 Okay, and to our panellists, please enjoy it. We're going on in the next 25 seconds. Good afternoon and the warmest welcome to the special debate coming to you live from the World Economic Forum, Africa. 2011, as you well know by now, it's the 21st World Economic Forum to be held in Africa, and I can tell you in two decades, things have changed. There's definitely a sea change. Geopolitically, the world is changing, a definite shift. And what we're here to talk about today is essentially that, this shift in global economics, the change in global architecture of the world, the growth in South-South cooperation. It's been said that, at currently, brick economies, Brazil, Russia, India, and China, account for about 24% of global growth with concerted effort. It's believed that within the next five years, they'll account for 61% of global growth. Now, of course, as you know, in April of this year, South Africa was officially inaugurated into this elite club of emerging market economies and effectively catapulted Africa onto the world stage. What we're here to discuss is whether or not the bricks is going to offer any tangible change in relations economically, any systemic changes in the global trade regime, and any tangible benefits for what's regarded as the new African consumer, with Africa having, at the very least, 160 million people now earning over $5,000 US dollars per annum. So it's a sea change, it's euphoria around the sea change, but what do we need to be cautious about? Debating the question of building South-South relations here at the World Economic Forum with me, we have Professor Robert Lawrence, who's the Albert L. Williams Professor of Trade and Investment at the Harvard Kennedy School. We also have Ambassador Liu Guijing, who's the Special Representative for African Affairs in the Ministry of Foreign Affairs for the People's Republic of China. Then we have Mrs. Obie Gehli, Issa Kwesili, who's the Vice President for Africa at the World Bank in Washington. Colin Coleman is the Managing Director and Partner for Goldman Sachs here in Africa. Seated next to him is the Honorable Minister of International Relations and Cooperation for South Africa, Ms. Maite Ngwana Mashabana. And last but certainly not least is the Minister of Commerce and Industry for India, Mr. Anand Sharma. Ladies and gentlemen, thank you very much for your time. Let me also remind our viewers that this is essentially an interactive session. So after we've ironed out some of the core issues around South-South relations, we're going to hear from some of our esteemed delegates here at the World Economic Forum 2011. Let's start with you, Minister Ngwana Mashabana. So South Africa has now become a bona fide member of BRICS. It's the S. And many have questioned the merit of South Africa being part of BRICS. They say you're just one-quarter the size of the Russian economy. You're just 49 million people. Technically, you really have nothing to offer. Mm-hmm. Well, Lerato, good afternoon to fellow panelists and to ladies and gentlemen in the audience. South Africa's membership to BRICS was not an event, but a journey. It is a journey that was started by our visionary leaders long time ago, when they finally have been working together to fight colonialism from India to Africa and finally said even at that time as they were fighting for freedom and decolonization that people of the South have to work together when they get freedom, political freedom, to also work for economic and social emancipation. That's what brought the bounding conference into being. At that time, those who knew better when the Western world was still ruining the group thought our leaders were just but dreaming. The realization of the formation of this very, very progressive formations of the South to us is the realization of this vision of our forbearers, which works for economic emancipation of our people in the South. And so, therefore, I would want to remind the audience that leaders, like all Artambo at that time, were invited in such gatherings, even though South Africa was still underapported. So for us, South Africa joining Briggs is a celebration and a homecoming of that which we waited to see happening. So therefore, politically, that is a confirmation of that which we have been part of historically. Economically, South Africa runs the biggest and most diverse economy on the African continent, the continent of Africa that has become the third fastest growing economy in the world with very young population and with one billion people. So we believe that we are in the right forum at the right time and we've got a lot to offer. All right, so that's what informs the South African membership of Briggs. Minister Anand Sharma, your views, obviously India's got a population of just over a billion people. It's growing above 8%, but tangibly, are there any gains in partnering with fellow emerging market economies? I think political leaders must have a vision. They must connect to the contemporary realities, to history, and what the future backends. It would be only attributed to short-sighted people who lack vision, who are looking for immediate gains, like asking for instant coffee from a coffee machine. As my team Ashabane, my sister, has explained, you have to be connected with history. This is not the first time that this dialogue is emerging. It was before India's own independence. It was during the struggle against apartheid against colonialism in South Africa and in Africa, in Asia, in South Americas. Our leaders had taken a clear position during our national struggles. Mahatma Gandhi, who spent 22 years in South Africa and returned to lead India to freedom, and his fellow comrades had a deep philosophy, also understanding of the global economics. It was ideology against imperialism, of political economies, exploitation, which colonialism brought these leaders together. Now today, there is a clear shift which is taking place. It's not only a shift of global economic growth production, but more than that, it's the re-balancing. So it's not that the BRICS countries contributed 24% as you said, to the global economic growth, and that's 25% of the global GDP, but 50% of the global economic output last year. Now, in the coming two years, you'll see another shift. The economies of Asia, of Africa, and North Americas will see a major transformation. But Asia, European Union, and North Americas will be equal-sized, each contributing 25%. 85% of the world's population lives in the countries which are called developing countries, least-developed countries, poor countries. 15% are outside that. Most of the resources of the world are in these countries. You had asked a question which was answered about South Africa. It was but natural. The continent of Africa has to be part of the global coalition. It cannot be that the entire Africa is left out in the global order when the political and economic architecture of the world is changing and changing for the better, becoming inclusive, becoming democratic, becoming representative. Ambassador Liu, we've heard some philosophical reasons to justify this grouping. But when it comes, you did. But when it comes to China, they say it's less philosophy. It's more business. China just wants to take over the world. Well, this time is the first time for China to be the host to the BRICS leaders conference. And it makes a lot of sense, because it's the first time that we have a new member, South Africa. Though the size of the economy, the size of the population of South Africa is not that big, but it makes a lot of sense for the BRICS group and for the continent. Because South Africa is a gateway to Africa, because South Africa is one of the most mature democracies here in the continent. Because South Africa plays a vital and important role in the affairs of the continent, not only that. And South Africa, normally, when he decides to do something, it usually to advance the interests of the whole continent. It's not only South Africa