Malawi is adequately represented in the Brics and stands to benefit from the bloc, an expert in economics and trade has said.
Brics—an acronym for the five emerging economies Brazil, Russia, India, China and South Africa, met last week in Durban, South Africa to discuss, among others, trade and development among its members and the rest of the developing world.
The Brics specifically discussed the setting up of a development bank that would parallel the World Bank and the International Monetary Fund (IMF), discussed the World Trade Organisation (WTO), the stalled Doha Development agenda and structural and development support among the members and other developing economies.
Chancellor College economist professor Ben Kaluwa, in an interview, said the coming together of the five emerging economies was a good development.
“Malawi is strongly represented by South Africa and our interests will be taken care by its representation. South Africa has been aggressively facilitating trade and implementing a development agenda in the Southern Africa Development Community (Sadc) and the Tripartite Free Trade Area and, thus, it will certainly push for our interests in the brics.
“Malawi has also trade ties with the other Brics members such as India and China and thus we will greatly benefit from this arrangement. We will benefit in terms of technological transfer and increased trade,” he said.
But Kaluwa said although India, China, South Africa and Brazil are classified as developing economies, they are technologically advanced and Malawi will certainly benefit from the association.
Malawi has trade ties with each of the five members of the Brics.
According to International Trade Centre (ITC) report on Non Tariff Measures released recently, in 2010 Malawi had 37 percent of its imports from Sadc, which predominantly includes South Africa, 10 percent came from China while nine percent from India.
In terms of exports, Malawi in 2010 exported 22 percent to Sadc, three percent to China, one percent to India and Russia respectively.
However, according to the report, the European Union (EU) still remains Malawi’s major trading partner accounting for about 41 percent in exports and about 15 percent in imports.
But the report notes that Malawi experiences bottlenecks when trading with Europe in contrast to other trading partners.
This, therefore, tips the Brics as an alternative market for Malawi. ITC notes that 28.6 percent of interviewed companies reported one or more burdensome NTMs in this market; it is a relatively difficult region to access
ITC notes that Asia, especially China, is a growing market for Malawi’s exports and adds that for China and the Russian Federation, two of the largest markets, no burdensome NTMs were registered.
In joint communiqué, the Brics trade ministers recognised the importance of sustainable industrial development in each of the member countries, in Africa and other developing economies.
“Africa’s development prospects are vastly improved, that it is a continent of growing economic opportunity, and that it is increasingly a destination of choice for investors. Africa is now the second fastest growing continent in the world with enormous mineral and agricultural resources, growing markets and a young and dynamic population.
“This requires greater effort and support to the regional and continental integration agenda to integrate markets, spur the development of cross-border infrastructure and diversify production bases,” reads the communiqué in part.
The Brics trade ministers further recognise the growing cooperation between individual Brics countries and African countries, and are thus committed to support Africa’s development agenda by strengthening their cooperation in the search for synergies for investment in Africa’s infrastructure, agriculture and manufacturing sectors.
The Brics trade ministers also recognise the importance of the stalled Doha Development agenda, whose lychpin is agriculture.
The Brics agreed to strengthen their collaboration to ensure that any meaningful deliverables reached by the Ninth WTO Ministerial Conference in December 2013 are balanced and addresses key developmental concerns of the poorest such as Malawi and most vulnerable WTO members.
On the development bank which is seen as a direct challenge to the way the IMF and the World Bank do their business, the Brics have agreed that it will focus on funding infrastructure and development projects not only in the Brics countries but also in other emerging economies and developing countries.