Alexey Ulyukaev, Minister of Economic Development Russian Federation: Interview

Alexey Ulyukaev, Minister of Economic Development, Russian Federation

Interview: Alexey Ulyukaev

Where do you see the greatest scope for increasing Russia-South Africa trade and cooperation?

ALEXEY ULYUKAEV: We have been actively developing economic and trade relations with South Africa for many years. The volume of our bilateral trade has increased almost six times over the last eight years and has now reached about $1bn. In fact, South Africa ranks first among Russia’s economic trade partners in sub-Saharan Africa, accounting for one-third of the gross turnover of the region, hence the priority status South Africa holds among our partners in the region.

The most promising areas for bilateral cooperation in the coming years will be in sectors such as nuclear energy, mining, transport, infrastructure, aviation, telecommunications, and finance and innovation. There is also huge potential for growth within agriculture, a traditional sector of cooperation for our two countries. South Africa is already a notable supplier of citrus fruits, grapes, wine and other agricultural products to the Russian market, and now that Russia is interested in increasing imports of tropical products, South Africa has a good opportunity to expand its presence in this market.

As the undisputed economic leader of the continent, South Africa is in an advantageous position to enable companies to implement investment projects in the country. However, in terms of ease of doing business, there are some regulatory issues that South Africa should address in order to quicken the flow of investment. That being said, we have taken note of the reforms which aim at facilitating foreign investments, and we are confident going forward.

What benefits will further financial integration amongst BRICS members have?

ULYUKAEV: The creation of the New Development Bank (NDB) and the relevant pool of foreign exchange reserves will undoubtedly strengthen the relationship between the BRICS countries and will contribute to the diversification of the global financial system. In the establishment of financial institutions, BRICS has demonstrated the ability of our countries to coordinate our efforts, and to make major decisions regarding the creation of real mechanisms of cooperation in the financial and economic fields.

To be clear, the NDB is not an alternative to existing international financial institutions. Rather, the establishment of the NDB, and similarly, the creation of the Asian Infrastructure Investment Bank, will be an incentive for our Western partners in the IMF to find ways to unblock deadlocks in IMF reform.

The scale of the pool of reserves of the NDB, with its total capitalisation of $200bn, will be less than that of the IMF. However, our strategy going forward is intended to have a different focus. Joint projects such as financing infrastructure programmes, and undertaking major projects in the field of sustainable development, are examples of the practical stance economic cooperation in BRICS will take. For this purpose a trade, economic and investment cooperation roadmap has been prepared between the BRICS members that will run until 2020.

What impact will the Bali trade agreement have on Africa’s emerging markets?

ULYUKAEV: The Agreement on Trade Facilitation, adopted in Bali in December 2013, is designed to reduce the time and costs associated with goods crossing the border. According to experts, trade transaction costs associated with Customs procedures reach the highest level in developing and least-developed countries, including those in Africa. Small and medium-sized businesses suffer from this. Elimination of trade barriers, coupled with increased technical assistance to facilitate trade, will create new opportunities for these countries to create a more modern Customs system, and as a result of the agreement, world trade can save up to $1trn annually.

Anchor text: 
Alexey Ulyukaev

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The Report: South Africa 2016

The Report

This article is from the Country Profile chapter of The Report: South Africa 2016. Explore other chapters from this report.