involved. And these BRICS meetings, at this time, indicates that the emerging countries, the developing countries, as a bloc, as a group, has a bigger say, a louder voice. But we do not definitely mean that we have a group which is supposed to be confronting the interests of the developed world. It will serve as a bridge of the North South cooperation dialogue. It will serve as a platform for the BRICS countries, for the developing countries to put our heads together to advance the interests of the whole developing world and to promote a prosperity and a peaceful world in general. Con Coleman, Goldman Sachs, I won't make it your problem. But Jim O'Neill coined BRICS. He's also one of those people who's coined the next 11 emerging market economies to watch. And from that stable, there's been a lot of criticism as to whether or not the grouping is going to truly change the face and the shape of global economic architecture and whether or not South Africa warrants to be there. Goldman Sachs still not convinced of South-South relations? No, precisely the opposite, actually. The phenomenon, let's start at the global level, the phenomenon of growth markets is rising as the most important phenomenon in the world today. So on a relative basis, what we call growth markets, some people call emerging markets or developing markets, are becoming the source of growth on a relative basis to developed markets. And those traditional markets are really dependent, more and more, on the rise of China, $6.5 trillion economy we believe will overtake the United States. As part of the BRIC analysis was that, effectively, these BRIC economies are going to become the dominant economies by the year 2050. And the view of Goldman Sachs has been that institutional investors will want to know where the emerging market growth is happening. And it's really been the BRIC story, which is Brazil, Russia, India, and China, for those people who are not familiar. The BRIC story has effectively been an econometrics analysis which has built on the basis of some assumptions. And just to understand what those assumptions are, they are assumptions about populations, there are assumptions about GDP size of GDP growth over this period. And as a consequence, the view is that over this period of the next 20 to 50 years, the BRIC economies and the next 11, which are the next largest after the BRIC economies, will become the dominant economies in the world. In relation to South Africa, if you take a cold clinical analysis of where South Africa is today, you reach two conclusions. One is, South Africa is the dominant, as Ambassador Liu said, is the dominant country today within Africa to represent Africa on the world stage, and particularly within the BRIC economies. And secondly, that South Africa is a relatively small economy. If you take South Africa's GDP is $380 billion versus China's $6.5 trillion economy, 49 million population versus 1.2, 1.3 billion people in the case of India and China. And so it is, from an analytical point of view, a question as to South Africa's position as a BRIC. But there's no question in the minds of everybody, myself as a patriotic South African included, that South Africa plays a very vital role as a member of the BRIC in a new geopolitical reality. And that geopolitical reality is that the BRICs are part of the global future. Obea Zikwisili, we've been talking for the last 20 years about the Washington consensus. Classical economics, the state mustn't be too involved in growth, those kinds of things. And now we're talking about the China consensus. Is it too early to be talking about things like that? Has the world really changed from the World Bank point of view? I don't think that anything about the importance of macroeconomic foundations on the basis of growth have changed. Even China had to take care of the fundamentals as a basis for its growth. It wasn't until China embraced the market principles in the management of its economy that we saw the growth that happened, the same thing with Russia. I think that, essentially, the idea that there is some model that is going to be prescriptive and be the basis of growth of nations probably is passé. The only thing that matters today is the pragmatism with which countries are able to know that there are fundamentals that you need to take care of to ensure that you have your macroeconomic stability as a necessary precondition for every other thing you do in order to grow is something that Africa has learned. And that's why, in the last decade, we saw the growth that we've seen in Africa. The next thing, of course, is how Africa then takes advantage of the opportunities of being integrated to the global marketplace. How does it embrace its own comparative advantages and then use that as a basis to actually deepen and spread out the growth so that it can be growth that comes with jobs? Professor Lawrence, I want to capitalise on the fact that you're a professor of trade here. Have there been real tangible gains between a collaboration of Asian, African, and Latin American countries? Certainly, we've seen trade between Africa and Asia grow about 30%. But in the greater scheme of things, Africa's contribution to world trade is still something less than 2%. So is this really having a positive impact? I think it is unquestionably having a huge impact. I mean, conventional wisdom in 2000 was that the world economy was basically working for the developed countries and perhaps for India and China. But for most of Latin America and most of Africa, we were not seeing economic growth. Since 2000, we've seen a remarkable change. We've seen a global dynamic that has spread growth and prosperity both through the African continent and through Latin America, the Middle East, and elsewhere. So we are living in a changed world. And if we ask why, there are some external reasons. There's a cumulative effect of the kind of growth that China and India have generated, which has been heavily commodity intensive. So I think there's an external dynamic that is helping to spread the economic gains to the rest of the world. And there's also been some internal changes. I agree that we downplayed the importance of structural adjustments and the so-called Washington Consensus. But what's very striking is that because of that growth, countries have been able to put themselves in much stronger macroeconomic positions and they've also undertaken a lot of reforms domestically that have put them on a far better path. So I would submit that, yes, the paradigm of global growth has improved tremendously, although there are considerable challenges. Okay, Minister Guanemashahite, let's deal with statistics here. Guanemashahite, excuse me, let's just deal with statistics here. Trade between South Africa and China is now above $25 billion. And the feeling is that it's skewed very much in favor of China. If there are benefits to South-South cooperation, who's really the winner here? The general view is China is the winner. A country like India is the winner. South Africa's still lagging. Well, well, well. I think we need a workshop before we come to this because the information I have is that on India, we are doing far, far much better than the information you have. And the Minister of Commerce of India is agreeing with me. We are on China. South Africa is the only African country and largely in many of the developing South that has, besides becoming a member of BRICS, that has a bilateral comprehensive strategic partnership treaty with China, which also looks at how else can we reverse the trend and make sure that South Africa, together with the bigger Africa, benefits from this very important relationship. I will take back to what you referred to as philosophy because I referred to that as very important history, as Minister Anansham had said. South Africa prides itself to have the foundations of a foreign policy on pan-Africanism and South-South solidarity. So therefore, we are having a forum, India-Africa forum, where we