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Melbourne: I am very pleased to have been asked to deliver a few remarks on the future of the multilateral trading system at this, the 2012 Richard Snape Lecture Series. Since 2003, this lecture series has served as a cornucopia of ideas and opinions and I hope the dialogue this evening will also offer new and compelling perspectives on the changing topography of international trade.  I say international trade, but the reality of twenty-first century economics is that the notion of geography and of a defined marketplace is becoming increasingly irrelevant as the DNA of trade continues to transform. The edges between international, regional and national trade are becoming increasingly blurred which means that trade-related decisions that would previously have been taken in silos must now be based on the whole economic picture. Policies and decision making must become external in reach given that their impacts are now felt beyond…
Friday, 23 November 2012 00:00

South Africa: A strong African Brick in BRICS

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Address  by Marius Fransman, the Deputy Minister of of International Relations and Cooperation, during a public lecture on on the theme “South Africa: A strong African Brick in BRICS”, Stellenbosch (21/11/2012)Programme Director;Members of the University Management;Staff and students;Community leaders here with us today;Members of the media;Distinguished guests;Ladies and gentlemen.“We will continue ensuring that Africa continues to have a strong voice in international forums such as the G20, World Economic Forum and many others” so said President Jacob Zuma in his address during the recent Thabo Mbeki Centenary Lecture. These words are always our guide and an inspiration in the conduct of our foreign policy in particular our participation in the global system of governance. I urge you to keep them in mind in the course of this lecture.Programme Director, our theme for today is titled “South Africa: A strong African Brick in BRICS”. This is a golden opportunity to share with you…
Thursday, 22 November 2012 08:42

South Africa stresses need to set up BRICS bank

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CAPE TOWN, Nov. 21 (Xinhua) -- The South African government on Wednesday stressed the necessity to establish a BRICS development bank so as to boost development in member countries."If this happens it would give a major boost to some of the development needs we have," Deputy Minister of International Relations and Co-operation Marius Fransman said amid reports that the bank is likely to be official launched at the BRICS's fifth Summit'to be held in Durban, South Africa, in March 2013.Fransman said South Africa "strongly supports" the establishment of BRICS Development Bank.BRICS embraces emerging economies of Brazil, Russia, India, China and South Africa.Fransman was speaking at a conference on BRICS cooperation held at the Stellenbosch University near Cape Town.At the Durban summit, BRICS members were expected to finalize a proposal put forward at the last BRICS summit in New Delhi last year to set up a Brics-led South-South Development Bank, funded…
Wednesday, 21 November 2012 12:46

Expert Suggests South Africa-China Free Trade

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South Africa should maintain vigilance against protectionism and advance its free trade with China, an expert told Xinhua in an interview on Monday."A perfect free trade might be possible in the world we occupy. However, it is inevitable that vested interests and pressure groups will combine to force degrees of protectionism, such as a recent tendency to protect South Africa's textiles industry," said Jason Urbach, an economist at the Free Market Foundation."Current discourse in the textile industry in South Africa and elsewhere is not fortunate and appropriate," the expert said.He pointed out that "much of the antagonism is directed at China and their ability to be more efficient than everybody else in the production of clothing and textiles.""The majority of South Africa benefit from being able to buy good-quality goods from China at a low price," the expert told Xinhua.The expert said over the past decade or so imports from…
As part of the Global Economic Governance project undertaken by the South African Institute of International Affairs (SAIIA) in collaboration with the International Development Law Unit at the University of Pretoria, a critical assessment is being made to evaluate how effectively Africa's interests and concerns are directly and indirectly addressed in the G20 processes. The methodology for the critical assessment includes both a quantitative element and a qualitative element. The quantitative dimension looks at the number of times that Africa is referred to explicitly or implicitly in the G20 documents.The qualitative assessment addresses the relevance of the G20 documents to African concerns and interests, the responsiveness of the G20 to these concerns and interests, and the potential impact of the G20 on Africa. The idea is that the critical assessment will be conducted on a year by year basis, so that over time it will be possible to conclude whether…
1. We, the G20 Finance Ministers and Central Bank Governors, met to assess progress on the fulfillment of the mandates given to us by our Leaders, to promote robust growth and job creation and to address ongoing economic and financial challenges.2. We will do everything necessary to strengthen the overall health and growth of the global economy. Our main focus in the period ahead will be to rebuild confidence and to reduce risks and volatility in international financial markets; contribute to a faster pace of economic recovery and job creation, and promote the foundations for strong, sustainable, and balanced growth. We are firmly committed to open trade and investment, expanding markets and resisting protectionism in all its forms.3. We have made significant progress in implementing the commitments established in the Los Cabos Growth and Jobs Action Plan. Substantive measures have been adopted in Europe, including the launch of the European…
Thursday, 08 November 2012 00:00

