While President Cyril Ramaphosa has wrapped up a three day to the 16th BRICS Summit, many South Africans may be still in the dark about importance of this partnership, however, it does have a number of economic benefits for SA. Picture: The Presidency/Twitter
This week marked the end of 16th BRICS Summit in Kazan, Russia, where President Cyril Ramaphosa had bilateral discussions with leaders from various BRICS member countries including Russia, Egypt, Iran, and the United Arab Emirates (UAE).
The summit was themed “Strengthening Multilateralism for Equitable Global Development and Security” and ran from October 22 to 24.
Other heads of state that were present at the summit include: Prime Minister of India Narendra Modi; President of China, Xi Jinping; and the President of the Russian Federation, Vladimir Putin. President of Brazil Lula da Silva did not attend the summit as he was unwell.
Joining Ramaphosa at BRIC was the Minister of International Relations and Cooperation Ronald Lamola; Minister of Defence and Military Veterans Angie Motshekga; Minister in the Presidency Khumbudzo Ntshavheni; and Minister of Trade, Industry and Competition Parks Tau.
While the world is abuzz about BRICS, why should South Africans care about the BRICS Summit? But before this crucial question is answered, it is important to understand what BRICS is.
According to the BRICS website, BRICS is made up of Brazil, Russia, India, China, and South Africa.
On September 20, 2006, after Putin proposed a meeting with fellow countries on the margins of the United Nations General Assembly Session in New York.
Present at the first meeting was the foreign ministers of Russia, Brazil and China as well as the Indian Defence Minister where they expressed their interest in expanding multilateral cooperation.
On May 16, 2008, Foreign Ministers for Brazil, Russia, Indian and China met. The following year on June 16, 2009, the first BRIC Summit took place where the BRIC leaders issued a joint statement after the Summit.
SA joined the group on December 24, 2010, which resulted in the name of the bloc changing from BRIC to BRICS.
According to CGTN (China Global Television Network), since 2010 the partnership between BRICS member countries has grown in scope and size.
Robert Nagila from CGTN said that altogether the total population of BRICS countries now stands at 3.25 billion people which represents about 41% of the global population.
“Together BRICS countries have a combined GDP of $25.8 trillion (over R455 trillion),” Nagila said.
“The organisation is built on three pillars, political and security cooperation; financial and economic cooperation; and people to people cooperation.”
In 2015, BRICS established the New Development Bank, which was created to provide financial support to emerging markets and developing countries.
On January 1, 2024, four new countries joined the BRICS bloc, they were Egypt, Ethiopia, Iran and the UAE.
At least 40 countries have expressed interest in joining the organisation, according to CGTN.
According to Sanisha Packirisamy, Chief Economist, Momentum Investments Group, BRICS countries are known for their large populations, significant influence in regional economies and/or their fast-growing markets.
“Together, they make up a substantial portion of the world’s population and GDP. The group has focused on fostering economic cooperation, promoting development and advocating for a multipolar world order that balances Western influence,” Packirisamy said.
According to Packirisamy, South Africans should care about BRICS due to the economic benefits that it offers the country.
Packirisamy said that SA should care about BRICS because of the economic benefits through increasing trade volumes, enhancing foreign direct investment opportunities and the opportunity created to expand economic relationships with new trading partners
“If leveraged correctly, membership to BRICS can also provide for a transfer of skills and technological capabilities. Access to financing is also a benefit for SA to further its infrastructure development,” Packirisamy said.
“Ultimately the BRICS grouping, just like the G20, the Quad Alliance in the Indo-Pacific or the Global South, allows SA to enhance its diplomatic influence on issues dealing with global governance.”
In 2023, at Parliament, Ramaphosa outlined the economic benefits of SA being a a part of the BRICS bloc to Members of Parliament (MPs).
Ramaphosa said that SA‘s trading with the BRICS bloc has risen by on average 10% every year from 2017 and 2021.
At the time, Ramaphosa said: “The total South African trade with other BRICS countries reached R830 million in 2022 which represents an increase of more than 70% from R487 billion in 2017.”
He said that BRICS bloc is an important source of foreign direct investment in key areas including: mining, automotive, transportation, clean energy, financial services and information technology (IT).
“These investments and projects lead to significant job creation,” Ramaphosa said.
“South Africa uses its BRICS membership to improve investment, trade, tourism, as well as capacity building, and it also flows into skills acquisition and technological capabilities that we see this relationship yielding for our country.”
Later on when answering questions from the National Council of Provinces (NCOP), Ramaphosa revealed that China is SA’s biggest trading partner.
“China today is our largest trading partner and this has largely been cemented, upheld and encouraged by our membership of BRICS.”
According to Packirisamy, there have been a number of economic spin-offs for SA including:
– Enhanced trade opportunities.
– Increase foreign direct investment flows into key areas of the economy including infrastructure development.
– Better trade and economic partnerships with new countries to enhance things like tourism.
– Potential for collaborative partnerships on green economy investments.
– Co-operation on global goals e.g. energy security and availability (renewables), technological advancement, an enhanced labour force through skills development and training.
– Broader political influence as part of a larger political grouping.
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