discuss these issues, where we should be bringing compatibility. Because, you see, as much as there's history behind our relationship, there's also reality that these countries are resources hungry and Africa has a potential to offer this. But also on the African side, we are working for beneficiation of our minerals so that we don't just extract and export. So that's why in this comprehensive strategic treaty that we've signed with China, we have a policy of beneficiation at source, which China agrees with because that helps them to deal with also with environmental concerns. So there's no zero-sum game here. There's a win-win that we are working towards incrementally. Minister Sharma, just your views here. You said no, no, no. Give us the figures. When we're talking about trade relations, how much is coming into Africa? How much is leaving Africa? Let me tell you, when it comes to India and Africa, or are you asking only about South Africa? You said so. African general. India and South Africa's bilateral trade is close to $10 billion, and it is heavily balanced in favor of South Africa. South Africa exports close to 6.5 billion. India's exports are less than 2.5. We are not grudging because what India imports are the commodities that South Africa has. Same in the case of many other African countries, whether it comes to gas, oil from Nigeria, Sudan. So it's not that we are exporting. People must shed the old notions of China and India being merchant countries. We both were. That's a fact of history. 54% of the world's GDP were shared between China and India. But India was the largest trading country of the world, but today India share in the global trade. It's barely 2%, and we are 17% of the world's population. And in the coming years, in your lifetime, hopefully definitely in my lifetime too, of the first five economies of the world, three will be from Asia, in the order of China, India, and Japan. So these are the realities of the world which we must address and that we are at an inflection point of history. These changes will get reflected. And much has talked about the size of South Africa. South Africa is huge. When you look at its size, its depth, the resources, it's also a functional democracy. But beyond that, what people are forgetting, it's not only the material resources, but the human resources. What, when I was growing up as a student, we were told that our population is huge, this is not good, every year India adds Australia. But today, 1.2 billion, close to 70% are young. After 20 years also, India's average national age will be 29 years. Same is the case with Africa and South Americas. When they're changing demographics in the world, is the human resources also which matter. And another thing what I would like to quickly add, and there'll be time to elaborate later, is that our engagement is distinct and different. China's is different from the Chinese perspective. So is Africa's with each one of us. India's growth story is not driven by exports or merchandise trade. It is by domestic demand and domestic consumption, domestic production. But far more important is that over decades, when India has been confronted with monumental developmental challenges, India has been committed, sharing its resources, sharing its technologies, capacity building, education, and there are tens of thousands, if not hundreds of thousands of students from Africa who have come and studied in India. So, and even today, we have close to 40,000 students. We'll raise the growth models later on. Colin Coleman, I want to get the investor's point of view here. Obviously, we've seen more FDI coming to Africa. That's almost risen by 87%. But we're told that when you just look at it broadly, comparatively, Africa funds versus Asia funds, you can't even begin to compare. For investors looking for yield, they're going to Asia, they're not really coming to Africa because Africa's just not competitive, because there are political risks, because there's a skills deficit, because, because, because. That statement is, is frankly either outdated or wrong. Take your pick. The reality is investors today are very focused on Africa and I'm not just talking about your exotic emerging market funds. All the institutional mainstream investors are asking the question, how do they play Africa? Now let's just, for a moment, take a reality check. The reality check is the following. South Africa is the only functioning liquid capital market on the continent. So if you want to get liquid exposure, meaning you buy in a security and you can sell that security with relative ease at a fair price and know what you're getting and know you can trade, the Johannesburg Stock Exchange is your most likely place to do it. So the Johannesburg Stock Exchange is a $740 billion market cap, comparable with Russia, not as big as some of the other bricks, but a very sizable and highly functional capital market. Unfortunately, other countries within Africa do not have that functioning exchange. So Nigeria is the next largest with a approximately $50 billion market cap, which is so one-tenth the size of the Johannesburg Stock Exchange and then Angola and Kenya are hoping to grow stock exchanges. But in effect, one of the problems for the investor community is how to play the continent. And many of them play through the South African companies. So the shop rights, the picket pays, the standard banks, the MTNs who've done incredibly well. If you look at the MTN growth story around Nigeria and what they've managed to do in a very short space of time, it's an incredible testament to the investing opportunity that there is. Having said that, I think it's important to note that there are many other ways in which the investors are playing Africa, including private equity. And there are many funds that have been created. Carl Lyle, for example, one of the largest private equity firms in the world, just created an Africa fund. And there are many other funds that a variety of investors are participating in. I just want to get a quick comment from you, Professor Lawrence. Are you convinced by what's been said here? When investors are looking for yield, do they look at Africa as a potential growth market when we're talking about trade? Is the surplus in favor of a country like China? Well, firstly, I do think we shouldn't look too narrowly at bilateral trade balances, simply because that isn't necessarily an indication of the benefits that we are receiving. But I also think we shouldn't be focusing on the past so much. We should think about the opportunities that this relationship is granting. And one of the dimensions that has been mentioned relates to a more value addition in commodities. And certainly where this makes sense, I think it is appropriate. But I think we need to think much bigger than that because I also think that ultimately to really deliver, which was the focus of this session, to deliver to people on the ground, we have to have more job creation and beneficiation in large, capital intensive, power intensive refineries will not do it for job creation. Job creation will come from manufacturing opportunities. So the real challenge that I think Africa faces and investors coming to Africa is not just to have a commodities play, but to think about the manufacturing opportunities that are created. As we see structural changes occur in China and the global supply chains start to move, the opportunity is for Africa to restructure itself in order to take advantage of that potential. So I would prefer that rather than look at the past and even the present, we start to focus more on the opportunities in the future because ultimately that's what BRICS is about. We can get into debates about classification. It doesn't matter really who gets into the group. What matters is what they do once they're in the room. Okay, thanks so much for that. We're gonna take a short ad break here on CNBC Africa. We're debating and I underscore debating South-South relations, the idea of