A Systems View of BRICS Value Chains, South Africa and BRICS participation in African Continental Free Trade Area
Main Article Content
Keywords
BRICS, Systems Analysis, BRICS value chains, African Continental Free Trade Area, Africa
Abstract
Global value chains have shaped world production and trade. This research article examines the connections between the value chains of the BRIC economies and South Africa's role in positioning BRICS-Africa trade as a member of the African Continental Free Trade Area (AfCFTA) using BRIC value chains that has been tailormade to increase BRICS share of the AfCFTA market. It argues that in order for BRICS's to increase its competitiveness in AfCFTA and the global market, intra-BRICS trade should be based on value chains that has been developed specifically to support BRICS and provide it with the competitive leverage necessary to explore new market opportunities. AfCTA presents such a market. Additionally, the article reveals that for BRICS to succeed in AfCFTA through its value chains, it must recognise South Africa's potential (to host some of these) and its geographic location on the African continent. Furthermore, BRIC needs to appreciate that South Africa can successfully host some of BRIC nations' value chains. This indicates that South Africa's membership of BRICS and AFCTFA provides an opportunity that can benefit BRICS through its participation in AfCFTA using value chains approach. This however requires academic interrogation, which will yield information and knowledge that can be used to formulate programmes, policies and strategies of how BRICS value chains can be of significant support to AfCFTA.
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References
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Kuroiwa, I. (2021). Method of value chain mapping with international input–output data: application to the agricultural value chain in three Greater Mekong Subregion countries. Journal of Economic Structures, 10(1): 1–23. https://doi.org/10.1186/s40008-021-00235-7
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Mazenda, A. (2016). Development of BRICS Bilateral Trade Relations: A South African Perspective. Nile Journal of Business and Economics, 2: 17-32. https://doi.org/10.20321/nilejbe.v2i2.49
Mazenda, A. & Masiya, T. (2018). The Geopolitics of the BRICS Trade Policy and Implications for South Africa. In de Vries, M.S., van Dijk, G. & Chitiga-Mabugu,M. (eds). Public Administration: Reflection, Relevance and Readiness. Pretoria. NISPAcee 233-254
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Muflikh, Y.N., Smith, C. & Aziz, A. (2021). A systematic review of the contribution of system dynamics to value chain analysis on agricultural development. Agricultural Systems,189. https://doi.org/10.1016/j.agsy.2020.103044.
Organisation for Economic Co-operation and Development (OECD), (2007); Moving Up the Value Chain: Staying Competitive in the Global Economy. Available: https://www.oecd.org/sti/ind/38558080.pdf
OECD. (2019). Brazil/Central African Republic. [Online]. Available: https://oec.world/en/profile/bilateral-country/bra/partner/caf [2022, January 19].
O’Neill, J. (2007). BRICs and beyond. Goldman Sachs Economic Research Group. New York: Goldman-Sachs.
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Seniuk, N. (2019). BRICS Countries in Global Value Chains, Strategic Analysis, 43(6):509-531, https://doi.org/10.1080/09700161.2019.1669900
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Usman, Z & Landry, D. (2021). Economic Diversification in Africa: How and Why It Matters. Carnegie Endowment for International Peace. [Online]. https://doi.org/10.2139/ssrn.3842228
Vermeire, J, Bruton,G and Cai,C (2017) Global value chains in Africa and development of opportunities by poor landholders. Review of Social Economy. 75(3), 280-295. https://doi.org/10.1080/00346764.2016.1238103
Vinicius de Freitas, (2016). Brazil and Africa : Historic Relations and Future Opportunités. Available: https://www.gmfus.org/sites/default/files/Freitas_BrazilAfrica_Feb16.pdf [2021, September 30].
Workman, D. (2021). South Africa’s Top 10 Exports 2020. [Online]. Available: https://www.worldstopexports.com/south-africas-top-10-exports/ [2021, September 18].
Ye, M. & Voigt, S. (2014). The Global Value Chains in Brics Countries. Fudan Journal of the Humanities and Social Sciences, 7(3): 411–420.https://doi.org/10.1007/s40647-014-0032-0
Zhang, G. (2021). February 19 AfCFTA: A More Integrated Africa in the Global Supply Chain.upply [Web log post]. Available: https://market-insights.upply.com/en/afcfta-a-more-integrated-africa-in-the-global-supply-chain [2022, January 27].
Asuelime, L.E. (2018). The Pros of South Africa’s Membership of BRICS: A Re-appraisal. Journal of African Union Studies,7(1):129-150. https://doi.org/10.31920/2050-4306/2018/v7n1a7
Boys, J. & Andreoni, A. (2020). Promoting industrialization Africa global versus regional value-chains. Globaldev. [Online]. Available: https://globaldev.blog/blog/promoting-industrialization-africa-global-versus-regional-value-chains [2022, January 19].
Brent, A.C. & Simelane, T. (2017). System Dynamics Models for Africa’s Developmental Planning. Africa Institute of South Africa. Pretoria.
Buturac, G. (2013). Beyond the Global Recession: Mutual Trade and Economic Convergence. Ekonomski Pregled, 64(4): 303–326. doi: http://hrcak.srce.hr/ekonomski-pregled?lang=en.
