Analysts predict BRICS could become as big as the Group 7 by 2027. Can the BRICS nations effectively come together promoting inclusiveness, trade and technological collaboration?

The recurring question at the three-day BRICS summit in July, which brought some of the planet’s most powerful leaders to Africa’s richest square mile Sandton, was the importance of the Fourth Industrial Revolution (4IR) when it comes to inter-trade. So what happens next?
The 4IR, like the three revolutions preceding it, has disrupted economies and societies around the globe. In many instances, developing countries have been left behind, perpetuating the exclusion of the past rooted in colonialism and exploitation.
The leaders of Brazil, Russia, India, China and South Africa (BRICS), who are aware of the enormous hurdles, used the gathering in Johannesburg to issue a clarion call for united and concerted action for the impending revolution.
Host president Cyril Ramaphosa of South Africa – which is the current chair of BRICS – said the 4IR presents the world with opportunities and should be embraced.
“As the BRICS forum, we can neither ignore, nor take for-granted, the reality that is the Fourth Industrial Revolution and the impact that it will have on the global economy. There is no area of economic activity that is immune from technological disruption.
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<div id="attachment_37173" style="width: 750px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-37173" class="wp-image-37173 size-large" src="https://www.forbesafrica.com/wp-content/uploads/2018/09/Cyril-Ramaphosa_GL-1024x682.jpg" alt="" width="740" height="493" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/09/Cyril-Ramaphosa_GL-1024x682.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Cyril-Ramaphosa_GL-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Cyril-Ramaphosa_GL-600x400.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Cyril-Ramaphosa_GL-768x512.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Cyril-Ramaphosa_GL.jpg 1241w" sizes="(max-width: 740px) 100vw, 740px" />Cyril Ramaphosa. Photo by Gypseenia Lion</div>
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<blockquote> “It [The Fourth Industrial Revolution] has the potential to solve many of the social problems we face, by better equipping us to combat disease, hunger and environmental degradation.”</blockquote>
The 10th summit, hosted in South Africa for a second time, was held from July 25 to 27. It brought together a galaxy of delegates, government officials, business people and the media at the Sandton Convention Centre.
Roads were barricaded amid heavy police and military presence, with strict no-flying zones applied as Vladimir Putin and Xi Jinping, among some of the world’s most reclusive leaders, spent a night or two under African skies.
Under the theme, ‘BRICS in Africa: collaboration for inclusive growth and shared prosperity in the 4th Industrial Revolution’, the focus of the summit was issues and solutions to achieve inclusive growth through collaboration.
Technology, big data and innovation were amongst the most operative words. Ramaphosa set the agenda by highlighting the role technology will play years from now.
“The technologies of the Fourth Industrial Revolution provide developing and emerging economies with the opportunity to leapfrog the technologies of the preceding revolutions.
“It aims to translate the vision of the second decade of BRICS cooperation into reality through deepened cooperation on industrialization, innovation, inclusiveness and investment,” he said.
India’s Prime minister, Narendra Modi, emphasized the need for shared policies and collaboration in order to unlock the opportunities of the future.
But, he added, the consequences of the revolution may be difficult to predict.
“Whatever happens will be far-reaching. We need to discuss how we will prepare for it. Traditionally, manufacturing will continue being a source of jobs for our youth. We need to make changes in our approach and make sure that schools prepare our youth for the changes,” said Modi.
The BRICS Youth Forum started off as an idea during a meeting between the heads of the five states in South Africa in 2014.
Encouraging dialogue with regard to youth policies and employment, the forum has notched some progress.
<a href="http://www.forbesafrica.com/woman/2018/09/10/why-we-need-hard-cash-into-the-economy/" target="_blank" rel="noopener">READ MORE: Why We Need ‘Hard Cash In The Economy</a>
South Africa’s Minister of Higher Education and Training, Naledi Pandor, said the youth forum consolidated a set of messages that was to be sent to the BRICS leaders.