building greater relationships between emerging market economies. As you well know, South Africa is now a bona fida member of the elite club of Brazil, Russia, India and China. Many have questioned South Africa's status and whether or not Africa as a continent is in a position to compete. We've heard about partnerships, but it's also competition and we'll interrogate some of those issues after the break. Stay with us. How are you feeling? Am I a devil? You're trying to... And I'm going to continue. We're going to start with you two next. Okay, so we wanted to get rid of the whole the bogeyman China issue first and then we're gonna start talking about social benefits and manufacturing and those kinds of things. Great, great stuff. Okay, I'll do that. Don't worry. Yes, I'm listening. I'm listening, Phil. Okay, 45 seconds. Do you want to have some water quickly? Welcome back. You're watching a special broadcast on CNBC Africa. We're at the World Economic Forum for Africa, year 2011 and we're talking about the shifts in geopolitical economic relations. Globally, the rise of the Brazil, Russia, India, China and now South Africa, building and fostering South-South relations. The tangible trade, economic and human development benefits. Before the break, we were getting into a bit of a heated debate as to dealing with the past and China being the bogeyman and who benefits and who doesn't. We're being urged to look at the future and what the gains will be. I still want to continue being a little bit of a devil's advocate on our panel today. Robert Lawrence, who's the Albert L. Williams Professor for Trade and Investment at Harvard Kennedy School. Also, Obie Gehle is a Kusili who's the Vice President for Africa at the World Bank. Colin Coleman is a partner and Managing Director at Goldman Sachs here in Africa. We also have the Minister Maidengwana Mashabana who's the Minister of International Relations and Cooperation in South Africa and also Minister Anand Sharma, Minister of Commerce and Industry in India. Ambassador Liu Guijin is also a special representative for African affairs in the Ministry of Foreign Affairs, People's Republic of China. And I'd like to start with you. Ambassador, many people, when they look at China's involvement with Africa, they get nervous. They say China's just here to exploit the mineral resources of Africa. China offers loans and soft loans and very favorable terms for loans in Africa without considering broader human development issues. Basically, you're not doing things with a lot of goodwill. Well, I think that fear about China is out of proportion and it has no ground. You know, because China is a new, not newcomer to Africa. Since the People's Republic of China was founded over 60 years ago, we started close relations by supporting African countries in their justice struggle for independence. And since then, in so many decades, our policy with Africa has been consistent and visionary and strategically based. That is to say that when China helps Africa and we help ourselves, when Africa develops and China benefits from that development, well, people normally usually mention about what they call the to grab resources from Africa. But actually resources or energy up to now remains the most advantageous commodities in Africa. I mean, China, in order to sustain, to support its development, we need to have a comparatively stable supply of energy, of minerals, and Africa has been one of the destinations for that resources. I don't think that is something evil, that is something bad. But what we have been doing with Africa and the structure of China's trade with Africa has no different, no bigger difference with the structures of the continent's trade with all the other developed partners. For instance, with the EU, with the US, with a lot of development world, it's mainly for them to import minerals or commodities from Africa and export where finish the goods. I think Africa benefits from the revenues of the minerals. It's the African governments who can use the revenues to properly to diversify the structure of the economy. And we from China do not think that our trade structure with the continent is ideal, is that desirable? But that will take time to change. And for this, just for that, China has thought of all those measures which have been approved successful back at home and we have opened six industrialized zones. We call it trade and economic cooperation zones. We hope that could be served as a kind of catalyst for the industrialization of Africa. We hope that industrial zones could help African countries in their manufacturing sectors and to create more jobs. That is what we are doing. The essence of China's Africa policy is for mutual benefit, is for win-win arrangement. So that's why I fully agree with remarks of two ministers with regard to our relations between the BRICS, between China and Africa and the other developed world. Obie Izikwisili, your views here. I mean, I think the World Bank takes a holistic approach when you're in Africa. You are concerned about improving our infrastructure. You're also concerned about improving on the well-being of humans on the continent. Do you think these South-South relations are leading to that? Are we bridging those social inequalities, the more business we see coming in from Asia and Latin America on the continent? I think that this is a walk in progress. I think that a sense of the continent in entering whether bilateral relationships amongst these countries or in the case of South Africa being a part of a bloc and therefore a position in itself as more or less a representative of Africa in that bloc called the BRICS. In whatever form it is, defining exactly what economic interest you seek to serve yourself in that engagement is important. None of these countries are coming without a sense of the economic interest they seek to serve. I think that the most important thing that African economies need to do more and more is to provide themselves the kind of content and capacity with which they can get the best deals from whosoever they are engaged in trade discussions. And I think that as more of the countries have embraced the idea that undiversified structure of economy would not lead to better improvement and standard of living of their citizens, that's why we're hearing more of them being interested in not just the macro level reforms that you see in the improvement in business environment generally, but also looking at sectors like agriculture, looking at the services sector, in say tourism and real estate and the likes, and seeing what window of opportunity they've got in the relationship with these countries to deploy technology. I think that technology transfer has to be part of the conversation. I think that the whole thing about the rising labor cost in India and in China will ultimately be beneficial to these countries on the continent and they must take advantage of that. I'm glad you just mentioned that. Professor Lawrence, I want your views on this one and me, I'll take you back to the past, huh? In South Africa, we've seen an entire industry decimated by Chinese manufacturing and what they call dumping, textiles. In the Western Cape, right here where we're at. So when we say, let's talk about partnerships, let's not look at the past, let's look at this as a fraternity. That's very philosophical, that's very ideological. It does not speak to the bread and butter reality that ultimately we are in competition with the Chinese. On labor, on production, on volumes, China's got the critical mass to produce cheaply and we can't compete at that level. Well, again, I think what you describe accurately depicts things that have happened over the last few years, but I don't think it's where we're heading. I actually think, as we started to hear reference to, labor costs are rising in China. China is changing its growth strategy to a more consumption-led path and those global supply chains are starting to move out of China and the real