Chen, L. (2012). The BRICS in the global value chains: an empirical note. Cuadernos de Economia ·. Available: file:///c:/users/splst/downloads/lc2012rcethebricsintheglobalvaluechainsanempiricalnote.pdf [2021, September 19].
Checkland, P. (1981). Systems thinking, systems practice. Chichester. John Wiley and Sons, NY.
Clifford, C. (2021). 12 July. The Bear is back: Russian re-engagement with Africa is picking up with Putin in the driving seat. Africa Portal [Web blog post]. Available: https://www.africaportal.org/features/bear-back-russian-re-engagement-africa-picking-putin-drivingseat/#:~:text=Russia%20is%20a%20major%20supplier,and%20Africa%20are%20also%20growing. [2022, January 23].
De Backer, K and Yamano, N (2011); International Comparative Evidence on Global Value Chains Available at SSRN: https://ssrn.com/abstract=2179937 or https://doi.org/10.2139/ssrn.2179937
Del Prete,D, Giovannetti, G, and & Marvasi, E (2018). “Global value chains: New evidence for North Africa,” International Economics, CEPII research center, 153,42-54. https://doi.org/10.1016/j.inteco.2017.03.002
De Marchi,V Giuliani, E and Rabellotti,R (2018). “Do Global Value Chains Offer Developing Countries Learning and Innovation Opportunities?” The European Journal of Development Research, Palgrave Macmillan; European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 389-407. https://doi.org/10.1057/s41287-017-0126-z
Devonshire-Ellis, C. (2019). The BRICS Nations Are Headed For 50% Of Global GDP By 2030. This Is What It Could Mean for Developing Global Supply Chains & Emerging Consumer Markets. Silk Road Briefing. [Online]. Available: https://www.silkroadbriefing.com/news/2019/11/21/brics-nations-headed-50-global-gdp-2030-mean-developing-global-supply-chains-emerging-consumer-markets/ [2021, September 19].
Farole, T, (2016), Do global value chains create jobs?, IZA World of Labor, issue , number 291, Available:https://EconPapers.repec.org/RePEc:iza:izawol:journl:y:2016:n:291 or https://doi.org/10.15185/izawol.291.
Gereffi & Fernandez-Stark, (2016). Global Value Chain Analysis: A Primer. Technical Report. Duke, 2nd ed, 1-32. Centre on Globalisation, Governance and Competitiveness. North Carlorina
Goldberg, P., Amit, K., Nina, P. & Petia, T. (2010). Imported Intermediate Inputs and Domestic Product Growth: Evidence from India. Quarterly Journal of Economics, 125 (4): 1727-1767. https://doi.org/10.1162/qjec.2010.125.4.1727
Hernández, R. A., Martínez‐Piva, J. M. & Mulder, N. (2014). Bulletin of Latin American Research, Global Value Chains and World Trade: Prospects and Challenges for Latin America. Economic Commission for Latin America and the Caribbean (ECLAC). Santiago, Chile.
Horner, R. (2021). Global value chains, import orientation, and the state: South Africa’s pharmaceutical industry. J Int Bus Policy. https://doi.org/10.1057/s42214-021-00103-y (Online First).
Ignatenko, Raei, and Mircheva, (2019). Global Value Chains: What are the Benefits and Why Do Countries Participate? INF Working Paper. Available: chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/viewer.html?pdfurl=https%3A%2F%2Fwww.annaignatenko.com%2Fwp1918.pdf&clen=1700691&chunk=true
Kee, H, L (2015). Local intermediate inputs and the shared supplier spill overs of foreign direct investment. Journal of Development Economics, 112: 56-71. https://doi.org/10.1016/j.jdeveco.2014.09.007
Kee, H.L. (2016). How has China moved-up the global value chains. [Online]. Available: https://blogs.worldbank.org/developmenttalk/how-has-china-moved-global-value-chains [2022, January 23].
Kuroiwa, I. (2021). Method of value chain mapping with international input–output data: application to the agricultural value chain in three Greater Mekong Subregion countries. Journal of Economic Structures, 10(1): 1–23. https://doi.org/10.1186/s40008-021-00235-7
Makgetla, N., Levin, S. & Mtanga, S. (2019). Moving up the copper value chain in Southern Africa. WIDER Working Paper 2019/52. UNU-Wider. Helsinki. https://doi.org/10.35188/UNU-WIDER/2019/686-9
Mazenda, A. (2016). Development of BRICS Bilateral Trade Relations: A South African Perspective. Nile Journal of Business and Economics, 2: 17-32. https://doi.org/10.20321/nilejbe.v2i2.49
Mazenda, A. & Masiya, T. (2018). The Geopolitics of the BRICS Trade Policy and Implications for South Africa. In de Vries, M.S., van Dijk, G. & Chitiga-Mabugu,M. (eds). Public Administration: Reflection, Relevance and Readiness. Pretoria. NISPAcee 233-254
Miao, M., Yushi, J. & Borojo, D.G. (2020). The impacts of China–Africa economic relation on factor productivity of African countries. Economies, 8(2):47. https://doi.org/10.3390/economies8020047
Muflikh, Y.N., Smith, C. & Aziz, A. (2021). A systematic review of the contribution of system dynamics to value chain analysis on agricultural development. Agricultural Systems,189. https://doi.org/10.1016/j.agsy.2020.103044.
