By Raghu Nathan | IDN-InDepth NewsAnalysis
DURBAN (IDN) – As South Africa inched towards hosting the fifth BRICS Summit from March 26 to 27 in the historic city of Durban, the German Bertelsmann Foundation threw a spanner in the works by declaring that South Africa is “not a model for sustainable development on the African continent”.
The think-tank explained: “The country, in contrast to Brazil for example, has not made convincing social progress in important areas, such as education, health, social inclusion and unemployment, whereas other African countries are catching up and becoming more attractive to the BRICS countries.”
BRICS is an acronym for the powerful grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa. The first BRIC Summit took place in Yekateringburg, Russia, where the elected leaders of the four countries formally declared the membership of the BRIC economic bloc. South Africa joined the bloc in 2010, resulting in BRICS.
These summits are convened to seek common ground on areas of importance for these major economies. Talks represent spheres of political and entrepreneurial coordination, in which member countries have identified several business opportunities, economic complementarities and areas of cooperation.
The BRICS mechanism aims to achieve peace, security, development and cooperation. It also seeks to contribute significantly to the development of humanity and establish a more equitable and fair world.
Bertelsmann Foundation report admits that South Africa has been able to re-establish economic stability and generate notable economic growth after the end of the apartheid regime in 1990. However, the growth of recent years has not been able to effectively eliminate social imbalances in society, it says.
According to the study’s authors, the main reason for the extreme level of social inequality and structural unemployment, especially among young people, is a socially selective and qualitatively inadequate education system. Even though education spending, at 20 percent, accounts for the greatest share of the South African budget, the country has not yet been able to close the gap to other BRICS countries.
With 3 percent economic growth estimated for 2013, economic growth is approaching the level before the crisis. However, this is still based on non-labour-intensive sectors, such as the financial sector, and does not open up sufficient opportunities for the majority of the population. Over 50 percent of South Africans aged 15 to 24 were unemployed in 2010. Country experts attribute the poorest performance in the employment market and education policy to South Africa compared to Brazil, Russia, India and China.
The study makes particular reference to the low average life expectancy in South Africa as an especially striking indicator. In contrast to other BRICS countries and many other African countries, life expectancy fell in recent years and there has only been a slight improvement recently. At 53.4, it still remains behind the average for Sub-Saharan Africa.
The experts state that one of the serious development problems is the political system’s major inability to implement policies effectively. The greatest weaknesses are in the co-ordination between the ministries and state authorities at various administrative levels. Financial resources have not been used effectively enough at a sub-national level.
Meanwhile, the economies of other African countries, for example Botswana, Namibia and Nigeria, are catching up. China and India are not the only countries to have long-standing bilateral links to most African countries; Brazil is also becoming increasingly interested in Portuguese-speaking Angola as a gateway to Africa.
South Africa appeared to be upbeat in run-up to the summit. The New Age newspaper reported that the country’s “comparative advantage within BRICS emanates from the country’s considerable mineral wealth”.
In a recent report commissioned by the US-based Citigroup bank, the newspaper reported, South Africa was ranked the world’s richest country in terms of its mineral reserves, worth an estimated $2.5-trillion (R22-trillion).
South Africa is the world’s largest producer of platinum, chrome, vanadium and manganese, is the third-largest gold miner and offers highly sophisticated mining-related professional services, contributing significantly to the BRICS resource pool, the news report said.
The country is also seen as the gateway to the rest of Africa and it has sophisticated financial and banking sectors, it added.
What lends an added significance to the forthcoming BRICS meeting is that it promises to bring about ground-breaking initiatives, such as the establishment of a development bank of developing countries that will trim their reliance on the World Bank and IMF.
Experts from the BRICS group of countries have in fact given their backing to the creation of a BRICS development bank, as well as an alternative to Western rating agencies for educational institutions, says the executive director of Russia’s National Committee for BRICS studies, Georgy Toloraya.
According to Summit sources, officials from the five countries met in Durban over a weekend earlier in March for a workshop aimed at mapping out a long-term strategy for a mooted consortium of BRICS think tanks. The experts held three days of sessions in the run-up to the summit, where they agreed to establish a council of think tanks and to “support the idea of a BRICS bank”, Toloraya said.
Toloraya said in the first phase such a financial institution would serve as a centre of analysis.
“We use World Bank and International Monetary Fund statistics and analytical reports all the time, as we have no such instruments of our own. A future BRICS Investment Bank is seen as a mechanism that would help realize where money should go, agree development strategies and coordinate investment,” Toloraya said.
The experts also indicated that the BRICS countries might conclude preferential trade agreements. “It will not be a free trade zone yet, but a first step towards it. Settlements in national currencies are not ruled out,” Toloraya said
The recommendation to create a BRICS rating agency for educational establishments has similar reasons behind it. “None of our universities is high on the Western rating lists. In the meantime, the Silicon Valley in the United States is crowded with Russians,” Toloraya said, adding that Western university ratings relied on publications in Western magazines and on Western awards.
“Such an agency would be rather easy to set up. When we know how we rate ourselves, possibly students will decide to go to study in Russia or elsewhere, and not in the United States,” he said.
Toloraya sees the BRICS grouping as an “intellectual project for formulating new rules of global co-existence”.
An association of countries located on four continents was “an alliance of civilizations which will never develop into a military bloc,” he said. “BRICS is an elite project, an attempt by rising powers to safeguard their interests together. BRICS is a civilized attempt at coming to terms as to what a future world order should be. It is not accidental that the group’s participants are advocates of non-interference in internal affairs and of the rule of international law.” [IDN-InDepthNews – March 19, 2013]
Picture: BRICS heads of state at previous summit | Credit: www.brics5.co.za