question is, where will those supply chains move to? Can Africa position itself to acquire some of those supply chains? So I would like to see our relationship with China and I was delighted to hear the reference to the industrial zone strategy. I believe what we need in South Africa and in other African countries are the creation of working together with our brick partners, industrial zones, which will bring their know-how in global supply chains to Africa in order to supply their growing consumer markets. So again, it may well take us buying fabric from China, but we need to assemble, start by assembling the clothes to sell to them in order to get the scale to restore our fabric industry. So we have been living in the past and we need to think about where is the global economy going and is Africa and South Africa going to be positioned to take advantage of those opportunities? Colin wants to say something and then Obi, shall we start with Colin? I just want to say, I think the allegation about China may make good television, may make good headlines, but frankly, the reality if you travel around the continent, you go to a place like the DOC, Kinshasa, and you face a situation where their national budget per annum is $4 billion and the Chinese are offering $9 billion taking copper out of the ground and building infrastructure which they otherwise would never get the opportunity to fulfill. That is the reality that China is playing into. And so I think it's a very positive force in many places which otherwise would have no opportunity for development. The question, of course, is whether that is done in a way in which helps leave a legacy in those countries that is positive and sustainable. And I believe China hears that story. Repeating the allegation is not necessarily useful. The question is how do we create partnerships across the countries, including South Africa and other countries to build capacity to make that a sustainable development process? I just wanted to pick up on the matter of trade between Africa and India, China, Brazil. It's important for Africa to actually walk through that same spirit of partnership to discuss the issues of the tariff barriers that their products have in these countries. Take a country like India, tea and coffee is still 100% duty, and that essentially will limit the extent of the export from some of these countries to India. Or in the case of Brazil, you look at footwear products that's some 35%. If you look at the rules of origin and you look at the problems of trade facilitation and the disadvantage that Africa has, if you're really discussing, and I was glad to hear your spirit of comradeship in economic matters, it would be good to have Africa sort of have the discussion with these countries in terms of how it conquers some of the tariff barriers that stand in the way of Africa being able to go beyond being a resource commodity supplier. Both ministers want to rebut. Minister, you got something to say about what's just been said about India and some of the barriers? You see, people have to realize, due respect, that developing and emerging countries are also creating linkages and institutional arrangements. When it comes to tariff barriers, I think all our countries have a collective position in the global context to create a multilateral trade regime which is rule-based, which is fair and equitable, and that's where we stand together. I think tea and coffee is a very minor example which you're giving because I don't want to get into the commodities by name and the trade figures bilaterally with the countries. But the fact is that India was one of the first countries which took the initiative, not forgetting that we are 1.2 billion, we are not a rich country. 600 million live in villages, 400 million are poor. We are more poor people and more hungry people there. At the same time, look what India is doing. We have duty-free tariff preference for all the LDCs, 37 of them, 33 of them are in sub-Saharan Africa. You have Pan-African E-Network project where through Indian satellite systems, we have assisted sub-Saharan Africa to bridge the digital divide. It's a major leap in education, telemedicine where universities in Africa stand linked with universities in India. I have not completed. Also, please, please, we also have hospitals in Africa linked with super-speciality hospitals in India. And the entire projects are a gift of the Republic and the people of India. So let's not forget what we are engaged in. Only tea and coffee should not be used as an example, but you must look at the larger picture. And that's what I said with all respect. Minister Angwana Mashawane. Don't get my brother agitated. India gave us a lawyer at the time when we were fighting for freedom. We sent back to India a very, very important export, a Mahadma, the liberator of India. I want to pick on the point of Lawrence and also of Colin, that times are indeed changing and that there is a future out there for Africans and that Africa is now part of globality and we are no longer the dark continent that has been forgotten. We have become the third fastest growing region in the world. What do we need to do ourselves as Africans supported by our partners in BRICS? Not only South Africa, but broadly, Africa. We need to look at the opportunity that we are. We need to start, and we are doing that, aggressively building on our infrastructure so that we can accelerate intra-trade. Africa is an opportunity for itself for the 1 billion people that live in this continent so that we can stop complaining about what others are not doing for us. Talking about dumping of textile products, China has become the textile factor of the world. They sell to America. If you talk to President Obama today, you hear the same kind of a complaint about how textile products are all over in America. To round up my point, Lerato, we are welcoming this new excitement of investment in Africa into our infrastructure so that we can turn around this opportunity that has been a challenge of inter-trade between Africans, which at the moment is still at 10%. We also want to say that BRICS is an opportunity because what it brings with it is that we've been told in the past, as Lawrence had said, that governments must have nothing to do with business. But we've seen with all the BRICS or BRIC countries in the past that partnership between government and business has brought this phenomenal growth that we see. So Africa has been confirmed by our policies of building a developmental state, working in partnership with our partners in BRICS. Let's be solution-oriented now. Colin Coleman, two questions I'm going to ask you. I'll start with the first. If we're going to turn things around as the minister is suggesting, then South Africa has to develop its industrial base. And not just South Africa. Africa, indeed. We have to develop a competitive advantage in manufacturing because that's what the Asians are able to offer the world. That is not what we're able to offer the world at this juncture. What can be done to support it? Well, look, I mean, I think that to address a slightly but related point, I mean, what we are seeing is there's a major reorientation of corporate-to-corporate behavior. And that corporate-to-corporate behavior, in essence, has a combination of the indigenous growth of all these African economies and the support being provided by the South African companies, Indian companies, for example, Bahti buying Zain, establishing their headquarters in Kenya. The Chinese active all around the continent, very active in oil, very active through such as, for example, ICBC buying into Standard Bank, Discovery forming the relationship with Ping An in China on that joint venture, which is extremely exciting that we were involved with. The Brazilians being very active in the Portuguese-speaking countries. You have a coincidence of activities, which I think, in combination, is going to provide a very exciting support to the momentum. There