00:00 Thank you very much indeed Mr. Minister for that kind introduction.
00:07 Your Excellencies, ladies and gentlemen, it's a tremendous privilege to present
00:14 this high level feedback on the BRICS Business Forum 2023.
00:19 Today, guided by its theme of making accelerated growth and sustainable
00:26 development a reality, the BRICS Business Forum has held sharply commercial
00:33 and highly dynamic sessions attended by entrepreneurs, policy makers,
00:38 business people, and indeed academics from across a number of the member
00:43 countries and beyond. Talking of commercial dynamism,
00:49 as the Minister has alluded, it is very fitting that the BRICS Business Forum
00:53 is taking place right here in Santon, here in Johannesburg, the capital of Gauteng.
00:59 Gauteng generates about 35% of South Africa's GDP and a large proportion of that
01:06 is generated right here. And it is generated by South Africa's
01:12 sophisticated and successful large corporations, medium sized enterprises,
01:17 and indeed SMEs. This year, for instance,
01:22 Standard Banks analysts think that South African listed equities will deliver
01:25 average earnings per share growth of between 15 and 20%.
01:30 To put it in perspective, other emerging markets are looking at minus 3%
01:35 for the same period. And talking of South African corporations,
01:40 relationships, travel, history, and trade, in the words of Minister Patel,
01:46 "I had the good fortune, ladies and gentlemen, and great honor of speaking
01:50 this morning on a panel with Chairman Chin of the State Grid Corporation of China,
01:56 as well as Mr. Ricardo Santon, President of the Brazilian Association of Animal
02:02 Protein. They spoke about climate change and
02:06 renewables. Words cannot describe the profundity of
02:10 that moment. As it happens, it was a South African
02:14 bank, my employer, the Standard Bank Group, which was the sole financial advisor to
02:19 the State Grid Corporation of China in its 1.8 billion Rand acquisition of 100%
02:26 ownership of seven power transmission companies in Brazil in 2010.
02:31 I mention this, admittedly, because it illustrates that South African corporate
02:36 expertise and connections are an important part of making BRICS into an ongoing
02:42 commercial reality. South Africa certainly has its fair share
02:48 of challenges, and I would rate unemployment and inequality as the
02:52 deepest and worst of these. The wealth of Santon is within easy
02:58 walking distance of the deep poverty of Alexander, a painful contrast that can be
03:04 found in all of the BRICS countries, but one that is also highly conducive to
03:09 innovation in the service of inclusion. For instance, to South African ears,
03:16 the Brazilian financial services innovations that we heard about today
03:19 sounded all too familiar. So there are serious challenges here in
03:26 South Africa, but we also have immense strengths and competitive advantages.
03:30 As well as the corporations that I have mentioned, these strengths include a
03:36 strong rule of law, which guarantees that contracts will be observed and that
03:41 commercial disputes will be settled fairly.
03:44 They include our freely floating currency, open capital account, extremely
03:49 skillful and credible central bank, and deep and liquid capital markets.
03:54 These guarantee that returns on investment are and will remain quickly
04:00 accessible in the currency of the investor's choice.
04:03 More competitive advantages arise from what a Chinese panelist called South
04:10 Africa's celebrity products, Mr. President, which include rooibos tea, wine,
04:16 and unique tourist experiences. This brings us to another of South
04:25 Africa's strengths, which is South Africa's openness for the business and
04:29 tourist traveler. People from all of our major trading
04:34 partners enter South Africa either visa-free or with an e-visa.
04:39 Further, liberalization of travel and greater encouragement of air links
04:45 between the BRICS countries and our major trading partners is certainly warranted.
04:50 Perhaps above all, South Africa's competitive advantage emerges from our
04:56 well-developed trade and investment network with our fellow Africans.
05:00 China is indeed Africa's largest trading partner.
05:04 What is sometimes missed, however, is that South Africa is the second largest
05:10 exporter to the rest of our beloved continent and its fourth largest import
05:15 partner. Of course, investors from the BRICS and
05:20 worldwide do very much want to buy into Africa, given our continent's uniquely
05:26 favorable demographics, immense natural resources, potential for low-cost
05:31 industrialization, and increasing market integration under the Africa Continental
05:36 Free Trade Area. For all these reasons, according to the
05:41 IMF forecasts and on current trends, it is likely that sub-Saharan Africa will be
05:47 the fastest growing region of the world by 2030.
05:50 Standard Bank's analysts foresee that intra-Africa trade could double under the
05:57 AFCFTA and that there would be a $3.4 trillion investment opportunity in Africa
06:04 infrastructure emerging from this rapid growth.