An Apparently Potent ‘Flavor of the Month’

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Well I have been absent – my bad.  But I do have an explanation.  I am currently in South Africa at the invitation of colleagues from the University of Pretoria – Tuks as it was once called – and between preparation for leaving for SA – and indeed arriving here – time ran short.  But I am back now.This should help to explain my absence.  An hour after arriving I was whisked to Witwatersrand University in Johannesburg and the Jan Smuts House where the South African Institute of International Affairs (SAIIA) is now located.  There experts examined, “Values in Global Economic Governance: Do India, Brazil, and South Africa Share a Common Vision?”Hardly able to catch my breath, I was requested to join a gathering in the downtown the following day, where a panel was organized to discuss South Africa and its role in the G20.  Entitled, “South Africa and the…
During the World Trade Organization (WTO) Public Forum held in Geneva recently, the corridors and coffee shops were abuzz with speculation about the race for the position of Director General.  Pascal Lamy will end his second term in August 2013.  The official process to find a replacement will begin with nominations of candidates by member countries of the WTO in December 2012. Informal jockeying for position has already begun. 
Although the G20 faces numerous challenges and limitations, it remains a pivotal body in advancing global economic governance, and holds significant opportunities for South Africa. This was the message of Deputy Governor of the South African Reserve Bank, Daniel Mminele, in his keynote address to the South African Institute of International Affair's G20 Study Group. The Deputy Governor provided a comprehensive overview of the G20 and South Africa's role in the global body, and gave an insider's view of the future challenges and opportunities awaiting the G20. His speech can be accessed at the end of this article.
African countries should forge a common trade policy to deal with China if they are to benefit from their vast natural resources.Catherine Grant, a researcher with the South Africa Institute of International Affairs, said that most governments in the region do not have strategies when it comes to trade with China but have mostly relied on what she termed “wish lists,” which have only worked to the disadvantage of the region.Read the rest of this article on the website of the East African.
Wednesday, 03 October 2012 13:35

BRICS nations thrash out World Bank alternative

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Beijing: Experts from five emerging world economic powers have told how a two-day think tanks forum this week reached consensus on creating a BRICS development bank designed to complement existing global financial institutions such as the World Bank. Liu Youfa, deputy director of the China Institute of International Studies, said, "At the previous forum before the BRICS summit meeting in March, we were still discussing whether to create this bank, but now we are talking about how to create this bank."The 2012 BRICS Think-Tanks Forum, held in Southwest China's Chongqing Municipality on Wednesday and Thursday, was part of efforts by the five countries -- Brazil, Russia, India, China and South Africa -- to create a BRICS development bank. Its establishment joined the official agenda when BRICS leaders agreed at the organization's summit in India's New Delhi in March to consider the possibility of creating a new development bank. They decided…
Monday, 01 October 2012 12:09

Competitiveness, Protectionism, and the WTO

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John Maynard Keynes’s ghost casts a shadow over the current financial crisis. His prescriptions for the Great Depression consisted essentially of sustained fiscal stimulus and protection from imports in order to retain that stimulus within the domestic market. They were badly suited to the economic crisis of the 1970s, which was characterised by inflation and stagnation with the former aggravated by Keynesian demand stimulus.That crisis generated two connected intellectual responses: Milton Friedman’s monetarist revolution; and Mancur Olson’s theory of special interest groups.
Thursday, 27 September 2012 09:50

WTO Public Forum to discuss “Is Multilateralism in Crisis?”