really is a fresh breeze blowing in Africa. And it's a combination of indigenous and supportive activities coming in. President Liu, what is China doing going forward to support Africans developing very sound manufacturing industries? You've got the expertise. How are you helping us with the technological transfer, the skills transfer? Yes, I mentioned the industrial parks. This is one of the innovative ideas from the Chinese government. They are currently being built, some of them have been finished. Within the framework of Falkhawk, that's China Africa Corporation Forum, that we have a number of concrete measures to support the manufacturing sectors. For instance, two years ago in Shamshaik, during the third ministerial conference of Falkhawk, our government announced a fund, which is US$1 billion to support SMEs, small and medium-sized industries. This is one. Two is that the Chinese government encourages Chinese business people to come to invest in Africa, in manufacturing sectors. For instance, here in South Africa, and the investment for China is roughly US$1 billion. It's not only in mineral sectors, it's also in manufacturing sectors. And the main factory, which is quite big, is going to be here and also some areas. And also, the Chinese side encourages the Chinese companies to work hand in hand with the African companies to come into joint ventures. I think all these areas are to support the manufacturing sector. And also, we open our markets wide to the commodities and products of the African countries, particularly least developed African countries, virtually almost all their products are enjoying territory-free treatment by the Chinese customs. Minister Sharma, I'm going to agitate you more, so I'll apologize in advance. You wouldn't be the last one. We know that India's been very active, particularly in secondary and tertiary industries, manufacturing, ICT, media, communications, those kinds of things. But where there is a concern is in agriculture because India's quite active in having an agricultural economy. Africa has that as its comparative advantage for most countries. The Doha round of trade talks are almost stalled on the issue of subsidies for agriculture in Europe and America. And there's a lot of concern about whether or not we can partner on issues of food security as India and Africa. Solutions? Well, India and Africa have been working together for decades for food security and in agriculture. There are very many projects in agriculture, agriculture research, crop diversification, irrigation projects, where India has been through its assistance and lines of credit program doing work in Africa. Many of the Indian corporates are present in the field of agriculture. They are institutional linkages at the first India Africa Forum Summit in April 2008. In addition to doubling the existing, the then existing scholarships in various professional fields, India created an additional stream of fellowships, scholarships, only for agriculture. And they run into hundreds in Africa. Now, it is true that food security is a major challenge. It's going to be there in the next few years. Today, the world is confronted with the same challenge we were in 2008. Food inventories are low, as low as in the 60s. Food inflation is threatening. Food security. Over a billion people today do not have adequate food. They go hungry to bed. Malnutrition in Africa, Asia, South America's in many countries. These are challenges. So we need to work closely together. We are self-sufficient in food, but we also get something from Africa when it comes to pulses, because pulses eat a lot, but we don't have enough. Therefore, I feel that Africa has the potential. If some of the issues, particularly of transfer of technologies, issues of climate change get addressed, because there's de-certification, there's 50 to 60% shortfall in the waters which Africa used to have to irrigate all the major sources are getting depleted. Also, rain-fed agriculture, because of the changing climate patterns is getting affected. So Africa and us, and for that matter, the countries of the world need to work closely together to ensure food security. And connected with that is the energy security. There are larger issues when we look at the million developmental goals, because as I said, the countries of the South, the developing countries, China may be the largest exporting and manufacturing country today, but China also has issues of inclusive growth and sustainable development, and that's why our working together should not be seen as a challenge to anyone, as a competition with anyone. We may have bilaterally issues which are complex, but at the same time we feel the world is big enough to accommodate the rise and aspirations of all of us, because it is the rebalancing of the global economic order which would only ensure that it is equitable and inclusive. OK. Obi is a quacili. Let's change tack a little bit, and let's talk about how the emergence or the rise of the emerging market economies is going to change broader issues of global cooperation and multilateralism. South Africa is also a member of the G20 and we know the G20 is being very active in trying to find solutions post the credit crisis and recession, and there's lots of talk about a lot of things that need to happen. One of the most important being a reform of the IMF, for instance, and then of course the reforms of the Security Council, and it's believed that the BRICS will set the tone for those reforms. Well, I think that those reforms have essentially started. At the World Bank we now have a Ted Chair from Africa, and the member of the Board that represents that Ted Chair is a South African. She used to be your Deputy Governor of your Reserve Bank, and that Ted constituency was a demonstration of the fact that the world is listening to that need to enlarge the space for the participation of a billion people that haven't had the sense that they had enough voice in global governance. The same sentiment is expressed concerning the UN and that's working its way through. Over the end of the street where we are there is the IMF and they also have been working through their own governance to admit of more voice. You know, the advantage that Africa has is that we are embracing a multipolar world and Africa is growing exactly at that time. And because it is growing at this time its economic significance needs to be recognized and it needs to be able to actually project itself as that place that will offer the world the opportunity to be saturated in some other environments at some point. Professor Lawrence, your views on this one how will the BRICS change the dynamics for instance in the stall talks of the WTO currently issues around reforming the permanent membership of the Security Council where at least China has membership and then our calls for maybe South Africa maybe India. Well I would first say that I think there is parity in the economic system that in a sense that's an area where we have seen the governance systems change very dramatically with the developing countries clearly being very strong players. In other areas the easy part actually is representation. The hard part now comes for vision about what the world should look like. In a sense we had global leadership coming from other countries. The downside was perhaps many of the things they wanted to do but the upside was that they could actually get things done. As we move into the multipolar world what we've seen is impasse. Impasse in the trading system unable to advance to a multilateral agreement. Impasse in the climate change agreements. So the real challenge now is for the BRICS to prove that they are able to lead the world to play a role in constructing a global system which reflects their vision. So that's to me the great challenge at the global level for the BRICS. Well it's very interesting because what we have heard is a old mind said so who's living in the past and who's looking at the future. That's important