n Journal of Law, Society and Development - BRICS and sub-Saharan Africa trade interdependence and peace : evidence based on revealed comparative advantages
|Article Title||BRICS and sub-Saharan Africa trade interdependence and peace : evidence based on revealed comparative advantages|
|© Publisher:||UNISA Press|
|Journal||Journal of Law, Society and Development|
|Affiliations||1 University of South Africa|
|Publication Date||Jan 2015|
|Pages||4 - 28|
|Keyword(s)||BRICS, Economic integration, Merchandise exportation, Peace and stability, Revealed comparative advantage, Structural transformation and Sub-Saharan Africa|
This study examined economic integration through trade between BRICS (Brazil, Russia, India, China and South Africa) countries and sub-Saharan Africa. The study examines the comparative advantages of the two economic blocks with respect to the exportation of merchandise (food, agricultural raw materials, fuels, ores and metals, and manufactures). The findings of this study reveal the actual status of these two regions as economic partners in each of the five sub-sectors of merchandise exports. The trend shows that, with the exception of manufactures exports, the competitiveness of all sub-sectors of the merchandise exports of BRICS is characterised by a declining trend. BRICS has a comparative advantage in the world in the exportation of manufactures and fuels, and comparative disadvantage in the export of food, agricultural raw materials, and ores andmetals. Interestingly, manufactures are continuously and consistently in a steadily rising trend. This is evidence that BRICS's structural transformation towards higher valued-added commodities is proceeding well, which means that policy makers should be considering ways of enhancing it further. In the case of sub-Saharan Africa, with the exception of manufactures exports, it is found to have comparative advantages in all merchandise exports. Sub- Saharan Africa's competitive advantage is the highest in the exportation of ores and metals, followed by fuels, agricultural raw materials and food. Sub-Saharan Africa has a comparative disadvantage in the export of manufactures throughout the period considered in this study. This implies that the prospects of structural transformation to downstream of the higher value-added commodities export part of the supply chain are good: the slow pace of transformation towards higher value-added goods should therefore be demanding the attention of policy makers. The study has revealed that sub-Saharan Africa is more competitive than BRICS in the exportation of ores and metals, fuel, agricultural raw materials and food. On the other hand, BRICS is more competitive than sub-Saharan Africa in the export of manufactures.The study has also revealed that significant economic integration can be sustained between BRICS and sub-Saharan Africa in the exportation of all merchandise sub-sectors. Specifically, sub-Saharan Africa is a potential destination market for BRICS's exports of manufactures. Conversely, BRICS is also a potential destination market for sub-Saharan Africa's exports of ores and metals, fuel, agricultural raw materials and food. Economic integration between BRICS and sub-Saharan Africa favourably influences peace and stability in the regions. Sustaining peace and stability in these regions also favourably influences the well-being of the communities.
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