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Meeting should boost relationships

2013-03-28 10:09 China Daily     Web Editor: Wang Fan comment

Durban summit is bloc's first on continent, opening possibilities

As incomes in emerging markets increase, Africans stand to benefit greatly from the continent's membership in the BRICS group, a financial analyst said.

"On the whole, annual income and purchasing power of billions of people in the BRICS markets are on the rise, creating increased demand not only for basic goods but also for higher-priced goods," said Christian Wessels, a senior analyst of Roland Berger Strategy Consultants.

As the bloc held its summit in Africa for the first time, expectations arose that the meeting could provide an opportunity for BRICS members and individual African countries to form deeper relationships.

On March 19, President Xi Jinping said China will continue to staunchly support development in Africa, and BRICS has become an important force in safeguarding peace and promoting development.

"Cooperation among BRICS countries can help build a more balanced world economy, improve global economic governance and promote democracy in international relations," Xi said.

Wessels said consumer spending in the developing world will grow in the next eight years from $14 trillion to $22 trillion. Per capita consumer spending is forecast to reach $3,319 a year by 2020.

"In particular, BRICS countries, excluding South Africa, will see consumer spending grow from $7 trillion to $11 trillion, contrasted with Mercosur countries (South America's Southern Common Market) from $2 trillion to $3 trillion, and in the Middle East and North Africa from $1 trillion to $2 trillion. Per capita consumer expenditures are forecast to grow at least 3 percent annually in each region by 2020."

Wessels said this gives Africa the chance to step up its economic growth as Western economies languish. What Africa has going for it are a rising population, improved education and an expanding middle class, he said.

South Africa and Nigeria are particularly capturing the world's interest "because of their promising economic future", he said, adding that by 2030, the continent's share of global exports will exceed 7 percent, compared with 2.8 percent today.

Wessels said Africa has the smallest share of the global middle class, but that will grow by more than 110 million people over the next 20 years to 180 million by 2030, accounting for 5 percent of the global middle class.

"In the coming two decades, consumers in emerging countries will indeed experience change at rates unparalleled in economic history," he says.

"The range of goods and services available, the extent of the urban environment, and for many the size of disposable incomes will grow at a speed surpassing that seen in all previous major economic phases."

As BRICS has continued to perform well during the world financial crisis, some non-members, such as Egypt, have expressed interest in joining the club.

"I am hoping BRICS will one day become E-BRICS, where E stands for Egypt," an Indian paper recently quoted Egyptian President Mohamed Morsy as saying. "I hope E-BRICS will emerge when we start moving the economy."

Sven Grimm, director of the Centre for Chinese Studies at Stellenbosch University in South Africa, said BRICS countries are in a strong position to provide development financing to African countries as they are accumulating wealth during their domestic development.

They could also draw on their experience to help African countries, he said. "Among the most important experiences are those in which ideas did not work. These should be shared.

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