professor with all respect. The world cannot remain frozen in an order which emerged after the Second World War. It's gone. The political architecture and the economic architecture must reflect the contemporary realities of the world. Where you have 60% of the global economic output coming out of the developing countries and not having a voice in the global decision making processes. The United Nations is the only body which can take decisions particularly the Security Council and the countries of the world. Over the years the powers of the General Assembly have been actually expropriated swallowed into the Security Council system and how can you call it representative and a global order in which the entire continent of Africa the largest democracy on the planet that's the Republic of India and entire South America is not represented. We are not going to accept an order where decisions are taken about us without us and that's all what we are saying please make it representative please make it democratic. This was said after the collapse of the Berlin Wall that we have moved into unipolar world order. Unipolarity is not something which the present world will have because the world has to be multipolar Africa is a pole. European Union is a pole. India is one of those poles. India is the largest economy most powerful economy military power but that does not mean that China, Russia and all of us do not have a role to play in the global affairs. Equally our share in the other institutions we are not countries which have benefited out of exploitation we are countries historically who have been left behind for reasons which are better known in the great divide technological divide which came with the industrial revolution. Today things have changed and we have also accessed technologies and we will access more therefore if we are going to contribute to more than two-third of the global economic growth and that is something which is going to happen then the Bretton Wood institutions IMF and the World Bank cannot remain the order they are. My question would be world is still you look at poverty you look at millennium developmental goals where we are you look at the climate change negotiations you refer to climate change we had an interesting debate today now Africa and India put together 2.2 billion of the world's population there is more than one-third close to 40 percent Africa contributes 4 percent to the greenhouse gas emissions per capita India contributes 4 percent Africa's electricity intensity is one-thirteenth as that of the developed countries so who has created the situation and those who have created they must pay the poor countries countries like India and China can innovate, can mitigate can adapt but the other countries must be assisted and that is all what we are saying we need to ask minister Guanyama Shabana for your views very quickly please very quickly El Rato I want to say to fellow panelist that BRICS has come to confirm that multi-polarity is going to be the order of the day and backward we will never go so therefore we need to reform international institutions to respond to this new reality but also to say that as other panelist have said earlier on BRICS is not here as an anti-something it's here as a bridge between the divide, between the north and south but we are saying it's about time that we open the gates we cannot continue to have as minister Shama had said a United Nations Security Council that reflects 1945 today as we are sitting here all members of BRICS are in the G20 all members of the BRICS are in the Security Council albeit many of us for two years and out but the contribution that would want to live and the legacy thereof would want to show that we would want to have been there to make, continue to make the contribution we are making here in Nigeria South Africa is hosting UNFCCC 2011 Brazil is hosting Rio Plus 2012 India is hosting Biodiversity Summit in 2013 so these are the kind of contributions that we will make to the world to make it a better place for all of us on that poignant note I'd like to cross over to Johannesburg CNBC Africa hand over to you for an ad break when we come back we are going to open this discussion to our delegates on the floor for them to pose some of their questions to the panellists to raise issues that maybe we've missed out on and to just elevate this conversation further over to you like a minute and then ten minutes and then we'll go you want water? yeah for about ten minutes yeah sorry thank you sir I've got mine okay no problem can I get just by a show of hands an indication of how many people want to raise questions one, two, three, four, five okay can I say all the questions those are the questions we're asking the gentleman of the back in the middle, two, three, four, five okay and please just keep your comments brief might I ask the microphones in the room are where okay there's one right next to you a gentleman right next to you and then here in front as well and then in the front here as well on this row and then in the middle the gentleman right behind you behind we've got the microphone right there follow my fingers there you go okay please remember to stand up introduce yourself make your point we will start with the gentleman here in front and then the gentleman in the middle and then we will pass the microphones along that way are the microphones on full good afternoon ladies and gentlemen hello can you hear me okay can I start or should I wait to make their views heard we start with the gentleman in front thank you good afternoon my name is Delay Babade I work for a pan-African bank called EcoBank which operates 30 African countries my job is to sell Africa just a couple of comments one comment and then a question a question you'd ask initially I think one of your devil's advocate questions are investors looking at Africa I think simple answer is yes the point I wanted to make and the question I wanted to make was about 10 years ago I went to the Middle East in the vein of this whole south-south thing to talk to the people in the Middle East investors of Middle East about coming to invest in Africa I didn't get a good answer last week I was in the Middle East and it was very different things have changed and I personally think that things have changed and we actually have credible examples it's not just talk to show to people things have changed and I personally think that the change has come from two things the push which has come from some of our countries Obie was part of some of the push where we actually reformed a significant reform in some of our countries and the pull so I'd like to say thank you very much but I think whilst all this is happening my question really to Obie and also to Professor Lawrence as well as we as African countries are we really focusing on what opportunity this has given us in terms of window of opportunity and the opportunity it gives us to restructure our economies so that in 10 years time when I go to the Middle East I can say Africa is a little bit more than a resource and a billion people consumer story that's really where my question is are we really focusing, are people focusing or is everybody enjoying this boom right now and in 10 years time it will be a different thing entirely Obie you first are we going to see a restructuring of African economies I think that countries Am I on? Yes I think that countries are awake to the fact that competitiveness is the rule of the game and that they've got to increase productivity and it takes quite a number of things for that to happen and so the whole center of gravity of deeper reforms structural reforms that change the competitiveness in important sectors take a typical case of Africa energy energy is a big barrier to the competitiveness of the continent even still the major issue is the relevance of the scales that are available in the continent if you are going to take advantage of arriving investment you have to have the critical building