A striking observation emerges over the recent period relative to the structure of international economic relations. Part of the developing world has gained momen-tum and competes today with the “old” industrialised countries for leadership in the world economy (Moghadam, 2011). Among this emerging group, the BRICs (Brazil, Russia, India and China) are predominants. From 2000 to 2008, they accounted for half of the world economic growth while the rest was still largely generated by some developed countries (United States, United Kingdom, Germany, France, Canada and Italy) up to the end of the 20th century. Moreover, recent studies forecast that these new “economic giants” will contribute 61% of world GDP against only 13%
for the industrialised countries from 2008 through 2014. At the same moment, many sub-Saharan African (SSA) countries display an economic growth performance sig-nificantly higher than during the past three decades (Martinez and Mlachila, 2013).
Recent analysis seems to confirm that this region resisted the international crisis without major damages, since 2008, although the world was hurt by a global con-traction of more than 2%: SSA always showed economic growth rates above 2%
(Allen and Giovannetti, 2011).
These two interesting changes are, of course, related. The growing importance of these emerging economies has given a significant push to the economic growth of most countries belonging to the subcontinent2, which constitutes a crucial factor for a sustained economic development process in the long run3 (Moghadam, 2011 ; He, 2013). Note that this results mainly from foreign trade4. In this regard, three
2These good economic performances were also driven by the implementation of sound macroe-conomic policies in many African economies over the recent period.
3The BRICs’ contribution to sub-Saharan Africa’s economic growth also rose during the inter-national financial crisis, especially for raw goods exporters.
4Productivity gains in the BRICs and inward foreign direct investment flows from BRICs are
elements must be discussed. First, bilateral trade flows have strongly increased since the beginning of the 2000s due to narrow complementaries between comparative advantages of Africa and increasing energy needs from the productive sector of the BRICs. Even if the European Union and the United States are main partners of Africa, their share in African trade has decreased significantly and continuously in favour of the new giants of the world economy (Subramanian and Matthijs, 2007).
Furthermore, the BRICs became the first trade partners of SSA among the whole developing world. Second, the BRICs’ economic rise created a good climate for African producers5 by improving terms of trade due to the increase in raw goods prices6 (Zafar, 2007 ; Wang, 2007). Third, BRICs give the opportunity to African consumers to benefit from cheap imports.
Among this group, one country, namely China, largely differs from the others by its contribution to the global growth (one-fourth of the world GDP growth) and its share in SSA trade. The new direction of Chinese foreign policy (Gu et al., 2008 ; Brautigam, 2010), its dependence on energy resources and the need to strengthen basic infrastructure in Africa led to a strong rise in China-SSA trade by a 168 factor for African exports and by a 5.4 factor for African imports from 1980 through 2009.
China has become today the first exporting country and the second-largest importing country of African goods, just behind the United States (De Grauwe et al., 2012).
“The trade channel accounts for around 60 percent of the impact of BRICs on LIC
other significant factors.
5Note that the development of the BRICs, and in particular of China, has also had some adverse effects on the African productive sector. Indeed, Chinese exports in manufactured goods compete directly with African industrial goods in both internal and external markets (Kaplinsky and Morris, 2008 ; Renard, 2011). In several African countries, infant industries in the textile and clothing sectors have been crowded out by Chinese low-cost imports (Subramanian and Matthijs, 2007).
6The increase in world prices of raw goods results from a demand effect due to the rapid development of industrial activity and thus energetic needs in the new, large, emerging countries.
growth. [...] The response in African LICs is particularly strong, reflecting the growing trade ties that these countries have forged with BRICs in recent years”
(Moghadam, 2011). So it is not surprising that a large part of the literature focuses on the specificities and the determinants characterising trade relations between China and SSA countries (Zafar, 2007 ; De Grauwe et al., 2012).
Contrary to China, very few works have studied trade relations between SSA economies and the three other BRICs (Moghadam, 2011). However, their share in world trade and in Africa is growing sharply (World Bank, 2011). Thus it is also crucial to identify what drives trade flows between SSA and Brazil, India and Russia.
Otherwise, BRICs do not constitute a homogeneous group in the international trade area (Cooper and Fues, 2008 ; Moghadam, 2011). In the first place, China, India and Brazil mainly import natural resources (oil, minerals, metals), contrary to Russia, which is well endowed in this domain. Second, China exports almost exclusively manufactured and capital goods, although the three others show a more diversified structure with a notably significant part of agricultural goods. Then, we cannot generalise the Chinese case to the other group members.
This article aims at studying the nature of this surge in trade between SSA and BRICs (Parikh and Shibata, 2004 ; Jenkins, 2006) through South-South trade.
What explains the rise of the BRICs in Africa? Do these trade factors differ across BRIC countries in SSA trade relationships? From a worldwide database over the period 1980-20127, we introduce into the gravity model specific interaction terms to identify relationships between SSA and each BRIC country, taken individually, with some control variables traditionally used by the specialised literature (income dissimilarity, geographic distance, language, democracy, WTO membership, resource endowments, and terms of trade). This approach better captures the heterogeneity of
7Database (Head etal., 2010): http://strategy.sauder.ubc.ca/head/sup/index.html.
BRIC countries as far as bilateral trade flows with SSA is concerned. More precisely, we use a structural gravity equation theoretically founded by taking into account multilateral resistance developed by Anderson and van Wincoop (2003) through fixed effects, and robust by resolving both omission bias and heteroskedasticity with a PPML-fixed effects estimator (Santos Silva and Tenreyro, 2006 ; Santos Silva and Tenreyro, 2011 ; Fally, 2015). Finally, these econometric methods should allow us to test whether the trade factors linking SSA and BRICs are country-specific.
The rest of this chapter is structured as follows. Section 2 presents an overview of trade relationships between SSA and BRICs. Section 3 exposes the gravity spec-ifications and the estimation methods retained. Section 4 shows and discusses the results. Section 5 concludes.