Barry Streek
Countries in the developing world have to work together in international trade and in institutions to gain influence on issues such as globalisation. This is the view of Minister of Trade and Industry Alec Erwin as published in the latest edition of New Agenda, published by the Institute for African Alternatives.
“It is very dangerous to be isolated. You really need to get common positions on services with a number of other countries,” Erwin said in an interview with the institute’s founder member, African National Congress MP Ben Turok.
“If we are well organised and have India, China, Brazil, five countries in Africa and South-East Asia, that’s a massive chunk of the world economy all sorts of options open to you tactically and strategically.”
Such an alliance, Erwin argues, allows for agreements to be entered between parties in areas such as trade and agriculture.
Forty of the developing economies make up 50% of the world’s population, for example, and can use their muscle to influence world events and developments.
Erwin said that because of South Africa’s unusual position, it had been able to play an important catalysing role for developing countries in bodies like the World Trade Organisation.
“That’s been our main objective, to bring more negotiating muscle, and bring together the bigger economies and the developing world. We develop our positions and then argue them. It is an important terrain for South Africans because negotiation is our bread and butter.”
Erwin said it would be dangerous for South Africa not to be involved in these organisations because they took decisions that affect the country’s economy.
Erwin said conditions have changed in that models that were successful for developed economies are today shunned, and cannot be used by developing countries.
“I don’t think anyone would be contemplating going back to heavy subsidies and would prefer very much more sophisticated instruments, as South Africa does.”
He cited instruments such as the Industrial Development Corporation (IDC)as an example.
“We can’t develop a manufacturing sector without having an instrument like the IDC. It accounts for 25% to 30% of all fixed investment in manufacturing and it really plays an important role.”