IDEALS

JOHANNESBURG, (Sep. 19, 2009) IPS/GIN – Developing countries are
preparing to stand together on critical issues at the G20 heads of
government meeting in Pittsburgh Sep 24-25.

But Southern solidarity may need to move beyond the strategic
common front presented at such summits to include a strengthening
of continuing ties.

A big test case could be IBSA – a grouping of India, Brazil and
South Africa, which brings together major developing democracies
across three continents.

Many believe IBSA holds greater possibilities than does BRIC, the
grouping of Brazil, Russia, India and China, which is seen more as
a strategic negotiating coalition than as a solid bloc of rapidly
emerging economies.

“I think IBSA is an association of countries which is built on a
very solid reality,” Ron Davies, South African trade and industries
minister tells IPS.

“That we are the bigger developing countries on different
continents, and that we have a series of cooperation agreements
which at least for South Africa have some real meaning.”

But amidst his enthusiasm for new South-South links, Davies
acknowledges it’s early days yet. “I think there is work ahead to
consolidate and deepen IBSA. And that’s one of our very significant
priorities here in South Africa.”

For the moment, the immediate sense of presenting a single
negotiating face is clearer than the future dimensions of the
trilateral initiative.

“To some extent I think IBSA is a bit of a romantic idea in the
sense that linking up the three countries through common air links
or shipping links is a long way into the future,” says Prof.
Stephen Gelb, executive director of The Edge Institute, an
independent economic policy centre in Johannesburg.

“I think there is a lot of scope for political alliances in
multilateral fora like the WTO or the United Nations but actual
links between the three countries lie somewhere in the future.”

And that push will come, Gelb says, not at political gatherings
but in company boardrooms.

“Business links that happen, or would have happened, would help to
build the IBSA idea rather than the other way round,” he says.

“Businesses find each other when they need (to), they find markets
that help to create linkages that then take on a political
expression.”

What the three countries need is more trade with each other, and
joint activities in third markets, Gelb says. “What I think is very
important to make it a reality is that links between each pair of
countries becomes much more substantial,” he says.

One instance could be the merger deal being negotiated between two
major telecom companies, Bharti in India and South Africa-based
MTN, looking to create a merged entity worth 23 billion dollars
with more than 200 million subscribers.

The merged company would service markets in Africa, the Arab world
and in Asia. Several managers are already speaking of looking
further afield to Latin America, where Brazil, the third pillar of
IBSA, has the potential to be a big market.

There are several other agreements being worked out between
companies from the three countries, and trade among the three is
picking up rapidly.

Visiting Brazil in early September in preparation for October’s
IBSA Business Summit, Indian external affairs minister S. M.
Krishna underlined common opportunities, and also common threats
arising from the financial crisis.

The crisis will push millions in developing countries back into
poverty for another generation, he said ahead of the summit in
Brasilia. IBSA, he said, “can be a game-changer in today’s
circumstances.”

IBSA is now considering ways of opening up opportunities beyond
the three-nation base. Officials are exploring increased trade
links now between India and MERCOSUR (the South American group
comprising Brazil, Paraguay, Uruguay and Argentina), and between
India and the South African Customs Union.

The three IBSA countries have a population of close to 1.5 billion
(mostly in India), and a combined GDP of about 3.2 trillion
dollars, officials say. One way of beating the crisis arising in
developed countries, they say, is for IBSA nations to sell far more
to one another.

Foreign ministers Celso Amorin of Brazil, Krishna of India and
Maite Nkoana-Mashabane of South Africa have set a target more than
doubling trade among the three countries to 25 billion dollars by
2015. The total trade among the three last year was 10 billion
dollars.