“The youth have begun to speak, they believe BRICS should be a solid formation and they have ideas on how the youth should collaborate to ensure that the BRICS idea is not just the idea of our generation but one that exists in perpetuity,” she said.
As argued by the South African Minister of Science and Technology, Mmamoloko Kubayi-Ngubane, collaboration between the youth from the five states will take the form of what she called “young researchers’ exchange”.
For Kubayi-Ngubane,“the inclusion of young people especially with regard to new tech and innovations should be prioritized as much as  the formal trade collaboration.
“Innovation [is] becoming the cornerstone for our economy going forward,” she told FORBES AFRICA.
<div id="attachment_37174" style="width: 750px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-37174" class="wp-image-37174 size-large" src="https://www.forbesafrica.com/wp-content/uploads/2018/09/Family-photo_km-1024x681.jpg" alt="" width="740" height="492" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/09/Family-photo_km-1024x681.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Family-photo_km-300x199.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Family-photo_km-600x399.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Family-photo_km-768x510.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Family-photo_km.jpg 2048w" sizes="(max-width: 740px) 100vw, 740px" />(left to right) India&#8217;s Prime Minister Narendra Modi, President of China Xi Jinping, South Africa&#8217;s President Cyril Ramaphosa, President of Russia Vladimir Putin and the President of Brazil Michel Temer. Photo by Karen Mwendera.</div>
The BRICS countries, which account for 40% of the world’s population, have not been laggards with regard to technological advancements, with the World Economic Forum noting in 2016 that four of them – South Africa, Brazil, China and Russia – are in the top 100 list of countries with the latest technologies.
The President of BRICS’ New Development Bank, K V Kamath, says that some of their big investments “include power, port and renewable power”.
Analysts predict that BRICS could become as influential as the Group 7 (the USA, Japan, Germany, France, Britain, Canada and Italy) by 2027.
Therefore, the collaboration of BRICS nations is a key strategy to strengthen not just political powers but technological capabilities as well.
However, this collaboration calls for the redefinition of borders and going against the norms of sovereignty.
During the summit, emphasis was placed on establishing open economies. This would help foster easier trade between BRICS countries.
Within the hallways of the convention center, presidents Jinping and Ramaphosa shared a joke as they walked side by side towards the stage. They had caught up earlier.
China has dominated the trade relationship with South Africa, with some analysts going so far as to suggest that the world’s second largest economy is dumping goods in South Africa.
Dressed in black and a blue tie, the Chinese president said he was delighted to visit the Rainbow Nation once again and used his opening address to drive home a message clearly directed at US President Donald Trump.
“We BRICS countries should firmly promote an open world economy, be resolute in rejecting unilateralism and protectionism, promote trade and investment liberalization and facilitation, and jointly steer the global economy toward greater openness, inclusiveness, balanced growth and win-win outcomes for all,” he told the 1,000-plus business leaders present.
Among those present at the summit was Alan Mukoki, CEO of the South African Chamber of Commerce and Industry, which groups approximately 20,000 small, medium and large enterprises.
Mukoki said as desirable as having open economies among the BRICS countries is, it may have negative implications for those members not as developed as the others.
“You need to manage those things correctly, you need to say ‘let’s all start on an equal footing’. We start together and then when we are equal, we can then go and race an open race,” he told FORBES AFRICA.
“Even though I look fit, you can’t say that I should run the same race as Usain Bolt. It is not going to happen…otherwise we will destroy and decimate the economies of the region. South Africa’s economy cannot be big if the economies of the region are actually small,” he said.
Mukoki said the right mechanisms and strategies should be put in place in order for each member state to compete equally.
Others however remain hopeful.
South Africa’s Minister of Trade and Industry, Rob Davies, chose his words carefully when describing what South Africa is looking for regarding trade and investment in an open economy.
