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JEREMY MAGGS: ANC treasurer-general Gwen Ramokgopa, says the potential growth of the Brics [Brazil, Russia, India, China and South Africa] Forum should not be seen as a threat to developing nations. Currently, Brics nations represent 30% of the global population and with more countries having applied for membership, this figure, she says, could go up to around 50%.
She was addressing the Brics Colloquium, and with me now as the head of business in the Brics Council, Stavros Nicolaou. I want to start with this, Stavros, you said yesterday, the council will not be drawn into any geopolitical events. Why did you say that?
STAVROS NICOLAOU: Jeremy, firstly, let me clarify how the Brics Business Council is appointed. We are nominated by Business Unity South Africa and the Black Business Council, and there’s an agreement as to which five candidates those two entities put forward. We are then appointed by the Minister of Trade, Industry and Competition, Minister Ebrahim Patel in this instance.
So we are there as representatives of the South African business constituencies and our mandate and core interest is how do we utilise the Brics instrument to provide business opportunities bilaterally and multilaterally, and how do we use these instruments to grow certain sectors that are key to the economy. Lastly, how do we use this instrument to trigger some economic growth, job creation and industrialisation in our country.
So our mandate is a very clear one, and that’s where we intend to keep our focus. Being drawn into any of the political side shows is going to be dilutive. It’s contrary to the mandate that we aim to execute on and contrary to what is good for business, frankly.
JEREMY MAGGS: All right, Stavros, I do acknowledge that. So let’s move ahead then to the August summit. From a business or an economic perspective, what is an ideal outcome for Brics and obviously for South Africa?
STAVROS NICOLAOU: Jeremy, we have the opportunity, of course we assume chairpersonship of Brics, as you know, at the summit in August. There’s already been a handover of chairpersonship at a Brics Business Council level. South Africa is now chairing, and that means for that 12-month period we have a good opportunity to entrench some of South Africa and more broadly the region’s priorities. So we get to set the agenda.
There are three priorities that we have set amongst the many priorities, of course, that exist. Let me just run through very quickly what the three are in no particular order of preference. The first is we acknowledge the trade and investment growth that has taken place in Brics. So if I look at a four-year compounded period, 2017 to 2021, trade within Brics has grown at 44%, and our trade with the Brics partners has also grown in that period.
However, there’s a small matter of uneven trade patterns that has developed, meaning that we run a trade deficit with all four of these Bric countries. So addressing that, and you’ll always get trade deficits and surpluses of course, but I think addressing that to the point where we are exporting more manufactured finished goods, rather than raw materials, and importing less manufactured goods is what we aim to do to try and even out the trade.
So that’s the first thing. The second thing is we want to use this as an opportunity to positively profile South Africa as a trade, economic, business, commercial and investment destination in the midst of many, many headwinds, which I need not tell you about, Jeremy, you know that better than I do. But this does present an opportunity if we put our best business foot forward, it certainly helps the narrative and the overall picture.
Then lastly, we are the conduit as South Africa to the rest of the continent. The African Continental Free Trade Area is starting to take shape. It enables aggregated markets, aggregated volumes and economies of scale on the continent. We aim to draw that instrument, the instrument of the Continental Free Trade Area into Brics to enhance overall growth opportunities both in South Africa, but also more broadly, continentally speaking.
There’s, of course, a very strong link to that to some of the countries that have expressed an interest, and I believe there are about 30 of them that have expressed an interest either formally or informally to join the Brics formation. So there is some alignment to that in terms of our third priority as well.
JEREMY MAGGS: It was interesting in that respect, Stavros, to hear the ANC treasurer-general saying yesterday, the potential growth of Brics and the forum should not be seen as a threat to developed nations. What’s your response to that? What do you think was the thinking behind that?
STAVROS NICOLAOU: Jeremy, the best way to describe the situation is probably to quote Henry Kissinger. Kissinger once said, America has no friends, it only has interest. I think we’ve got to look at it that way ourselves as South Africa, we have to find these trade and investment opportunities and be agnostic to the geopolitics that are playing out.
So we should be trading with the east, the west, the north and the south. So wherever these interests and opportunities lie is where we should be placing our focus, and I’m afraid that hasn’t always been the case.
So aligning foreign or diplomatic policy with economic and business policy is a priority here, and I’d like to suggest that’s what the treasurer-general was thinking about yesterday when she made that comment.
JEREMY MAGGS: And Stavros finally, in spite of the headwinds that you’ve mentioned ahead of the summit, what is the general sense within the council about the outcome here? Is there a growing sense of bullishness?
STAVROS NICOLAOU: There is on two fronts at very least. I think the first thing is that we’ve been working very hard as a council to try and deliver a world class event because I think people are going to judge us on our ability to execute. We don’t have the resources that the other four Bric countries have got. Certainly not China and India.
So we are reasonably confident that the 32-odd business events that we put together, either at the time of the summit or around the time of the summit, will be all very relevant and world class events. So we’re quite bullish about that aspect.
But then secondly, this is the first time in four years that the Brics Summit takes place face to face, and I think this presents a real opportunity for South Africa to reignite what the excitement was around Brics initially because there has been some pedestrian movement in many respects with some of these initiatives. I think this presents a real opportunity to reignite and rekindle and we are quite excited as a council about that.
JEREMY MAGGS: Stavros Nicolaou, thank you very much.