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WTO Press releaseThis year's WTO Public Forum will debate:formulating new approaches to multilateral trade opening in areas such as trade facilitation;addressing 21st-century issues and identifying areas in need of new regulations; andlooking at the role of non-state actors in strengthening the multilateral trading system.These themes and others will be analysed at 44 sessions over the three days of the forum. The results emerging from these discussions will provide useful guidance on how the WTO can better address the complex trade issues of the 21st century.Micheline Calmy-Rey, former President of the Swiss Confederation, will deliver the Forum's inaugural speech.The sessions include the following debates:Opening Session: "Is Multilateralism in Crisis?" Speakers are WTO Director-General Pascal Lamy; Ms Micheline Calmy-Rey; H.E. Sheikha Lubna Al Qasimi, Minister for Foreign Trade, United Arab Emirates; Mr Nicholas Staheyeff, Vice Chairman and CFO, eBay International; and Hon. Mr Ricardo Lagos, Senator, The Senate of Chile. The session will…
Wednesday, 26 September 2012 00:00

Brics development bank underway?

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The idea for a Brics development bank could hold great benefits for Africa by using South Africa as a gateway to the continent; but it must be aligned with the private sector agenda or it will become a burden on the state, said expert panellists at a debate hosted by research and strategy consultants Frontier Advisory.The debate took place on 25 September at the Johannesburg Stock Exchange in Sandton, north of the city centre, and was moderated by Brand South Africa’s research manager Petrus de Kock.South Africa joined the Brics bloc of developing economies (Brazil, Russia, India, China and South Africa) early last year. The aim behind the creation of a Brics bank is to have a development-focused finance institution to support and drive commerce between the Brics economies.According to the experts on the panel, the idea of a Brics development bank is politically driven and could remain just an…
Wednesday, 26 September 2012 00:00

Doubt over Brics bank’s economic feasibility

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THE idea of a Brics development bank is politically driven and could remain just that — an idea — unless some sound reasons for creating it are produced without delay, expert panellists at a seminar in Sandton said last night. The precise purpose of such a bank is the first tough question that needed to be answered, they said. "Politically it’s very attractive to have a B rics development bank. But, I haven’t yet found a good economic reason why we need such a bank," Lumkile Mondi, chief economist at South Africa’s Industrial Development Corporation, told the audience at the Johannesburg Stock Exchange. "On this debate, I’m a dissenter," he said.SA joined a loose existing group made up of Brazil, China, India and Russia to create Brics early last year. Jointly the countries have a population of 3-billion and account for about one quarter of the world’s gross domestic product. SA is…
Compiled by the Government Communication and Information System Date: 21 Sep 2012 Pretoria - Cabinet has approved the draft Brics (Brazil, Russia, India, China, South Africa) Strategy. "Cabinet approved the draft Brics strategy which builds on the fourth Brics Summit outcomes. The strategy is to guide the engagement of South Africa by identifying objectives and opportunities within this group of member countries. It unpacks the three levels of engagements at a domestic, regional and international level," said Phumla Williams, acting Cabinet spokesperson on Friday, following this week's ordinary Cabinet meeting. Cabinet further approved an Inter-Ministerial Committee to provide direction on the preparation for hosting the 5th Brics Summit in South Africa in March 2013. In March, President Jacob Zuma welcomed the Delhi Declaration issued by leaders of Brics, saying it will invigorate their collective resolve to find global solutions to global challenges. The declaration was issued after the fourth Brics…
Johannesburg: When the leaders of the five BRICS countries met this year in March at their Fourth Summit in Delhi, India, they declared that: “BRICS is a platform for dialogue and cooperation amongst countries that represent 43% of the world’s population, for the promotion of peace, security and development in a multi-polar, inter-dependent and increasingly complex, globalizing world. Coming, as we do, from Asia, Africa, Europe and Latin America, the transcontinental dimension of our interaction adds to its value and significance”.It is in this context that we should understand the global socio-political and economic framework of BRICS.  Since coming into being as a formal entity in June 2009, the BRICS have introduced new dynamics in global geopolitics.This morning I have been requested to focus on “South Africa’s Role in the BRICS, and its Benefits to Job Creation and the Infrastructure Drive in South Africa”.Let me firstly say that I have…
Debating the future of the BRICS with South African policy makers and academics radically differs from anything one can expect to hear during discussions in Brazil, Russia, India or China. The latter are ebullient and brimming with self-confidence, certain that an irreversible process of multipolarization has begun, giving birth to a system in which they will be indispensable pillars and agenda-setters. During recent meetings at the South African Department of the National Treasury in Pretoria and a workshop organized by the South African Institute of International Affairs (SAIIA), on the other hand, I was struck a far more restrained and at times even introspective tone that marked the conversation.Economically, South Africa is by far the smallest BRICS member. While it boasts Africa’s largest GDP, it does not figure among the world’s largest twenty economies and it is a G20 member largely to increase the group’s regional representation and global legitimacy.…
Since South Africa’s accession to the BRICS group of emerging powers in 2011, there has been sustained interest in South Africa’s role in the shifting dynamics of global economic governance. Given that South Africa will be hosting the BRICS Summit in 2013, this attention will only increase throughout in the coming year.On 6th August 2012 the South African Institute of International Affairs and the Centre for Human Rights at the University of Pretoria convened a symposium of eminent researchers and policy-makers from Africa and the BRICS countries, to exchange views on the interests of the BRICS, especially as it relates…
At the beginning of this century the UN proposed eight “Millenium Development Goals” that it hoped the international community would achieve by 2015. They include halving global poverty and hunger, improving maternal and child health, combating HIV/AIDS, and promoting universal education, gender equality, and environmental sustainability. As we approach 2015, the international community has begun to ask what should happen next.
Wednesday, 25 July 2012 00:00