“It’s all about building regional value chains allowing us to up the value chain and become more sophisticated producers of industrial products and more value-added products,” he told FORBES AFRICA.
For South Africa, the involvement in BRICS is an opportunity to strengthen intra-Africa ties. A number of countries
<div id="attachment_37176" style="width: 310px" class="wp-caption alignright"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-37176" class="wp-image-37176 size-medium" src="https://www.forbesafrica.com/wp-content/uploads/2018/09/Break-the-Brics_GL-300x200.jpg" alt="" width="300" height="200" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/09/Break-the-Brics_GL-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Break-the-Brics_GL-600x400.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Break-the-Brics_GL-768x512.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Break-the-Brics_GL-1024x683.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2018/09/Break-the-Brics_GL.jpg 1736w" sizes="(max-width: 300px) 100vw, 300px" />Trevor Ngwane, coordinator of the Break the BRICS coalition, hands over a memorandum of demands to South African Minister of Public Works, Thembelani Nxesi. The Group gathered outside the Sandton Convention Centre claiming BRICS in &#8220;anti-poor&#8221;. Photo by Gypseenia Lion.</div>
were invited to an outreach program of the BRICS summit, including Ethiopia, Angola, Zambia, Namibia, Senegal, Jamaica, Gabon, Togo, Uganda and Rwanda. Each presented opportunities to deepen their partnerships with BRICS countries.
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“BRICS is not in competition with anyone, BRICS seeks to work with the entire global community for the betterment of humankind,” said Anil Sooklal, ambassador for BRICS, to FORBES AFRICA.
“The summit is not the end, the summit is the beginning of a process.”
&#8211; By Gypseenia Lion and Karen Mwendera

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Towards An Open World Economy

Busi Mabuza, the Chairperson of the Board of the Industrial Development Corporation, on the BRICS summit and why we need to start talking as an African bloc.

If there’s one person who knows what’s good for investment, it’s Busi Mabuza, the Chairperson of the
Industrial Development Corporation (IDC), a national development finance institution promoting economic growth and industrial development in South Africa.
Exactly a month after the BRICS Summit, which brought together Brazil, Russia, India and China to South Africa in July, we met with Mabuza for her views on why such forums are key for Africa:
What, according to you, was the biggest outcome of the BRICS Summit?
The countries’ focus was on attracting investment, so we had presidents of the BRICS countries coming with goody bags to the country, especially President Xi Jinping who made quite a substantial commitment to investment in South Africa. What I liked most though was the ‘BRICS Plus’ approach. The invite to other African countries to be part of some of the sessions of BRICS, because with the Continental Free Trade Area Agreement, I think we need to start talking as an African bloc.
South Africa has a minute population compared to the other BRICS countries for us to be an attractive preposition to those large economies….we have to speak with the voice that talks for the rest of Africa as well. I also liked the fact that there was conversation in a concerted [way] at a BRICS women’s forum…I didn’t see the evidence of it taking shape yet, but the fact that it was a topic of discussion, that there were initiatives around it…I think is very promising and exciting.
One of the conversations at the conference was the focus on an open economy, what would that mean for South Africa and the rest of Africa?
We should have free trade between the BRICS partners and South Africa, precisely because South Africa is quite a small economy compared to the BRICS partners.
We export raw material to those countries, they export into South Africa finished goods. So the trade still needs to be developed. We need to migrate upwards in terms of our trade mix and portfolio mix, so that if the economies are open, if the trade is open and the tariff barriers are done away with, then it shouldn’t be to the detriment of one economy. There has to be a win-win complementarity.
The other aspect I think very important is the movement of people. We have visa requirements sometimes which are quite onerous and I think there was a lot of time dedicated to talking about those obstacles. People find that when they have investments in South Africa and bring professionals to the country, they can’t stay for a long enough period for them to actually get the business up and going before they go back in order to meet the visa requirements. I think the government is making a concerted effort on that front in trying to make sure visa requirements are not as stringent and do not become an obstacle for our trading partners.
