South Africa signs deals with Russia, China
DURBAN, South Africa – South Africa signed a raft of agreements with Russia and China on Tuesday, from maintenance for Russian helicopters in Africa to exchanges of solar and nuclear technology, as leaders of the five-nation BRICS forum of emerging market powers prepared to strengthen cooperation and reduce dependence on the West.
Leaders of Brazil, Russia, India, China and South Africa – the five countries that the World Bank says are driving global economic growth – arrived in South Africa’s coastal resort of Durban for a two-day summit to start Tuesday evening.
Brazil and China signed an agreement Tuesday to do up to $30 billion of trade in their local currencies, a step toward cutting dependence on the U.S. dollar and euro. Brazil Finance Minister Guido Mantega said that would account for nearly half his country’s annual $75 billion trade with Beijing. He said Brazil hopes to promote such arrangements with other countries.
President Xi Jiping made the BRICS forum his first summit as China’s new leader, indicating the weight he gives to the economic bloc that accounts for 27 percent of global purchasing power and 45 percent of the world’s workforce. The World Bank says the BRICS nations are driving 50 percent of global economic growth as Western economies flounder.
Brazil, Russia, India and China established the forum in 2009, amid the economic meltdown in the West, saying they were uniting to work toward a more equitable world economic order and one that makes them less dependent on the volatility of the U.S. dollar and the euro. South Africa joined two years ago.
This week’s fifth BRICS summit is concentrating on Africa with the theme “BRICS and Africa: A partnership for development, integration and industrialization,” and South Africa has invited 15 African leaders to join the discussion.
Talks about creating a BRICS development bank as an alternative to the Western-dominated International Monetary Fund and the World Bank made good progress Tuesday, Finance Minister Pravin Gordhan of South Africa said. Leaders will announce details on Wednesday, he said.
Member states have basically agreed on setting up a bank with seed capital of $50 billion, but how much each country would contribute and the voting structure of the board have yet to be defined, Brazil’s foreign trade minister, Fernando Pimentel, said in a pre-summit teleconference last week.
Analysts say other BRICS members must beware of China, the world’s second largest economy and biggest importer of oil, dominating the forum.