The agreement in principle between the Brics group countries (Brazil, Russia, India, China and South Africa) to establish a joint development bank represents significant progress for the loose alignment. This agreement was announced at the Brics summit in Durban late last month. “I was sceptical about a Brics bank,” admitted State Bank of India regional head of Africa and CEO Dr Mathai Vaidyan. “But, for the first time, they [the Brics leaders] came to the conclusion it was feasible and viable.”

“Brics is a phenomenon of the 21st century – so multifunctional, multilevel, that it’s very difficult to evaluate results [just] weeks after the summit. From my point of view, one of the good results – because we deal with a very, very difficult and new type of organisation, it is very difficult, for example, to establish a development bank. And, fortunately, it has happened,” said the Southern African representative of Russia’s develop- ment bank, Vnesheconombank, Alexander Tikhomirov. “It is better to create a good one [bank] later than a bad one sooner. [Brics development bankers] became closer to each other and understand more of each other.” “We believe that this kind of agreement between the [national development] banks will lay the foundation for enhancing trade, enhancing finance, enhancing investment,” affirmed Development Bank of Southern Africa (DBSA) group executive Tshokolo Nchocho.

“We are trying to change the West’s dominance in money things,” asserted Tikhomirov. Indian High Commissioner to South Africa Virendra Gupta pointed out that Brics was focused on the global financial infrastructure and the need to reform it. The agreement to set up the Brics development bank represented significant progress. “The idea is not to set up something opposed to the IMF [International Monetary Fund] or World Bank,” he stated. “In fact, I would not be surprised if the IMF and World Bank would become involved, in a small way [in the Brics bank]. It’s not opposed to anyone. Some countries might try and drive it that way, but that won’t get consensus. The Brics development bank will be focusing on development projects within the Brics countries. There will be a window which will allow the bank to fund projects in developing countries, including in Africa.”

Overall, the summit was a success, although this was obscured by exaggerated expectations, especially in South Africa. “Undoubtedly we, South Africa, are the most enthusiastic of the Brics,” averred Frontier Advisory CEO Dr Martyn Davies. “The smallest, but the most enthusiastic.”

“Our perspective is indeed that the summit was a success,” opined Brand South Africa CEO Miller Matola. “Perhaps there might have been huge expectations, but the kind of decisions that were taken, give meaning to the Brics – giving substance to the things that brought us together.” “This initiative of Brics – in our view, we need to accept it is in the formative stages,” argued Nchocho. “The design elements of the Brics mechanism [are] coming together. The foundation [is] taking shape.” “The summit which just happened in Durban will go down in history,” enthused Vaidyan, because of the foundations that it laid.

“For development to happen, over the long-term, it requires partnerships,” highlighted Nchocho. “There is a need for banks, capital markets, for governments. Such partnerships need to be effective.”

Another of the summit’s decisions was to create a Brics Business Council. “The Brics Business Council, which provides a platform [for business] – that’s very, very important,” affirmed Gupta. “The group is moving from being a dialogue forum to a functional forum. Brics is essentially a platform, a networking platform.”

According to JSE director: government and international affairs Geoff Rothschild, the summit was a “wonderful opportunity to meet with businessmen [and] interact” as well as meet with senior government officials from the Brics countries, responsible for trade. “There were meetings of the Brics [stock] exchanges, outside of the meeting [summit].”

Davies, Gupta, Matola, Nchocho, Rothschild, Tikhomirov and Vaidyan were all participating in a recent seminar on the outcomes of the summit, organised by consultancy Frontier Advisory and hosted by the DBSA.