tralac’s Daily News Selection
BRICS Business Forum: selected highlights
President Xi Jinping's address: Keeping abreast of the trend of the times to achieve common development
We are witnessing major changes unfolding in our world, something unseen in a century...The next decade will be a crucial one in which new global growth drivers will take the place of old ones. A new round of revolution and transformation in science, technology and industries featuring artificial intelligence, big data, quantum information and bio-technology are gaining momentum. They are giving birth to a large number of new industries and business forms and models and will fundamentally change global development and people's work and lives. We must seize this important opportunity to enable emerging markets and developing countries to achieve leapfrog development.
The next decade will see faster changes in the international landscape and the international alignment of forces. Emerging markets and developing countries already contribute 80% of global economic growth. Based on exchange rate calculation, these countries account for nearly 40% of the global economic output. Growing at their current rates, these countries will see their economic output approach half of the global total in a decade. The collective rise of emerging markets and developing countries is unstoppable, and it will make global development more balanced and global peace more firmly based.
The next decade will see a profound reshaping of the global governance system. The world is moving toward multi-polarity and greater economic globalization amid setbacks...The international community has reached a new crossroads; and we are facing a choice between cooperation and confrontation, between opening-up and a close-door policy, and between mutual benefit and a beggar-thy-neighbour approach.
Business cooperation is the most important and fruitful aspect of BRICS cooperation. Thanks to our joint efforts, new advances have been made in this cooperation this year. We BRICS countries will forge a partnership on the new industrial revolution, which involves more coordination of macro-economic policies, closer cooperation on innovation and industrialization and joint efforts to accelerate economic upgrading and the replacement of growth drivers. Our five BRICS countries have also made good progress in cooperation on trade facilitation, service trade, e-commerce, intellectual property rights and in other fields. These steps will enable us to seize opportunities and meet challenges in a changing world and enrich the BRICS Economic Partnership Strategy.
President Cyril Ramaphosa's address: 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 value-added trade. Linked to the trade agenda, we need to increase investment between BRICS countries, particularly in the productive sectors of our economy. We also require a strategic roadmap regarding the opportunities presented by the fourth industrial revolution and the measures required to mitigate its disruptive effect on industry...It is imperative that we collectively navigate the risks and leverage the opportunities that arise from the new digital age.
BRICS export, credit agencies to strengthen trade ties: The heads of export credit agencies of BRICS countries on Wednesday reaffirmed cooperation among each other, deepening of partnerships, creating a favourable external environment, actualizing cooperation and crafting a shared vision of the future. This comes after the 4th BRICS export credit agencies meeting on Tuesday, attended by all five heads ECAs of BRICS countries, including Kutoane Kutoane, the head of Export Credit Insurance Corporation of South Africa.
Energy transition may rock politics in BRICS countries - Brian Dames. The move towards renewable energy will impact politics within many countries, particularly BRICS member states, as the need for skills and labour shift, according to CEO of African Rainbow Energy and Power, Brian Dames.
US can't change global trade alone, BRICS panel hears: Standard Bank SA CEO Lungisa Fuzile said he thinks globalisation is “here to stay, it doesn’t matter who resents it”. The former Treasury director general warned that a trade war between the US and China will affect African countries as the continent relies on economic growth within the Asian superpower to generate demand for its commodities.
SA plans to sue US over import tariffs on cars: Trade and Industry Minister Rob Davies says import tariffs breach South Africa’s African Growth and Opportunity Act rights.
SA supports a rules-based trading system, but current rules are not ideal, Rob Davies says: On Tuesday, SA made a submission to the general counsel of the WTO on behalf of the Africa group. This was also in response to several proposals that have been submitted by advanced nations calling for reform of the multilateral trading system. The minister said SA had not been able to interrogate proposals from the developed nations but had indicated that it would be applying three tests before deciding whether to support these proposals:
China’s trade with Africa surges to $100bn in first half of year: China and African countries traded goods worth $99.84bn from January to June, according to customs data released by China’s Ministry of Commerce. The trade volume increased 17.3% year-on-year, slightly faster than China’s overall trade growth during the period. China’s exports to Africa grew 8.1% to $50.37bn in the first six months while imports increased 28.6% to $48.47bn, resulting in the trade surplus falling 78.6% year-on-year to US$1.9bn.
Africa-India trade value yield over $42bn per annum: Between 2016-17, India’s exports to Africa had gone up to $23bn, from $14bn recorded in 2007-08. Imports from Africa stood at $28bn in 2016-17, up from the previous $20bn in 2007-08. The top five African countries that record high exports to India include Nigeria, Kenya, Tanzania, Egypt and South Africa.
