“Trade Matters” For BRICS In Africa, So Does Internet Connectivity

Last week’s World Trade Organization Public Forum hosted dozens of panels on the general theme of “why trade matters.” A panel focusing on the role of Brazil, Russia, India, China and South Africa (BRICS) found that the new BRICS Development Bank could foster infrastructure development in Africa, while another panel said that removing barriers to internet connectivity is key to economic growth.

The WTO Public Forum took place from 1-3 October.

A 1 October event hosted by the Russian National BRICS Research Council, Eco-Accord and MGIMO-University, aimed to assess the role BRICS can have in promoting partnerships and development in Africa, bilaterally and multilaterally.

The volume of exchange of BRICS countries accounts for almost a quarter of the external trade of Africa, some US$340-350 billion, said Eugene Korendyasov, head of the Institute for African Studies of the Russian Academy of Science.

Several panellists emphasised the role that the new BRICS Development Bank could have in terms of infrastructure development.

The Agreement on the New Development Bank was signed this summer at the sixth summit of BRICS countries in Fortaleza, Brazil.

This is a “strong signal that the BRICS are dissatisfied with the slow pace of the reform of the international financial institutions,” said Brendan Vickers, head of the Department of Trade and Investment of South Africa.

He outlined three major innovations of this new bank: the creation of an African regional centre in South Africa concurrently with the headquarters in Shanghai, a special fund to support project preparation and implementation, and the possibility of more concessional lending rates for Africa.

Several panellists asserted that the aim is not to replace the World Bank but rather to complement and supply it. BRICS countries could become a real driver to accelerate Africa’s development, they added.

Internet Access, Local Content Key for Development

Separately, removing barriers to internet connectivity is considered to foster economic opportunities and growth, according to the Internet Society (ISOC) and the Internet Corporation for Assigned Names and Numbers Inc (ICANN), which organised a panel on 1 October on this issue. The panel was entitled, “Internet ecosystem development: lifting barriers to Internet connectivity for economic opportunity and growth.”

“There are still huge differences in term of quality of access but also access to content,” said Michael Kende, chief economist at ISOC.

Several panellists emphasised the impact of telecom services liberalisation in decreasing prices. According to an International Telecommunication Union (ITU) study to be published next month, the transition from two to three internet service providers (ISPs) leads to a 13 percent price reduction, said Philippa Biggs, coordinator at the Broadband Commission for Digital Development at the ITU.

Ambassador Ronald Saborio, permanent representative of Costa Rica to the WTO, presented the fast growth of internet subscriptions and the increasing contribution of ICTs to Costa Rica’s GDP (6 percent of GDP, which is more than tourism), since the liberalisation of the sector five years ago.

But social policies and education policies were already there, not everything came with the liberalisation, he noted. He also said that Costa Rica has been advocating at WTO for a long time “that e-commerce should be liberalised on permanent basis.”

Access to and development of local content is also key to fostering economic, social and even political growth, said Konstantinos Komaitis, policy advisor at ISOC. Governments and governmental support are important for creating an enabling environment to that end, he added.

There will be winners and losers in the internet economy, said several panellists.

“Winners will be those who enable access to internet, but also provide education and institutions that will enable users to take full advantages of opportunities,” said Ferdinand Kjaerulff , CEO and co-founder of CodersTrust, which provides “microfinance for students in Bangladesh to upgrade their skills to make more money on freelance marketplaces,” according to their website.

Image Credits: WTO