Business leaders from Brazil, Russia, India, China and South Africa (BRICS) met face-to-face formally for the first time here to discuss ways to improve the quality of trade and investment within the grouping, which are still characterised as much by competition as by cooperation.
The five-a-side meeting of BRICS Business Council is seeking to enhance the agenda of the sixth BRICS Summit, which will be hosted by Brazil in early 2014.
Addressing the two-day meeting, South African president Jacob Zuma said the strength of the BRICS was amplified by the fact that it accounted for 43 percent of the world's population, around 18 percent of its GDP and 40 percent of currency reserves, estimated around a trillion dollars.
"our intention with the BRICS Business Council is to provide a platform to explore new models and approaches towards more equitable development and inclusive growth in the world.
"I urge you to optimally utilize this platform to consider and advance key issues in the following sectors within the BRICS economies: infrastructure, mining, mineral beneficiation, service, manufacturing, energy and financial services," Zuma told the business leaders.
"Within South Africa, we invite your participation in six areas, which are infrastructure development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism," he added.
The South African government will spend more than 4 trillion rands in the coming years on rail, road, energy, water, sanitation and the communication sectors through the country.
"Africa is rising and is full of hope and promise. It is becoming a remarkable success story which argues well for the BRICS partnership," Zuma stressed.
Trade among BRICS countries amounted to $6.1 billion in 2012, representing 16.8 percent of global trade.
South Africa is said to be keen on an overhaul of prevailing trade and investment ties between BRICS countries and Africa, which is at present based on African countries exporting raw materials to rest of the BRICS, especially China, and importing finished products in return. Similarly, investments by BRICS companies are generally directed towards natural resources, or the infrastructure required for the export of those resources.
Trade and Industry Minister Rob Davies said the current pattern was unsustainable, saying it needed to be replaced by a more balanced and symbiotic relationship.
"We need to promote a pattern of interaction in the area of trade, which supports value-added production in each of our economies," Davies said.
He said the five governments have committed to promoting trade in value-added products and improving investment relations and that he was looking forward to interacting with the business leaders on how this objective could be achieved.
The BRICS trade Ministers, though the Contact Group on Economic and Trade Issues, are studying how to promote trade in value-added products and officials are due to meet on the issue again in November.
Council chairman Patrice Motsepe said it was crucial that the commitment to increase trade and investment was seen and "quantifiable".
"We want to see investments quantify... It is important to build on the BRICS partnership," Motsepe said, stressing "value-added trade".
Zuma hoped that the meeting will provide further impetus to the foundation of the BRICS development bank.
The BRICS finance ministers, together with the central bank governors, are pursuing a "work programme" to interrogate the bank's mandate and scope of operations, its capitalisation and the sources of funding, as well as where the new bank would be located and when it would become operational.
An update is expected when the BRICS leaders meet in Saint Petersburg, Russia, in early September, on the sidelines of the 2013 G20 Summit. It has been reported that the intention is to finalise preparations for the bank in time for the 2014 BRICS summit.
Davies said that, while the bank will focus primarily on infrastructure in member counties, there is potential for it to help close some of the funding gaps that surround a range of African infrastructure projects.
South Africa Reserve Bank deputy governor Daniel Mminele earlier this month had said chief negotiators had been appointed by each country, and that negotiations had begun to set up the bank.
Davies said he believed the bank could also benefit non-BRICS members.
At the fifth BRICS summit in Durban in March, BRICS leaders had agreed to the establishment of a BRICS Development Bank to help finance infrastructure programmes and sustainable development in BRICS and other developing countries.
