BRICS WORKSHOP - 2006

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BRICS WORKSHOP - 2006 Aalborg University,
Aalborg, Denmark 12 15 February
BRICS - Countries as Regional Dynamos for
Development
Angathevar Baskaran Middlesex University, London,
UK Mammo Muchie Research Centre for Development
and International Relations, Aalborg
University, Denmark
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Main Themes

• Regional Pole in relation to the Wider Region or
  what we call Neighbourhood
• Using Systems of Innovation perspective to
  conceptualise the regional pole and its
  neighbourhood pole and the hood
• Whether this relation hinders or promotes
  development

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Pole Hood A Conceptual Framework
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Regional Pole and the Neighbourhood Analytical
Framework

• The opportunities
• Mutual trade benefits/ competence building /
  learning through institutional linkages and so on
• The fears
• Perceived or real threat to local industry/
  market and fear of over dependence
• Dangers
• Fears of dependency by the neighbourhood could
  lead to missing opportunities to forge greater
  regional integration
• On the other hand, if the regional pole ignores
  its neighbourhood and regional integration, this
  could harm it in the long run (globalising
  economy)
• Existing interactions / Weaknesses and strengths
  in these interactions
• Trade/ Investments/ Institutional linkages/
  infrastructure linkages/ Higher education/
  technological learning
• Challenges and Prospects

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South Africa Problems of Integrating with the
rest of Africa

• Problems related to the bifurcation of South
  Africas own innovation system
• Problems related to the weak and often
  non-existent innovation system in many other
  African states
• General fragility of the ST system
• Problems related to the funding system
• Path dependence problems

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2000 2004
Developing countries To Africa To Asia 29.1 13.1 9.8 30.8 12.8 12.2
Industrialized countries To EU To USA 44.4 28.6 7.9 56.5 31.8 10.2
Other (transition) 26.6 12.7
Destination of South African Exports
Source IMF Trade data
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2000 2004
Developing countries From Africa From Asia 33.6 2.1 14.1 40.5 4.2 18.5
Industrialized countries From EU From USA 66.1 44.6 11.9 59.1 44.9 8.5
Origin of South African Imports
Source IMF Trade data
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South African Investment

• 94 of the 100 top corporations listed in the JHB
  Securities Exchange) involved in the rest of
  Africa
• Food retailer (Shoprite Checkers) has more than
  70 shops in 14 African states
• MTN mobile provider is in Nigeria, Rwanda,
  Uganda, Cameroon and Swaziland

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South African Investment

• SABMiller, second-largest beer brewer in the
  world is market leader in 13 states
• South African Transport runs Cameroons rail
  road
• South Africa manages power plants in Mali and
  Zambia
• SA controls banks and supermarkets in Tanzania,
  Mozambique and Kenya

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Companies involved in different sectors include

• Mining Anglo Gold-Ashanti, De Beers
• Energy/utility Sasol, Eskom enterprises, Umgeni
  Water
• Telecommunications MTN, Vodacom
• Transport Transnet, Unitrans

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Companies involved in different sectors include

• Construction-Murray and Rob Retail and wholesale
  (market seeking)-Shoprite, Massmart Group
• Financial Services Stanbic, IDC
• Tourism Southern Sun, Protea
• Manufacturing SABMiller, Barlow, World,
  Nampakerts /Group5/Grinaker LTA

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Sectors in which South African companies operate

• Transport
• Construction
• Financial services
• Tourism
• Mining and energy
• Telecommunication
• Retail
• Hydropower Mega-project e.g. Inga dam project in
  DRC

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India as a Regional Pole and South Asia as
Neighbourhood?

• The opportunities
• The fears
• Dangers
• Existing interactions/ Weaknesses and strengths
  in interactions
• Challenges/ Prospects

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Table1 India Exports and Imports to Countries
in South Asian Region 2004-05 (in Rs. billion)
Country Exports Imports
Bangladesh 72.2 2.7
Bhutan 3.8 3.2
Maldives 1.9 0.03
Nepal 33.4 15.6
Pakistan 22.9 4.2
Sri Lanka 60.9 16.4
Sourcelthttp//www.dgciskol.nic/pdfs/Emsft_2b.pdfgt
and lthttp//www.dgciskol.nic/pdfs/Imsft_2a.pdfgt
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• Indias Total Imports in 2004-05 Rs 4905.3b
• Total Imports from SAARC countries Rs. 41.96b
• This amounts to just 0.86 of the Total Imports

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Table 2 India Exports to and Imports from
Bangladesh 2001-2005 (in US m)
Year Exports Imports Trade Balance in Favour of India
2000-01 873.0 73.9 799.1
2001-02 1002.2 59.1 943.1
2002-03 1176.0 62.1 1113.9
2003-04 1740.8 77.6 1663.2
2004-05 1586.2 54.9 1531.3
Source Ministry of Foreign Affairs, Government
of India.
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• Major items of Exports from India food grains,
  cotton yarn, fabrics, machinery, instruments,
  glass/glassware, ceramics and coal.
• Major items of Imports by India raw jute,
  inorganic chemicals, leather, jamdani saris, etc.