Related: (i) Daniel Silke: SA needs more than just China; (ii) Government has trumpeted China's pledge of R193bn: but South Africa has invested much more than that in China
A new growth model for Botswana: mining the future (IMF)
On the other hand, the recovery in South Africa, as you may have seen in the latest forecast of the Reserve Bank, is not expected to be strong enough. At 1.2% this year and around 2% in the coming years, revenues that SACU countries get – Botswana included – are likely to be affected. Given these developments, we are cautiously optimistic about Botswana’s prospects. We expect a rebound in growth this year and next to about 4.5% – rising further to 5% over the medium term. Botswana needs to ‘mine’ a new growth model: one where the role and size of the state is different and where the private sector takes the lead. So allow me to offer a few thoughts on the contours of such new model – in light of our own experience and research. I can see four key dimensions. [Remarks by Tao Zhang, IMF Deputy Managing Director]
Mauritius as African gateway for the UAE: update (GoM)
Minister of Foreign Affairs, Regional Integration and International Trade, Mr. Seetanah Lutchmeenaraidoo, said the main focus of the meeting was to establish an agenda for the upcoming visit of the Prince Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation of the United Arab Emirates and on Government-to-Government matters. He underlined that another topic discussed related to how Mauritius can be an ideal platform to channel investment coming from the Middle East and Asia to Africa and the ways in which such a vast cooperation can be undertaken. He indicated that during the visit of the UAE Minister, the possibilities and opportunities to enhance bilateral partnership will be examined, adding that a Business Forum comprising of investors from Dubai, the UAE and Mauritius will be held. [Ethiopia, Eritrea, UAE Tripartite Summit: statement]
COMESA to set up team on Digital Free Trade Area (Business Daily)
The Common Market for Eastern and Southern Africa plans to set up a team to oversee the implementation of the Digital Free Trade Area (DFTA). The council instructed the secretariat to finalise DFTA gap analysis in member states by the end of this year. The DFTA will require both technological and legal inputs, especially in the fields of intellectual property, competition, data privacy and protection, and cyber security. The sub-committee will be made up of members of trade, ICT, and other relevant ministries in member states.
The Karamoja Cluster encompasses cross-border areas of four IGAD Member States, namely: Ethiopia, Kenya, South Sudan and Uganda. Areas in the cluster share a history of socio-economic and political marginalization and under-development primarily due to their remote location – in relation to national capitals - and inaccessibility. On the other hand, the Karamaoja Cluster holds a lot of promise for the region’s development particularly in light of recent natural resource discoveries, and intensified national and regional infrastructure projects that are set to transform the face of the cluster. The dialogue will conclude with a ministerial meeting today which will consider the proposals of the cross-border dialogue. The ministers will also inaugurate a cross-border development facilitation unit in Moroto, Uganda.
WTO's Trade Policy Review Body: remarks by DG Azevêdo (WTO)
Director-General Roberto Azevêdo: For this current mid-year report, 71 members replied to my initial request for information. This represents about 43% of the membership and covers about 92% of world imports. While this is a slightly higher participation compared to the last mid-year report, I continue to believe that we can do better. We should aim to make this exercise as inclusive as possible. Participation in the verification process continues to be uneven. An increasing number of delegations have recently requested specific measures to be omitted from the Monitoring Report, despite the fact that they refer to official sources. This is of serious concern. The commitment to this transparency exercise should not be selective...Now allow me to turn to the substance of the report:
A Quartz commentary, by Andrew Alli: Here are some of my thoughts on Chinese investment in Africa, based on my interactions with various Chinese companies as chief executive of Africa Finance Corporation, which invested over $4.5bn in 30 African countries during my decade-long tenure.
(i) HSRC project on the catalytic role of tradable services in Southern Africa’s growth and development: The study will investigate the detailed flows of service-related imports and exports within the sub-continent. In-depth interviews will also be undertaken with senior executives in business and industry associations to explore the opportunities and obstacles facing increased trade in knowledge-intensive services. The study is funded by UNU-WIDER, in collaboration with the National Treasury and the Department of Trade and Industry.
(ii) Development Impact Evaluation project of Ethiopia’s Hawassa Industrial Park: Ethiopia is making a major investment in light manufacturing, with a focus on industrial parks. This has the potential to make Ethiopia a leader in export-oriented manufacturing in sub-Saharan Africa, yet relatively little is known about the impact of industrial employment on workers, or on complementary interventions that could increase the benefit of industrial jobs for workers. In the Hawassa Industrial Park Community Impact Evaluation, we will use a unique large-scale government-led industrialization project in Southern Ethiopia to study the impact of factory employment on workers and the rural communities from which they originate, and the impact of interventions to support workers on their labour market trajectory and well-being.
SA's MTN is considering pulling out of Guinea, Guinea Bissau and Liberia
Neocolonialism or balanced partnership? The state of agricultural trade between the EU and Africa (pdf)
Joint US-EU statement following President Juncker's visit to the White House
WEF, Chatham House: How international law is being reshaped and the challenges it faces