Africa, Development & Aid, Economy & Trade, Eye on the IFIs, Global, Global Geopolitics, Global Governance, Headlines, IBSA, Trade & Investment, Trade and poverty: Facts beyond theory

Questions Abound Over Whether IBSA and BRICS Can be Complementary

Servaas van den Bosch

WINDHOEK, Mar 24 2011 (IPS) - The IBSA Dialogue Forum, a South-South alliance of India, Brazil and South Africa, could be better suited to the needs of Southern Africa for South-South cooperation than the BRICS (Brazil-Russia-India-China-South Africa) loose alliance of emerging economies. But Southern Africa will have to beef up its markets to truly benefit.

In the wake of China’s invitation to South Africa to join BRIC, Beijing lobbied India to shut down IBSA, arguing there is unnecessary overlap with BRICS. To deliberate this issue, China has proposed a BRICS-IBSA summit in Hainan, China, in April.

So far New Delhi has been deaf to Beijing’s arguments. According to the Indian press, India prefers to have a forum of its own, without interference from dominant neighbour China.

South African President Jacob Zuma also told the South African parliament on Mar. 17 that Pretoria values its IBSA membership both “for enhancing our trilateral partnership with India and Brazil” and as “an important pillar for strengthening the muscle of the South in global affairs”.

He added that, “we believe that the IBSA will get a better balance, and become even stronger, with South Africa now as a member of the BRICS, more especially since the mandates of BRICS and IBSA complement each other. It is important to note also that IBSA and BRICS provide a link with the African continent for the two groupings, and strengthen our position as a gateway to Africa.

“The groupings offer a big lucrative market for our goods and services and lots of opportunities to implement our Industrial Policy Action Plan and the New Growth Path framework,” he concluded.

However, South African trade analyst Dot Keet argues that, “IBSA is a more appropriate platform for South Africa and the region than BRICS. It is a more substantive partnership with a real focus on each other. The question now, of course, will be whether BRICS will conflict, contradict or complement IBSA.”

Sanusha Naidu, research director of communication network Fahamu’s “emerging powers in Africa” programme, agrees: “In many ways there is uncertainty about what members can get out of BRICS and what the alliance means in the context of wider cooperation.

“IBSA, on the other hand, has a clear identity. The trilateral alliance has been around longer and can probably achieve more of its goals than BRICS. IBSA also espouses a very broad set of principles that the members hold in common.

“Looking at IBSA summits there is a broad level of engagement, whether on political issues like the conflict in Libya or global governance issues. There is common consensus on many issues, like the process of regional integration in the respective regions; piracy in trade; and governance reform of multilateral institutions. IBSA also has a shared vision of democratisation,” Naidu notes.

At a Mar. 7-8 meeting of IBSA foreign ministers in the Indian capital, the bloc showed fresh resolve in deepening collaboration. A statement after the meeting read, “in this rapidly changing global order, the ministers underscored the increased strategic importance of IBSA as a forum of developing country democracies from three different continents based on shared values”.

The statement said that these shared values “play a critical role for further strengthening and fostering South-South cooperation and safeguarding and advancing the interests of the South, particularly the reform of global governance”.

IBSA, a direct result of the common stance developing countries took in the World Trade Organisation’s Doha Round of trade negotiations, is also firmly rooted within the states themselves, while BRICS is a construction of Western investment banks.

“IBSA has a personality of its own. It brings together three separate continents, three democracies. BRIC is a conception devised by Goldman Sachs that we are trying to put life into,” Indian Prime Minister Manmohan Singh said a few months back.

Because of this, trade analysts argue that IBSA compares well with other platforms in the Global South that cooperate on concrete topics, such as the Shanghai Cooperation Organisation that, among others, works on energy issues; and the Macau Forum that promotes trade between Portuguese-speaking countries and China.

During the ministers’ meeting in New Delhi, the staggering range of issues under discussion included a reiteration of commitment to “an open, transparent and rule-based international trading regime” and “called for an early conclusion of the Doha Development Round with a balanced outcome which ensures the development needs of the developing countries, especially least developed countries”.

How much IBSA will mean for Southern Africa as a region depends on whether it can successfully diversify the heavily EU-reliant trade agenda, contend analysts. “IBSA served its purpose in establishing trade agreements between the region and India and Brazil,” declares Namibian independent trade analyst Wallie Roux.

“A preferential trade agreement between India and the Southern African Customs Union is in the making and an agreement with the South American Mercosur (Southern Common Market) has been in place for a while.

“However, these agreements could be one-sided as we essentially do not have the capacity to service the Brazilian and Indian markets with exports,” says Roux, adding that the Southern African Development Community still struggles with getting its internal market to function.

On the import side, traders in the region also feel the limitations of their small economies. “At the moment I get all my cloth from wholesalers in South Africa,” says Namibian textile merchant Navin Morar. “Sure, I can get it directly from India, but they will insist on a minimum of several thousand metres in perhaps 12 different colours. How am I going to sell that in this small economy?”

“We should do more market research on which products would be really relevant in our South-South trade,” opines Roux. “Often our perception on this is completely wrong. Who wants Namibian beef in India, which is largely vegetarian? On the other hand, there is a huge potential in Indian generic medicines to replace expensive imports from the EU and the U.S..”