This year South Africa is hosting the BRICS summit, which will most likely offer excellent opportunities from the business perspective. With the BRICS Summit approaching, not only the political, but also the business society of all the member states are looking forward to meeting on its margins.
International Affairs Journal has an honour to talk about that with Dr. Stavros Nicolaou who is the Porfolio Head of Aviation and Manufacturing in South African BRICS Business Council (SABBC) and Group Senior Executive of Aspen Pharmacare Holdings Limited - Africa’s largest pharmaceutical manufacturer.
Dr. Stavros, you are one of the representatives of the successful African businessmen and Head of two so important sectors in SABBC. According to you, why the African business society is so interested in cooperation with BRICS partners?
A couple of reasons. I think the first is that the BRICS countries represent very sizable markets. In global terms BRICS represents 40% of the world's population, in purchasing power parity terms 32% of global GDP. So these are very big markets. If you're able to access these markets there is a significant economic growth opportunity. So that's the first reason.
The second reason is that the BRICS countries offer significant innovation technology and partnership opportunities with African countries, companies, business people and sectors. So collaboration at a technology is a very important consideration.
The third thing is that Africa has begun a process of aggregating its markets through the African Continental Free Trade Area. In simple terms, it will aggregate volumes of the continent to give Africa by the scale and leverage and a much bigger African market is also more piety to the BRICS countries. So it presents an opportunity not only for Africa to sell its products other than just raw materials or sub-raw materials but it also presents an opportunity the other one around for the BRICS countries to sell their products to Africa.
According to you, which areas of cooperation are the most promising for African businessmen today?
If we analyze the trade patterns right now South Africa and Africa with the BRICS countries of course Africa runs a significant trade deficit with the BRICS countries. We’re very interested in investment from BRICS into Africa.
Africa because of the characteristics of its economies is still very reliant and continued to export raw materials, minerals to the other BRICS countries. But in parallel Africa has an ambition to develop its infrastructure. I mean the healthcare sector. So particularly when it comes to healthcare we saw in the last pandemic that Africa was subjected to force healthcare inequalities and of course what that meant is that lives and livelihoods were destroyed on the continent that couldn’t be saved and the continent was hardest hit by COVID.
The other opportunity is to collaborate in those sectors that require infrastructure development, logistics supply chain and we need to interconnect the continent. It's a very vast continent, it's a massive continent with significant geographic challenges when it comes to supply chain and logistics. So that's an opportunity. But then there's also an opportunity to assist the continent to tributes manufacturing performance and to begin to industrialize the economies in these countries in Africa. So no continent or country can be economically and socially stable without that and this is an underlying fundamental economy that is growing and industrialization is a way out of a bad economy. That's a focus for future of the continent.
Lastly we should never forget that Africa is a population of 1.3 billion people right now. The population is expected to double by 2050 and Africa will be not any a vastly populist continent but also one of a very young population and young people are dinamic, they drive a very different set of economic activity and this presents a further opportunity for Africa Future.
What South Africa can propose to the bloc partners, including Russian ones from economic prospective?
South Africa is the smallest trading partner, the smallest economy in BRICS. However South Africa is the most diversified economy in the African continent, it also has the most developed industrialization, manufacturing, very good banking and financing systems and institutions. So South Africa offers a gateway for BRICS countries and into Africa. It also says that South Africa offers a market itself. But more importantly I think South Africa does lead into certain areas and provide and presents partnering opportunities both ways including innovation technologies know-how. I think South Africa offers extensive opportunities to its partners.
What events do you hold for potential business partners from the BRICS member states during the summit?
As BRICS Business Council we work together with the Department of Trade, Industry and Competition of South Africa. We arrange 31 business events. So there are many highlights. But let me mention 3 that I think are quite important. The first one is the the BRICS Business Forum which takes place on Tuesday the 22nd of August. It is a particular highlight because it will be attended by thousands of business people from all five BRICS countries and even delegates and business people from Africa. Number two, the heads of states will present from three o'clock to five o'clock on Tuesday. Then there will be five very important panel discussions which deal with an African Continental Free Trade Area, with industrialization and energy. There are many important topics, so that's certainly highlight. And another highlight for me is that the business council is ten years old this year. It was formed in 2013. And much has been achieved. On Sunday we have a closed event to celebrate this and it will recognize the progress that has been made by these five economies over the ten year period. And in the final probably the most important for the council is that we will get an opportunity to hand over the report to the five heads of state. Report will be handed over to the BRICS leaders as well. So that's a particular highlight because they cover the work and activities of the Council for the last period of time.
In your opinion, can the current geopolitical situation somehow affects the effectiveness of the summit.
I think we represent the business community. We’re less interested in geopolitics. The best way to come to any geopolitics is to build strong economies. As a Business Council and as a South African business community we favor a multilateral approach to trade, investment, business and economies. We all are concerned the world is becoming a little binary in its approach, a little polarized and I think we've seen what happens when economies become isolated and polarized. As the South African business community we are agnostic as to what happens. Geopolitically I think what we’re looking for is the best opportunities, business opportunities for South Africa. Whether it's in the West, the East or the South we trade equally with West, East and South. The South is becoming an interesting opportunity because of the African Continental Free Trade Area. It’s becoming a really important aspect. So business would like to see multilateralism growth, economies growth. The best way to ensure political stability anyway is to have strong economies.
What advice or recommendations can you give to businessmen, including Russian ones, who would like to establish mutually beneficial relations with South Africa within the BRICS and with the African continent?
My advice would be to do your homework first. See the sectors and opportunities that all complementary reside. So what I mean by that is we all have our own particular strains. Some of our sectors are stronger than others, same with Russia some sectors are stronger than others. So I think the homework that needs to be done is to identify those sectors as good services and products. We enjoy a particular strength and then to look to identify partnership opportunities and then executing on those partnership opportunities to find the areas of complementarity. And don’t forget South Africa is a gateway to Africa. So than look at it not only as South Africa market but more broadly at the continent.
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