South Africa joins BRIC with China’s support

Author: Sanusha Naidu, Human Sciences Research Council

This year has certainly started off on a high note for South Africa’s foreign policy ambitions. Assuming its two-year non-permanent rotational seat on the United Nations Security Council and becoming the fifth member of BRIC, it is clear that the charm offensive of President Zuma’s 2010 BRIC foreign policy diplomacy has paid off.

Of course for some analysts, like Goldman Sachs economist Jim O’Neill, South Africa was not seen as a suitable candidate. O’Neill is recorded as saying: ‘It is not entirely obvious to me why the BRIC should have agreed to ask South Africa to join. How can South Africa be regarded as a big economy? And, by the way, they happen to be struggling as well.’

For O’Neill and other skeptics, the concern is really about whether South Africa’s economic clout is on par with, or complements that of its fellow members to make the BRIC club a global economic hegemon by 2050.

South Africa’s economy, population and growth rate are much smaller than all the other BRIC members. The country’s GDP last year was US$286 billion, far less than the $2 trillion of India and Brazil, China’s $5.5 trillion and even Russia’s $1.6 trillion. South Africa has recorded a tepid 3 per cent economic growth, well behind other BRIC members. Its population of 50 million is dwarfed by that of China and India.

There are a number of better performing emerging economies, like South Korea, Turkey, Mexico and Indonesia. These countries have GDPs that outstrip South Africa’s by a fair margin. South Africa’s GDP is less than half of South Korea’s US$832.5 billion, Turkey’s $617.1 billion and Mexico’s $874.9 billion, and is two-thirds of Indonesia’s $540.3 billion.

Many analysts, therefore, claim that geo-politics drove Beijing’s decision to invite Pretoria to the Club. South Africa’s part in African post-conflict reconstruction and leading influence in the African continent is evidently important. But is it really only about South Africa’s political leverage?

Other analysts (including this author) are inclined to believe that China’s BRIC-membership invitation to South Africa was nothing short of a strategically-timed, diplomatic master stroke. As a permanent five member, China, eager to show global leadership, played its trump card by being the country that supported Pretoria’s membership of BRIC. Beijing is moving expeditiously to make sure it has political capital in Africa when it comes to taking tactical decisions that affect Africa’s domestic and international affairs. One of these is the referendum in Southern Sudan as, if the situation regresses, South Africa’s spot on the UNSC could prove a very useful to Beijing’s interests.

The fact that South Africa offers a gateway into the Southern African Development Community Market and furthers Beijing’s corporate interests. The going out strategy of Chinese companies will certainly get a boost by joining South Africa’s corporations in exploring and exploiting market and other opportunities in African economies.

From a South African perspective, the large business delegations that accompanied President Zuma during his BRIC visits have been invaluable. For one thing, South African corporate capital needs access to the BRIC markets as much as the BRIC countries need to enter the South African market as a gateway into Africa. By positioning themselves in BRIC, ‘SA Inc.’ is on the threshold of entering markets in BRIC member countries’ regional neighbourhoods.

The commercial learning that the South African business sector brings to the alliance in terms of technology, research and development, and innovation may also be a driving factor for admitting the country into BRIC. It is clear that the experience of SA Inc and its willingness to underwrite risk in the African markets holds South African firms in good stead for jointly exploiting economic opportunities not only in African markets but also in regional economic environments which can be seen as equally difficult to penetrate. Could this be the beginning of a new BRICS transnational corporate alliance that will wield strategic economic power?

Still, there are certain caveats.

South Africa’s ability to represent the African voice in multilateral forums, and be a gateway for BRIC countries into Africa, is questionable, and it is not clear whether the African bloc actually sees South Africa in this way. The attempt to identify Pretoria as a leader of the African agenda could in reality create a backlash due to post-apartheid South Africa’s own prejudices and xenophobia against African migrants, or be interpreted as, what Patrick Bond calls, a sub-imperial agenda across Africa.

As South Africa contemplates its role and duties, it will be critical to evaluate how it intersects with its interests in the India-Brazil-SA (IBSA) forum and the G20. Becoming a member of BRIC brings overlapping and potentially contradictory responsibilities. How will Pretoria decide which club takes precedence and manage conflicting interests?

Whatever way South Africa’s position within BRIC is interpreted, one thing is certain: Pretoria must start punching above its weight. Not only does it need to demonstrate to its BRIC partners the confidence they have shown in its membership, it must also illustrate to the South African people the efficacy of being part of BRIC. Alliance politics cannot only be about multilateralism and a kind of musketeer ideology. Also needed are direct links to overcoming domestic challenges and aspirations — like unemployment, a viable industrial policy and social development.

The greatest challenge for South Africa is to start making BRIC work for it while at the same time reconciling the expectations its BRIC partners may have, including the promises and trade-offs President Zuma may have made to his new BRIC allies.

Sanusha Naidu is Senior Analyst, Africa and the Global South based in the Democracy Governance and Service Delivery at the Human Sciences Research Council in Cape Town, South Africa.