WeeklySA_AdminSCENARIO: De-dollarisation drive, economic growth prospects, geopolitical tensions fuel BRICS appeal…
By Igor Kuznetsov
BRICS has proven itself to be an increasingly desirable club to join, since it offers dynamic and profitable business prospects, especially in light of the de-dollarization trend and geopolitical tensions, Sergio Rossi, professor of Macroeconomics and Monetary Economics at the University of Fribourg, Switzerland, told Sputnik.
Lately, numerous nations have lined up to knock on BRICS’ door, and that number continues to rapidly grow. The ever-increasing popular bloc of emerging economies is made up of Brazil, Russia, India, China and South Africa and accounts for 25% of global GDP.
Last year, Iran and Argentina officially filed to join BRICS alongside 11 other applicants. Several nations have shown their eagerness to join up as well, including Egypt. Recently, Algerian President Abdelmadjid Tebboune called for accelerating his country’s entry to BRICS.
“The BRICS circle is becoming increasingly appealing to other countries, as it represents an interesting and profitable business opportunity for a growing number of stakeholders across the global economy, particularly as a result of the increasing willingness to get rid of the so-called dollar-dominance, which has been dictating both firms and governments’ decisions in emerging and developing economies around the world.
As the number of countries in such a circle increases, the benefits for them become more and more relevant, particularly in regard of economic growth and business opportunities. The geopolitical tensions that are currently affecting a number of European economies provide an additional factor for participating in the BRICS club before long,” Sergio Rossi said.
Many experts and officials believe that with America’s “unipolar moment,” a popular term coined by Charles Krauthammer in the early 1990s, on the wane as multipolarity rises, BRICS has becoming increasingly more credible than any of the Washington-led organizations.
The reasons behind it are several, ranging from relentless US attempts to maintain its dominance at all costs to the so-called “exorbitant privilege” provided by the US through the dollar’s role as the international reserve currency, to which BRICS appears to offer a viable alternative.
“The main reasons for this shift to the BRICS community are twofold. On the one hand, it has become crystal clear that the US policy stance is a major factor of geopolitical tensions across the global economy, particularly as regards foreign trade and economic development.
On the other hand, Washington-led organizations have been trying to preserve the key role of the US dollar in the global economy as well across financial markets, where a still increasing number of financial institutions have been suffering from the US-dollar dominance, since the US banking sector has revealed its own systemic financial fragility in the aftermath of Silicon Valley Bank’s collapse, which induced a domino effect affecting other regional banks rapidly and dramatically for both their depositors and shareholders,” Rossi said.
In late March, Egypt formally applied to join the New Development Bank (NDB) founded under the auspices of BRICS, raising the obvious question: what could the North African country possibly offer the bloc and vice versa?
“Egypt represents an interesting market for BRICS countries, as regards foreign trade as well as foreign direct investment opportunities. Economic and financial activities could benefit of Egypt’s entry to the BRICS club, whose dynamics might be supported by this entry.
There is a ‘win-win’ dynamics that could give rise to a regional economic and financial integration in order to offer an alternative currency area with regard to the US-dollar dominance across the global economy,” Rossi explained. – Sputnik International News
BUSINESS INDABA TO EXPLORE SUPPORT TO INFORMAL SECTOR
BOOST: Townships remain hive of activity but problem is how to unlock their potential to generate benefits…
By Isaac Moledi
The two-day inaugural Township Economies Conference and Expo to take place at the Emperors Palace in Ekurhuleni on the East Rand on Monday will highlight multiple challenges and opportunities township businesses faced due to their location in underserved black communities.
This is according to conference and expo organizer, Siyenza Management. The two-day event, from June 20 to 21, presents a distinctive opportunity to cultivate a culture of entrepreneurship and will enable small, medium and micro enterprises (SMMEs) to access skills development, leading to long-term growth and business opportunities.
The organizers describe the event, which will be addressed by, among others, the country’s renowned black business leaders and individuals, as a one-stop destination for township entrepreneurs as it will explore support services to the informal market sector, focusing on the challenges and opportunities these entrepreneurs faced.
Retail businesses such as spaza shops, fast food outlets, bakeries, shebeens and hawkers dominate the informal township economy. Additional businesses include backroom rentals, minibus taxi operators, mechanics and panel beaters, metal fabricators, childcare services, barbers and hair salons among others.
The Executive Mayor of the City of Ekurhuleni, Sivuyile Ngodwane will welcome the participating guests while executive chairman of GBSH Consult Group, Ambassador Tal Edgars, will deliver the keynote address.
Other speakers have been sourced from a variety of local and international business organisations.
These include representatives from the Black Business Council, Township Economies Commission of SA and Nafcoc.
“Townships are often left behind in the economic growth of cities. In a country with an unemployment rate of over 35%, the informal sector is a lifeline to countless families who lack formal employment,” according to Siyenza .
“By understanding the challenges of entrepreneurs and providing them with the tools they need to overcome these obstacles, we can enable them to flourish and grow their businesses, thereby strengthening our economy as a whole.”
With the country’s unemployment currently hovering above 35% with an estimated 17% of South Africa’s total employment emanating from the informal economy, it is hoped that this conference will offer a lifeline for countless families without formal employment.
But skeptics remain doubtful of the positive outcome of the event saying countless number of conferences held on behalf of black entrepreneurs with the promise that their businesses will prosper had in the past failed. They wondered if this was not another talk shop.
Most businesses are brought into existence for survival with little or no understanding of costs, responsibilities, markets, funding needs and other requirements of the business such as a lack of proper financial records and systems and technology.
In addition, these businesses lack the systems necessary to handle growth or deal with associated risks.
According to some experts, it is surprising that for a country where about 60% of the unemployed come from townships and the informal settlement, these areas are often left behind in the economic growth of the cities. “Townships have always been a hive for entrepreneurial activity, but the main challenge has always been unlocking the potential in order to generate broader economic benefits,” noted one analyst.
And, according to experts, despite the government initiatives to develop the townships, these townships remain as they were initially conceived – spatially disconnected and alienated from mainstream economic activity.
But Siyenza insists that the event aims to help SMME’s thrive by providing the necessary tools to transition from an informal business landscape into a formal one.
“The conference will also expose them to other markets, offering opportunities for government and big business procurement. Additionally, it will empower service providers to showcase skillsets, access financial mechanisms and facilitate trade between SMMEs.
The theme for the 2023 event is “Creating Growth Entrepreneurs,” which Siyenza says will serve as a catalyst for enterprise development, aiding the growth and development of township economies to deliver not only more jobs but business growth and economic activity.
According to Siyenza, the Expo on the other hand will offer companies a productive space to access new markets.
“While the Finance Centre is set to showcase the latest trends and provide financial support and access to finance for entrepreneurs, the
How-to Centre will facilitate ways to start a business, register it, provide tax support and more.”