Organisation for Economic Co-operation and Development (OECD), (2007); Moving Up the Value Chain: Staying Competitive in the Global Economy. Available: https://www.oecd.org/sti/ind/38558080.pdf
OECD. (2019). Brazil/Central African Republic. [Online]. Available: https://oec.world/en/profile/bilateral-country/bra/partner/caf [2022, January 19].
O’Neill, J. (2007). BRICs and beyond. Goldman Sachs Economic Research Group. New York: Goldman-Sachs.
Rasiah,R Kong, X-N, and Vinanchiarachi, J (2011).Moving up in the global value chain in button manufacturing in China,” Asia Pacific Business Review, Taylor & Francis Journals, vol. 17(2),161-174. https://doi.org/10.1080/13602381.2011.533508
Russian briefing. (2021). Russia’s Increasing Trade Ties with Africa: Interview with the Chairman of Afreximbank as Russia-African trade exceeds US$20 billion. [Online]. Available: https://www.russia-briefing.com/news/russia-s-increasing-trade-ties-with-africa.html/ [2022, January 27].
SAIIA, (2015). What impact could the 21st Century Maritime Silk Road have on South Africa? Available: https://saiia.org.za/research/what-impact-could-the-21st-century-maritime-silk-road-have-on-south-africa/ [2021, September 23].
Seamus, G. (2021). Decoding China’s Export Miracle: A Global Value Chain Analysis, Economic Geography, 97(5): 521-523, https://doi.org/10.1080/00130095.2021.1959313
Seniuk, N. (2019). BRICS Countries in Global Value Chains, Strategic Analysis, 43(6):509-531, https://doi.org/10.1080/09700161.2019.1669900
Staritz, C Plank, L and Morris, M (2016). Global Value Chains, Industrial Policy, and Sustainable Development – Ethiopia’s Apparel Export Sector. Geneva: International Centre for Trade and Sustainable Development (ICTSD).
Statista. (2022). Export of goods by the BRICS countries from 2000 to 2020. [Online]. Available: https://www.statista.com/statistics/254301/exports-of-the-bric-countries/#statisticContainer [2022, January 24].
Strange, R. & Humphrey, J. (2019). What lies between market and hierarchy? Insights from internalization theory and global value chain theory. Journal of International Business Studies, 50(8): 1401-1413. https://doi.org/10.1057/s41267-018-0186-0
Trading Economics. (2021). South African Exports. Available: https://tradingeconomics.com/south-africa/exports [2021, September 22].
Trading Economics. (2022). Brazil Exports to Africa. [Online]. Available: https://tradingeconomics.com/brazil/exports-to-africa#:~:text=Exports%20to%20Africa%20in%20Brazil%20is%20expected%20to%20be%20644.18,according%20to%20our%20econometric%20models. [2022, January 19].
UNCTAD (2021). Transforming Southern Africa harnessing regional value chains and industrial policy for development. [Online]. Available: https://unctad.org/system/files/official-document/gdsecidc2021d1_en.pdf [2022, January 19].
Usman, Z & Landry, D. (2021). Economic Diversification in Africa: How and Why It Matters. Carnegie Endowment for International Peace. [Online]. https://doi.org/10.2139/ssrn.3842228
Vermeire, J, Bruton,G and Cai,C (2017) Global value chains in Africa and development of opportunities by poor landholders. Review of Social Economy. 75(3), 280-295. https://doi.org/10.1080/00346764.2016.1238103
Vinicius de Freitas, (2016). Brazil and Africa : Historic Relations and Future Opportunités. Available: https://www.gmfus.org/sites/default/files/Freitas_BrazilAfrica_Feb16.pdf [2021, September 30].
Workman, D. (2021). South Africa’s Top 10 Exports 2020. [Online]. Available: https://www.worldstopexports.com/south-africas-top-10-exports/ [2021, September 18].
Ye, M. & Voigt, S. (2014). The Global Value Chains in Brics Countries. Fudan Journal of the Humanities and Social Sciences, 7(3): 411–420.https://doi.org/10.1007/s40647-014-0032-0
Zhang, G. (2021). February 19 AfCFTA: A More Integrated Africa in the Global Supply Chain.upply [Web log post]. Available: https://market-insights.upply.com/en/afcfta-a-more-integrated-africa-in-the-global-supply-chain [2022, January 27].
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A Systems View of BRICS Value Chains, South Africa and BRICS participation in African Continental Free Trade Area. (2023). Journal of BRICS Studies, 1(2), 85-94. https://doi.org/10.36615/jbs.v1i2.2301
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A Systems View of BRICS Value Chains, South Africa and BRICS participation in African Continental Free Trade Area. (2023). Journal of BRICS Studies, 1(2), 85-94. https://doi.org/10.36615/jbs.v1i2.2301