VENTURES AFRICA – There are strong indications that the proposed BRICS Development bank will be established in South Africa before the next year; according to the South Africa’s Minister of International Relations and Cooperation Maite Nkoana-Mashabane, the Development Bank may be launched next year during the BRICS summit to be held in South Africa.
At a meeting of the ANC’s Progressive Business Forum, Mashabane said that the economic group, BRICS, is keenly watching the possibility that the BRICS Development Bank will be established in 2012.
BRICS is an association of the world’s leading emerging economies, it arose out of the inclusion of South Africa to the BRIC group in 2010. The group consists: Brazil, Russia, India, China and South Africa, which add up to form the acronym BRICS.
The idea to establish a Development Bank by the group was first conceived at the last BRICS summit in India this year March.
The proposed financial establishment will serve as an alternative to the International Monetary Fund (IMF) while helping its member countries pool resources for infrastructure development and lend among themselves during difficult financial times.
It will be funded and managed by the BRICS and other developing countries.
According to South Africa.info, BRICS country leaders met on the sideline at the G20 summit to discuss the group’s financial safety net. The leaders discussed the possibilities of setting up a currency swap arrangement and a foreign exchange reserve pool within the five-member framework which could be used by any members of the group in time of financial crisis.
Chief executive of Business Unity SA (BUSA), Nomaxabiso Majokweni, asserted at a meeting of the ANC’s Progressive Business Forum, that the BRICS Development Bank would help South Africa speed up its multibillion-rand infrastructure programme.
She believes that South Africa stands to benefit a lot from the proposed Development Bank as it would help the country finance its state-led infrastructure drive.
“An immediate benefit for South Africa will be a massive injection in our infrastructure development plan, which could help government to meet some of its very ambitious growth targets,” Majokweni said.
She added that “The BRICS bank will promote growth and investment in its member states and other emerging markets, and will be a strong voice in the lobbying for the reform of international financial institutions.”
According to Business Live, South Africa also stands the chance to double her trade with Brazil, Russia, India, and China to $500 billion by 2015, if barriers to trade and investment within the bloc were addressed.
“The balancing act is to ease business transactions while protecting the interests of industry and manufacturing. We are not seeking preferential or free trade agreements. Rather, we should be driving for more transparency from our partners, especially on tariff schedules and hidden internal taxes,” Majokweni said.
Other barriers that may be faced include onerous labelling requirements and sanitary provisions.
To overcome these challenges, Majokweni, however, advised South Africa to lobby for a permanent business structure that can help to simplify, clarify and overcome these trading obstacles.
According to her, South Africa has to “bring down the cost and complexity of doing business in the BRICS countries”.