06:08 The bottom line is simple. If investors from BRICS and worldwide
06:14 want to buy into Africa's enormous growth potential, the place to start is right
06:19 here in the square mile of Sandton.
06:23 Thank you.
06:24 Today's discussions have examined current intra-BRICS trade and investment trends
06:33 and explored tangible solutions to unlocking further trade and investment
06:37 opportunities in the BRICS nations and worldwide.
06:41 Given that the BRICS nations are agricultural powerhouses, agricultural
06:47 production and trade were discussed in detail with many useful comparisons,
06:52 cross and cross learnings emerging. Participants were firmly of the view that
06:58 much room exists for improvement across the BRICS nations regarding agricultural
07:03 trade and market access. The same is true of Africa in general.
07:09 Given the investments and the right policy environment, Africa can become the
07:15 bread basket of the world during this century, what Mr. Mutsepa called the
07:21 American century. Another important topic was the just
07:26 transition. A participant argued a just transition
07:31 refers to shifting towards a sustainable and inclusive economy characterized by
07:36 both social equity and environmental sustainability.
07:40 Renewable energy is an enormous opportunity for public sector collaboration
07:45 and private sector investment and trade right across the BRICS and beyond.
07:51 The theme of entrepreneurship featured strongly.
07:56 A vibrant SME sector is often the most efficient way to create jobs and some SMEs
08:04 become unicorns and even mighty multinationals such as BYD and Tencent
08:10 and China. Of course, for this to happen,
08:14 countries need favorable business environments, strong education systems,
08:19 and the appropriate financing institutions.
08:22 Participants further argued that opening up market access to entrepreneurs across
08:29 all BRICS presents an exciting opportunity to foster trade and job creation and this
08:36 again highlights the value of strong travel links and appropriate visa regimes.
08:42 Within the general theme of entrepreneurship, there was much discussion
08:48 of the role of FinTechs, an area in which BRICS countries have already established
08:53 a great deal of expertise and success. On finance, for SMEs, participants pointed
09:01 out correctly that startups are particularly vulnerable to sudden and sharp increases
09:07 in interest rates. One of the roles for DFIs, therefore,
09:12 is to provide concessional and patient capital for promising SMEs.
09:18 Two essential preconditions for a financial system that is able to support
09:25 both micro enterprises and lower income households are the democratization of data
09:31 and universal access to a stable and credible form of identification.
09:36 India has led the developing world on both access to data and ID, as has Brazil.
09:43 In Africa, Kenya's rapid and sustained growth has also been powered by a
09:50 significant pioneering use of mobile phone to create universal access to finance.
10:01 The forum discussed the international payment system in some detail.
10:06 From an African point of view, a highlight of this conversation was the discussion
10:11 of the Pan-African payment system, which has immense potential to stimulate trade
10:20 and growth by increasing the spend and certainty and reducing the costs of
10:25 cross-border payments in Africa. Participants also debated the question
10:31 of whether a BRICS currency is possible or even desirable, with strong views
10:36 expressed both for and against, with little consensus being reached.
10:42 Seen from a banker's perspective, the debate would probably progress more
10:47 fruitfully if the discourse maintained a sharper conceptual distinction between
10:53 international payments on the one hand and reserve currencies on the other.
10:58 For example, and as the example of the PAPS illustrates, under certain
11:04 circumstances it may be possible to simplify international trade and
11:09 attendant payments using a collection of domestic currencies without any reference
11:14 to any international reserve currency. It's also important to be realistic
11:20 about the necessary characteristics of an international reserve currency.
11:24 These include being a currency issued by a central bank with very high credibility
11:29 in the implementation of monetary policy, being the currency of a state or
11:35 supernational entity with an equally strong track record of fiscal policy
11:39 and meeting its debts, being freely available in large quantities in many
11:44 jurisdictions, and full convertibility at all times.
11:49 This set of characteristics cannot be quickly wished or agreed into existence
11:55 but can only emerge over a multiple of years as a track record of impeccable
12:00 credibility and very wide use is built up.
12:04 Finally, the forum also heard of the pleasing progress that is being made in
12:10 institutional development, setting up sector-specific work streams which allow
12:15 for concentration and focus on areas of common interest in infrastructure,
12:20 manufacturing, energy, and financial services.
12:23 In conclusion, today's discussions have been a very useful step in further
12:31 unlocking the immense potential for trade and investment amongst the BRICS
12:35 member countries. Thank you ever so much for your attention.
12:39 [APPLAUSE]
