South Africa signs deals with Russia, China

AP News
Posted: Mar 26, 2013 4:01 PM
South Africa signs deals with Russia, China

DURBAN, South Africa (AP) — 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.

The conference comes as some ask whether Africa is sliding into a neo-colonial relationship with China, which is basically buying the continent's raw minerals and oil while exporting it manufactured goods, following a pattern set when Africa was colonized by European nations. China years ago overtook traditional trade with Europe to become Africa's biggest trading partner.

Trade between BRICS countries ballooned to $282 billion last year from $27 billion in 2002, much of it on the back of Chinese trade.

"The importance of BRICS can never be over-emphasized," South Africa's trade and industry minister, Rob Davies, told a trade forum ahead of the summit that is being attended by 600 companies from member states. He said South Africa hosts 31 projects by 25 companies from BRICS nations totaling R12.6 billion ($1.4 billion).

Russian President Vladimir Putin said trade with South Africa had increased by 66.3 percent last year and was worth nearly $1 billion.

At a news conference, Putin and South African President Jacob Zuma watched ministers and company CEOs sign a slew of agreements, including one creating the first accredited African facility to maintain and service Russian helicopters. South Africa's state-owned Denel Aviation said it will start by servicing Mi-8s and Mi-17s, both of which can be used in civilian or military settings for transport or as helicopter gunships.

Denel said there are about 600 helicopters in sub-Saharan Africa made by Russian Helicopters, the company with which the deal was struck after two years of negotiation. Denel CEO Mike Kgobe told The Associated Press the two nations' BRICS membership had eased the way.

Putin said the two countries also were discussing joint production of a light, mutli-purpose aircraft.

He said one of the agreements would allow South Africa to use Russia's state-of-the-art technology to build its own atomic energy industry and well as solar panel factories. South Africa already has one nuclear power plant.

Zuma and Putin were leaving the joint news conference when they were asked whether they would consider using their influence to persuade Syria's President Bashar Assad to allow unimpeded U.N. humanitarian access across all Syria's borders. Leading activists from all the BRICS countries have sent a joint appeal on the subject to the leaders.

Zuma ignored the question.

Putin, in a throwaway line, said "We will think about it." Earlier, he said the leaders will "coordinate our actions to work for a peaceful resolution to the Syrian crisis.

BRICS countries oppose foreign intervention in Syria and accuse the West of trying to force regime change.

Russia, China and South Africa have voted against U.N. Security Council resolutions on Syria, where the U.N. estimates 70,000 people have been killed since the civil war began two years ago.