BRICS economies ‘to drive global trade’
Abu Dhabi, March 13, 2012
BRICS (Brazil, Russia, India, China and South Africa) economies will play an increasingly dominant role in global trade and will be major drivers of the global economy in 2012, said experts ahead of a major ports summit in Abu Dhabi.
Jointly organised by Turret Media and Seatrade, the World Ports and Trade Summit (WPTS) is scheduled to run from April 2 to 4 at Abu Dhabi National Exhibition Centre.
WPTS 2012 conferences include a dedicated emerging markets review session, which will bring together industry experts from various countries to discuss the role that these economies will play in light of developments in the Middle East.
“Over the past two decades, south-south trade has become an important feature of the international trade system due to the development of complementarities between southern economies,” said Fabiano Mielniczuk, research coordinator at the BRICS Policy Center.
“Brazil, India and China together with countries like Russia, South Africa, Mexico, have emerged as the engines of this trade in the last decade as their hybrid nature has enabled them to buy and sell products from and to their southern neighbours.”
“The global economic crisis has further intensified south-south trade because it has affected the two most important poles of world trade: the US and Europe. According to United Nations Conference on Trade and Development, from 1996 and 2009, south-south trade grew 50 per cent faster than the north-south trade. The agreement reached among developing countries on the Global System of Trade Preferences in São Paulo last year might contribute to further increases, going forward,” Mielniczuk said.
“The Eurozone will see its economy shrink by 0.5 per cent this year with a recession in the first half of the year and a gradual recovery in the second half,” said Sanjeev Sanyal, global strategist at Deutsche Bank. “The US is expected to grow its GDP by around 2.7 per cent this year. While China's growth is also slowing, we are confident that it will avoid a hard landing.”
Capt Mohamed Al Shamisi, vice president of Ports at Abu Dhabi Ports Company, said: “In terms of container volume, China is already the largest trade partner of the UAE, followed by India. The upcoming Khalifa Port facility and Kizad (Khalifa Industrial Zone Abu Dhabi) will improve access to local and regional markets for these powerhouse economies.”
Sanyal added: “Cost of energy and communications technology are the two major factors affecting the future of transportation infrastructure worldwide. Shipping remains by far the most efficient way to move goods and a single container ship can need thousands of trucks to empty.”
“This means that in terms of energy efficiency and cost, Hamburg is closer to Shanghai than to Munich. Strange as this may sound, higher energy costs will systematically favor ship based transportation over all other forms.
“A second important factor will be communications. We are shifting from a world of mass production/consumption to a world of mass customization. This will affect how transportation deals with the logistical requirements of this new world. Technologies like 3D printing may fundamentally change the nature of transportation in the not-so-distant future.”
“We live in a moment of history when the world economy is undergoing a fundamental shift at many levels - geographical, technological and financial. All of this will affect the transportation industry as it is the circulatory system of the world economy. The WPTS is, therefore, an important place where key players can exchange ideas and build plans for the new world that is emerging,” Sanyal added.
Mielniczuk continued: “In 2005, Jim O`Neil of Goldman Sachs suggested that there is a group of countries, the Next Eleven (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam) that are strong candidates to become larger economies and good markets to explore.”
“However, a significant portion of these countries lack the political stability that made the BRICS so attractive to foreign investment that, in turn, ignited the boost of their economies. I would keep my expectations high on BRICS economies,” Mielniczuk concluded. – TradeArabia News Service
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