As African countries, we now need to start working towards bringing down all the tariffs, trade tariffs and the non-tariff barriers between exchanging goods and services amongst the different African countries. It’s going to take long because some of the issues are quite complex…So that would be my understanding of opening up the economy. I think there are risks on the one side and opportunities on the other side. What’s important is we move in an orderly fashion and ensure that as we do so, there is a win-win proposition for all countries.
How important are summits such as BRICS for South Africa?
It feels as though we are reintegrating into the rest of the world. I think we were almost at some stage a pariah state but I think the fact that we have been received so warmly since the new president [Cyril Ramaphosa] early this year is a great positive because it means there’s a lot of goodwill in the rest of the world for us.
South Africa’s economy has been sluggish, mainly because of lack of investment. There are other challenges. Our unemployment rates are shocking. I was looking at the statistics compared to our BRICS partners – we are at 27% officially…The need is for us to attract not just the political goodwill of the BRICS partners, but their hard cash into the economy. Not just the portfolio flow – we are not looking for people who are going to buy shares on the stock exchange and sell them as quickly as they bought them if things go wrong – we are looking for people who will bring projects into South Africa, people who will create jobs for South Africans.
[For example], the Chinese, are known for bringing their local projects that they build in countries. But I think as long as the balance is a significant majority – South Africans employed in those projects – then it will be to our benefit. Then there are opportunities for us to show them a thing or two. We do well as far as women’s representation is concerned, not in the private sector, but in the public sector; we are still ahead of our BRICS partners.
You will be amazed that our rail and road infrastructure in terms of area is way ahead of the other countries. So there are opportunities for us to see whether our skill is taken to those countries.
At the IDC, how do you promote women in business and youth?
In the recent past, we have realized something we should have known a long time ago. People focus on what is measured, and we have therefore started measuring the amounts that are collected and dispersed to youth-owned and women-owned businesses and that has done wonders for us. Four years ago, we didn’t know how much of our funding was being dispersed to companies owned by women or was being dispersed to companies owned by young people.
Now, because management is incentivized to disperse a certain percentage of our funding to women-owned and youth-owned businesses, we are seeing more and more. There are years when – I think it was the previous financial year – we overshot our targets in terms of the amounts dispersed to youth-owned and women-owned businesses. We of course pay attention to our employment equity profile within but we also look at the employment equity performance of the businesses we invest in. That’s a space where we have seen sluggish progress but I think now that we are focusing on it, when people come and look for investment, we probe their employment equity profile. We see male management teams and we ask them why and how long it’s going to take them to bring in female talent and young people. And I expect that we will start seeing a shift on that front as well.
And if the IDC portfolio companies start living as good examples of what this country should be doing more and more, then I will be happy.
In August, the IDC approved a funding of R16.7 billion ($1.1 billion). What kind of businesses will that money go towards?
The companies are diverse. We need to be focusing on industrial development and a significant majority of the companies that benefitted from our R16.7 billion disbursement were industrial companies. However, because of where the economic cycle is, there’s quite a number of distressed companies. We’re a development financial institution, therefore, we would like to think of ourselves as patient investors. And where companies are distressed, but we can see there’s an opportunity to be viable down the line, we want to support them…
What are the new industries the IDC is currently looking at?
In fact, we have a new division called New Industries. We have recognized that for IDC and South Africa to remain relevant, we need to understand the 4th Industrial Revolution.
The new era businesses cannot be valued in a similar fashion as one would value the retail company where you look at the profits and you say ‘ok, the business is doing well’.
There, you look at the technology, you look at the potential of that technology and you support the business on that basis.
I was fascinated there is a company in South Africa working in the Internet of Things (IoT) space because it is tempting to assume that those new technologies are just being developed in the rest of the world but that South Africans have actually started companies in that space is exciting for me.

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