blocks that are available I also think that an important thing that Africa is clearly embracing is that it's looking beyond it's even looking within how do we get to that intermediate level of being able to be the suppliers of intermediate possibilities even to our neighbors and use that as a basis to really get into the global level standard that will ultimately enable them to participate in trade beyond Africa and that's key things are slowly happening but what I am concerned about actually is too much emphasis on commodities and beneficiation and too little on Africa's agricultural potential and its manufacturing potential and so I think there needs to be a balance I'm not against the first but we need to see a more balanced approach throughout Africa and I agree with this idea that we need to capitalize on where the markets are going to be in the future and in order to exploit those we have to integrate ourselves because separately Africa cannot provide the necessary scale economies but as an integrated entity we can see specialization and there's a lot of complementarity internally within Africa between expertise that is in certain parts and labor which is in other parts so it's exploiting this diverse base in order to manufacture and to sell agricultural products as well as commodities that's really the challenge for exploiting the opportunities in the world. Okay, the gentleman in the middle, yes sir. Hi, I'm an answering, I'm a filmmaker and it's always very interesting to come to these sessions and you hear about the commodities, you hear about industry mining the creative industries is something that I think as breaks we need to take more seriously the UK economy is represented probably at the highest level today after the mining collapse through the creative industries the Harry Potter films generated billions of dollars, hundreds of billions of dollars, a film like King's Speech costs 7 million pounds and grows 300 million and we have great artists in the brick nations whether it's painters filmmakers in all of those nations, China and I think that there needs to be more attention in these creative industries so I'd love to hear what the panelists think of that. You've got Bollywood. Well, we have got Bollywood we have got Tollywood, we have got the southern Indian films, by far India produces more films maybe then America Europe put together also we are investing in technologies creating institutions whether for film training but also we are the global leaders in the animation film animation and cooperation when it comes to a look at what we have to offer whether South Africa endowed with not resources but in this case what you have said with enormous natural beauty Brazil India China so for the creative minds and film stars enough locations to shoot and adequate infrastructure being built surely in the creative yes, I think the film industry does get to the creative industries do get the financial support but at the same time giving the example of UK, UK has been a major economic power and the major manufacturing power and in financial services they are still very strong and manufacturing is on the decline in most of Europe and I agree with Professor Lawrence that no other sector can create jobs to provide work, sustainable employment to millions and millions of the young sons and daughters of our countries unless and until we will invest more in manufacturing and make people employable by training them in skills, in vocation and also in agriculture Africa I entirely agree still has the potential as I said to meet the food security challenges of the world. My name is James Cameron I'm the founder of an investment business called Climate Change Capital and the chair of the World Economic Reforms Global Agenda Council on Climate Change. I'm interested in how this new alliance of interests can play a constructive role in the reforming economic development so it is cleaner and greener and more resource efficient so that we have sustainable agriculture. We have infrastructure that is low carbon that we use the technologies that have been developed all around the world including in these countries to build a more resilient economy to the shocks that are likely to come if we leave climate change unabated. So I'm curious to know I know many of the individual panelists have strong views and insights into this particular alliance of interests can be brought forward to accelerate the global development of a green economy. Okay minister. Well thanks very much Lerato let me just say that South Africa will be hosting the UNFCCC's COP17 meeting in Deben by end of this year and I have the honour to share with you that I have been appointed by a president and chair of that very important gathering and I know for sure that all BRICS countries around here and even the other members of the panel are committed to make sure that we work towards the operationalisation if not implementation of the outcomes of Mexico but that we will also spend a bit of time to deal with all the unfinished business of Mexico. We are also quite conscious of the fact that we will not finish all the responsibilities or all the items on the agenda in Deben but we will make sure that we resolve developed developing to work together to mitigate against this challenge of climate change. I know for sure that all BRICS countries as the Sanya declaration had confirmed have our own national commitments that we have made to mitigate against this and we have made and we have got our own national plans that would contribute. As I have said earlier on we all have responsibilities that we will be playing at the global stage from Deben we go to Rio and then we go to Delhi. So green economy it is embedded in all our national economic plans starting from China up to India. So we will be making contributions. I know for sure that China has become one of the biggest producers of green technology to help mitigate and all of us here around the table are also doing our bit. In 30 seconds Obi you wanted to add to that. Just simply to say that as far as the matter of adaptation is concerned this is one aspect where the role of South Africa needs to be really important for the rest of Africa because as you know there are important aspects in agriculture that need to get on the agenda on climate change. The water risk issues the forestry, sustainable management of forestry through the red plus all the things that have to do with embracing the hydro potentials of the continent and the carbon financing that it would require is enormous and the BRICS can be part of that process of the financing issue as well as the technology issue because India for example is beginning to look at the technology issues in a way that is very very important for its important partners in Africa. On that wise an optimistic note unfortunately the gatekeepers at CNBC Africa say we have to wrap it we're feeding into existing programming so let me say a hearty attitude. Professor Robert Lawrence thank you for your time. He's the Albert L. Williams Professor for Trade and Investment at the Harvard Kennedy School also to Ambassador Liu Guijing who's a special representative on African affairs from the Ministry of Foreign Affairs for the People's Republic of China thank you for rolling with the punches here this afternoon. Let me also thank Mrs. Obie Gehle who's the Vice President for Africa at the World Bank. Certainly your views on business and international relations and cooperation for the Republic of South Africa all fired up the Minister of Commerce and Industry in India Arun and Sharma thank you also for setting us straight. Thank you to our audience here thank you for your time and thank you for watching this video. Thank you for watching this video. Thank you for watching this video. Thank you for watching this video. Thank you for watching this video. Thank you for your time and thank you for watching this special broadcast right here on CNBC Africa. We're first in business worldwide.