The fifth BRICS Summit, 26-27 March 2013Posted on Wednesday, March 27th, 2013 in Hot Seat Comments
Willemien Viljoen, tralac Researcher, discusses the fifth BRICS Summit, 26-27 March 2013.
The fifth BRICS summit is currently (26 and 27 March 2013) underway, hosted by South Africa in Durban at the Durban International Convention Centre. BRICS is an acronym for the political grouping of some of the leading emerging economies in the world, namely Brazil, Russia, India, China and South Africa. The theme for the Summit is ‘BRICS and Africa Partnership for Development, Integration and Industrialisation.’ Ambassador Jerry Matjila, the Director-General of the South African Department of International Relations and Co-operation (DIRCO), explained the reason for the theme in the BRICS Think Tank Workshop held on 26 March 2013 as being the following:
- Development, integration and industrialisation are challenges for all BRICS countries, especially in terms of inequality and poverty issues faced by Brazil, Russia, India, China and South Africa.
- In order to address all three challenges the BRICS Summit need to address the following questions: How can development address poverty and inequality concerns in each BRICS country? Given the need for deepening intra-BRICS cooperation, how can this be achieved given the fact that the five BRICS countries are based in various regions involved in their own regional configurations? How can sustainable industrialisation be created to improve inequality and poverty in the long-term for Brazil, Russia, India, China and South Africa?
Prior to the official opening of the Summit various agreements and accords were signed by the various BRICS countries.
- China and Brazil signed a currency swap deal, the Bilateral Currency Swap Accord, to safeguard their economies against any future financial crises and support trade among the countries. This deal will allow the central banks of China and Brazil to swap local currency worth up to US$ 30 billion per year.
- South Africa and China signed a deal on the possible construction of an oil refinery and the upgrade of the South African rail and port networks.
- South Africa and China signed the Terms of Reference of the Joint Inter-Ministerial Working Group on SA-China Cooperation. The Working Group will consist of Cabinet Ministers from both countries with the mandate of overseeing the implementation of bilateral agreements and monitoring the implementation of cooperative projects.
- A declaration of intent to boost trade between South Africa and China was also signed by the South African Revenue Service (SARS) and the General Administration of Customs of the People’s Republic of China.
- South Africa and China also agreed on future collaboration on research and development initiatives, manufacturing, marketing and the construction of cross-border infrastructure throughout the African continent.
- Various other agreements were also signed between South Africa and China in the fields of education, science, investment, ocean and coastal management and financial services.
- South Africa and Russia signed nine agreements in the areas of education and cooperation in the fields of energy, fisheries, aviation safety, natural resources and transport.
It seems that the main focus of the Summit is on the mandate and modalities of two institutions: the BRICS Business Council and the BRICS Development Bank. The newly-formed BRICS Business Council will consist of business executives from each country and is expected to drive private-sector partnerships among the BRICS countries. The objectives of the Council include strengthening trade relations, promoting business relations, the transfer of technology and improved cooperation in the areas of skills development, banking, the green economy, manufacturing and industrialisation. On 27 March 2013 the South African, Patrice Motsepe, was elected as chairman of the Council. One of the projects which are being discussed in the Council is the private-sector construction of an undersea telecommunications cable to link the BRICS countries.
On 26 March 2013 the BRICS countries also agreed to go ahead with the creation of the BRICS Development Bank. At the fourth BRICS Summit in Delhi, India in 2012 the BRICS countries called for the various Finance Ministers to examine the feasibility and viability of a new Development Bank to mobilise resources for infrastructure and sustainable development projects in BRICS countries as well as other emerging and developing economies. Although the countries have agreed to go ahead with the creation of this financial institution various details regarding the bank still needs to be ironed out. These include the modalities of the bank, the financial contribution required from each BRICS country, how voting rights will be allocated and the bank’s physical location. Although a preliminary communique will be signed by the heads of state of the BRICS countries on Wednesday 27 March 2013 on this issue it is expected that the bank will only start functioning in a couple of years after all these details have been worked out. Further discussions on the bank are set to take place alongside the G20 Summit in Russia in September later this year.
The BRICS Summit will be followed by the BRICS Leaders Africa Dialogue Forum Retreat with the theme of ‘Unlocking Africa’s potential: BRICS and Africa Cooperation on Infrastructure.’ The main focus of the retreat will be on infrastructure development in Africa, as well as integration and industrialisation that will be mutually beneficial for the BRICS countries and the African continent.
Sources: Fifth BRICS Summit website (http://www.brics5.co.za/)