FOCAC’s Present and its South African Future

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The closing of FOCAC V, the triennial ministerial meeting between China and Africa, marked yet another milestone in the continent’s most dynamic relationship. While the headlines rightly focused on Beijing’s offer of US$20 billion in loans to support Africa and the key role that outgoing President Hu Jintao played in fostering the FOCAC agenda, there were other significant aspects of the event that deserve as much attention.Following in the tradition of previous ministerial meetings, the fifth FOCAC (Forum on China-Africa Cooperation) served as a setting for celebrating the accomplishments of the last three years, a stage for expressing common purpose on a host of international concerns and a platform for establishing priorities for the next three years.  And, finally, the passing of responsibility for organising the next FOCAC ministerial to South Africa promises to provide an unprecedented opportunity for its policy making community to make a distinctive mark on one…
A new report by the World Economic Forum (WEF) finds that global trade rules are outdated, in light of changing realities.The study, called The Shifting Geography of Global Value Chains: Implications for Developing Countries and Trade Policy was conducted by the WEF’s Global Agenda Council on the Global Trade System. It examines how shifts in global value chains are likely to impact on developing countries and international trade policy.The most important implications concern unilateral trade policies, or what countries can do for themselves. Central to this is reducing transactions costs in order to attract value chain investments, and investing in horizontal policy measures such as education, infrastructure, and efficient logistics in order to provide the right enabling environment. Furthermore, the report highlights that the rules of the World Trade Organization (WTO) are based on the notion that a firm in one country sells a product to customers in another, whereas…
Just before the G20 leaders began their summit in Los Cabos on June 18, 2012, those of the BRICS of Brazil, Russia, India, China and South Africa met among themselves to give the broader G20 and the entire global community a big boost. It was only the second time they had done so at a G20 summit, and the first at which they issue a statement (see Appendix).They showed solidarity with a crisis-afflicted Europe, promising to help "find co-operative solutions to resolve this crisis." To back their bold words with real money they “agreed to enhance their own contributions” to the International Monetary Fund (IMF), thus building a global firewall as a second line of defence should the rich Europeans prove unwilling or unable to take care of their own European Union family members. They further bolstered global financial stability by agreeing to ask their finance ministers and central bank…
Wednesday, 13 June 2012 00:00

South Africa and the 'Currency Wars'

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South Africa's currency debate focuses on whether to emulate China and other predominantly East Asian countries by pegging the Rand. Import competing manufacturing companies and associated trade unions plus industrial policy advocates in government advocate pegging the currency at 'competitive' levels. Many macroeconomists in the banking sector, Treasury, and South African Reserve Bank are wary of inflationary consequences.
Indian President Pratibha Patil was in South Africa this month, accompanied by a business delegation that is looking to explore the potential for opportunities. President Jacob Zuma stressed the importance of enhancing relations with India in both infrastructure and trade.Such state visits, when used effectively, can work to increase trade through increasing the understanding of the market, assisting in the identification of new business opportunities, and proving a platform for networking. The two countries have set an ambitious target of $15 billion (R121bn) in bilateral trade a year by 2014, and they are in the process of negotiating a preferential trade agreement (PTA). Investment in infrastructure development and such increased levels of trade, as called for by Zuma, can be facilitated through the PTA if it is designed effectively.With its large consumer market and growing economy, a trade agreement with India should provide an extra impetus to the rapidly increasing…
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