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• Indian Investment in Bangladesh
• 28 Indian joint ventures with equity
  participation equivalent to US 16.6m (by the end
  of 2000)
• 7 wholly owned subsidiaries with total equity of
  US 0.61m
• Areas covered include textile spinning, building
  industry, chemicals, software data processing,
  and automobile
• Tata Group has signed an agreement to invest
  US2b to set up a 1000MW power station, a steel
  mill, and a fertilizer unit.

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• Links in Education
• Over 50,000 students from Bangladesh pursue
  higher studies in India. India provides various
  scholarship schemes such as Indian Technical and
  economic Co-operation (ITEC) and Technical
  Co-operation Scheme (TCS) of the Colombo Plan.

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Table 3 India Bhutan Trade (2001-2003)
Trade (in Rs. billion) 2001 2002 2003
Exports to India 4.70 4.92 5.46
Imports from India 6.98 6.05 9.20
Exports to Other Countries 0.28 0.34 0.19
Imports from Other Countries 2.04 19.7 12.2
Source Ministry of Foreign Affairs, Government
of India.
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Table 4 India Exports to and Imports from
Maldives between 1999 and 2003
Year Exports (in Rs. m) Imports (in Rs. m)
1999 1760 8.0
2000 1684 11.0
2001 1886 13.1
2002 1930 5.5
2003 2107 15.4
Source Ministry of Foreign Affairs, Government
of India.
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Table 5 India Exports to and Imports from Nepal
2002-2004 (in US m)
Year Exports Imports Trade Balance in Favour of India
2002-03 971 362 609
2003-04 1100 425 675
Source Ministry of Foreign Affairs, Government
of India.
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Table 6 India Exports to and Imports from
Pakistan between 2001 and 2005
Year Exports (in US m) of Pakistans Global Trade Imports (in US m) of Pakistans Global Trade
2001-02 186.5 1.8 49.2 0.53
2002-03 166.05 1.35 70.7 0.63
2003-04 382.4 2.45 93.7 0.76
2004-05 (Feb) 297.20 2.4 149.36 1.69
Source Ministry of Foreign Affairs, Government
of India.
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Table 7 India Exports to and Imports from Sri
Lanka between 1999 and 2004 (in US m)
Year Exports Imports Total
1999 512 49 561
2000 (Post FTA) 600 58 658
2001 602 72 674
2002 835 171 1006
2003 1093 245 1338
2004 1350 382 1732
Source Ministry of Foreign Affairs, Government
of India.
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• INDIA SRI LANKA
• Sri Lanka is probably Indias only neighbour
  that views increasing economic interdependence
  with India more as an opportunity than as a
  threat.
• India accounts for about 15 of total Sri Lankan
  imports and it is also the fifth largest
  destination for Sri Lankan exports accounting for
  about 4 of Sri Lankas total exports.
• Sri Lanka is relatively small market for India.
  It accounts for about 2 of total Indian exports
  and less than 1 of its imports.

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• SRI LANKA
• Major items of Exports from India
• Transport equipment, cotton yarn, fabrics,
  primary and semi finished iron and steel, sugar,
  man made yarn, machinery and instruments, drugs,
  pharmaceuticals, fine chemicals, wheat, glass and
  glassware, ceramics, cement, paper and wood
  products.
• Major items of Imports by India
• Non-ferrous metals (Copper), spices, electronic
  goods, electrical machinery, scrap metal, paper
  pulp and chemicals.

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• Indian Investment in Sri Lanka
• India is the fourth largest investor in Sri Lanka
  with US400m in FDI (after Singapore, UK, and
  Australia)
• India was the biggest investor in 2002 and 2003.
• Indian Oil Corporation is a major player in the
  petroleum sector through its subsidiary Lanka
  IOC.
• NTPC and BHEL are collaborating in setting up a
  300MW power plant.

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• Links in Education/ Human Resource Development
• India provides training facilities in various
  professional courses under Indian Technical and
  economic Co-operation (ITEC) (70 places) and
  Technical Co-operation Scheme (TCS) of Colombo
  Plan (50 places), and BIMSTEC (30 places).
• Major courses under these schemes are financial
  management, auditing and accounting, rural
  development, parliamentary studies, rural
  banking, insurance, plantation management,
  teacher training, textile, engineering and
  railway.

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Summary

• All BRICS countries are poles with their own
  neighbourhoods
• Initiative for a research project on this aspect
  of BRICS as poles with their respective hoods
  focusing on the interaction of the research and
  innovation system
• More cases and comprehensive data needed
• Comparative frame, conceptualisation and
  communication using the IS to explain detailed
  empirical variations in the dynamics of
  pole-hood interactions
• Map the particular trajectories, path
  dependencies and emergent properties
• A book proposal is prepared to assist the
  development of the project and to move the
  Globelics initiative forward!!
• Thank you!!!