February 16, 2005, Business Day
Carli Lourens

AGAINST the backdrop of rising concern that the India-Brazil-SA Forum (Ibsa) may become yet another failed attempt at boosting trade among developing countries, a fresh effort to prevent this was launched yesterday.

Research institutions from the three countries said they would analyse economic relations to identify opportunities for trade and investment among the Ibsa member countries in a new project.

Ibsa, a political and economic forum established by the three governments more than a year ago, had to convert from a politically driven talk shop into a swap shop if it were to succeed, warned Lyal White, senior researcher at the South African Institute of International Affairs.

In addition to the local institute, the project will be driven by Cuts Centre for International Trade Economics and Environment of India and the Institute for International Trade Negotiations of Brazil.

Trade between the three countries is low compared with their trade with rich countries, but project participants believe there is large scope for increased trade.

SA’s trade with Brazil, for example, constitutes less than 2% of its total trade.

The three regional powers make up a market of more than 1,2-billion people with a combined gross domestic product of $1,1-trillion.

A recent report by the South African Institute of International Affairs states that the Ibsa agenda as formulated by the three governments is broad and ambitious, and proposed co-operation in a large number of areas such as defence, education, health, job creation. This raised concerns about the viability of the process, stated the report.

In addition, economist Stephen Gelb of the Edge Institute in SA yesterday said government had not engaged sufficiently with nongovernment bodies such as business and labour to take Ibsa forward.

Cuts representative Pranav Kumar said the project would aim to bring together business, civil and research organisations among others, with the objective of formulating a new action plan.

Lack of growth in South-South trade has been blamed partly on the fact that many of these countries produce similar products.

But Kumar said there were many complementary trade opportunities within Ibsa that could be explored, citing India’s pharmaceutical sector, Brazil’s fruit juice and SA’s mining technology as examples.

Kumar said the one-year project, funded by the Swiss Agency for Development and Co-operation, would involve four case studies identifying possible exports and the effect on destination countries.