of TelesurTV.
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