South Africa excluded as an emerging economic power?
By Francis Kornegay
In the wake of Russian President Dmitry Medvedev’s maiden diplomatic safari to Africa, with stops in Egypt, Nigeria, Namibia and Angola, bypassing South Africa, the begging question is why South Africa was excluded from the mid-June BRIC Summit of major emerging economic powers at Yekaterinburg in Russia?
BRIC is investment bank Goldman Sachs' acronym identifying Brazil, Russia, India and China as the key ‘movers and shakers’ among emerging powers as the developed economies of the West experience relative decline. BRIC is now more than an acronym. The four countries decided in Yekaterinburg to institutionalise BRIC through regular summits, ministerial meetings and contacts between central banks. Their primary aim is to remove the US dollar as the world’s main reserve currency following the global financial crisis and recession originating in the US.
Were South Africa a member of this group, BRIC would be ‘BRICS’ with an added 'S' as some have advocated. South Africa was not in Yekaterinburg because, as department of trade and industry director-general, Tshediso Matona said, it 'simply was not invited,' adding: 'the department of international relations and co-operation must look into this. We must be in that club. We belong there.'
But apparently, not if Moscow has anything to do with. One Russian commentator indicated that neither South Africa or Mexico, which belong to the G8 Outreach Five (with India, Brazil and China), would be asked to join BRIC though Indonesia might; Indonesia being a major importer of Russian arms. Given the high stakes involved in re-shaping the global economy for South Africa and the African continent, South Africa’s exclusion is no small matter. The Russian president’s trip could be taken as a competitive BRIC challenge to Tshwane. The four powers have major interests in accessing Africa’s resources and markets, raising issues about how South Africa and the continent are managing what amounts to a ‘new scramble’ for Africa.
South Africa’s marginalisation by BRIC means Africa’s marginalisation in the overall scheme of things having to do with the terms of South-South cooperation and the future of such initiatives along these lines as the India-Brazil-South Africa (IBSA) Trilateral Forum. Indeed, from an African perspective, South Africa’s exclusion from BRIC could complicate the nature and dynamics of the whole notion of South-South cooperation to such an extent as to conceptually call it into question as an expression of global South cohesiveness.
This is where, in fact, much of the rest of Africa that resents South Africa’s status and chafe at the notion of Tshwane ‘speaking on behalf of the continent,’ score an ‘own goal’, given the reality that without South Africa’s presence in groupings such as BRIC, there is no African ‘voice’ to represent and articulate the continent’s interests. Call this the pettiness of Africa’s colonially-entrenched fragmentation where sovereignty, in the conventional sense of the term is meaningless in the absence of its continental application. As, effectively the default leader of Africa, South Africa provides a semblance of continental sovereignty within the councils of established and emerging power. This is why South Africa’s exclusion from BRIC is no small matter.
While South Africa, as a smallish ‘middle-income’ economy, is not in the mega-state league of China and India or Russia and Brazil, it does have one of the world’s main ‘floating’ currencies at a time when alternative reserve currency strategies are a central to the Sino-Russia agenda of countering greenback hegemony.
This is apart from South Africa’s overwhelming dominance of the continent’s economy and its strategic positioning as the gateway to accessing it; the reason why Industrial and Commercial Bank of China (ICBC) has become the largest shareholder in Standard Bank which, together, have embarked on 65 joint projects throughout Africa, with more in the pipeline.
South Africa is not just China’s largest market on the continent, this hold true for India as well where Indian vehicle maker, Mahindra, is considering setting up a local assembly plant. With a manufacturing facility, Mahindra SA, which began selling vehicles in South Africa in 2004, could export to Southern African Customs Union countries Botswana, Lesotho, Namibia and Swaziland. Brazil, through its Lusophone ties to Angola and Mozambique and to smaller Portuguese-speaking states along the West African South Atlantic, equally has a major interest in expanding its reach into Africa.
Further, at the May experts pre-BRIC summit preparatory meeting, it was decided that 'it may be useful for BRIC to engage with countries like South Africa, both to enhance trade possibilities between Brazil and the other three nations (using South Africa as a transit point) but to also tap into the trade possibilities with regional trade partners of each of the BRIC countries,' including pursuing co-investing opportunities outside the BRIC ‘region’ such as in Africa.
In spite of the fact that Brazil and India are engaged with South Africa in their trilateral IBSA relationship, and the G8 Outreach Five, neither country pushed for South Africa’s inclusion in BRIC. South Africa, meanwhile, seems to have been complacent in not comprehending the BRIC momentum and its implications for its status as a leading country in the emerging market, global South geopolitical-economic sweepstakes.
Is it possible that South Africa’s exclusion from BRIC reflects how the turmoil of transition between the Thabo Mbeki and Jacob Zuma administrations exacted a heavy price on the country’s international standing where it most counts, in the emerging market-global South corridors of power and economic diplomacy? Economic diplomacy has become the central driving force in how the Zuma administration plans to go about its external relations with South-South cooperation looming ever higher on the agenda.
This was articulated recently by trade and industry minister Rob Davies. Davies plans to convene 'a South-South trade conference to begin shaping an agenda of negotiation of new agreements with the dynamic economies of the South,' where, in his estimation, 'the industrialised countries of the North are in decline and that where there is continuing growth, it is in the developing countries of the South.'
Could it be that a smooth transition between Mbeki and Zuma administrations might have made it more awkward for South Africa to be sidelined from what could have been BRICS instead of BRIC? The inter-personal diplomacy between Mbeki and his IBSA counterparts, Luiz Inacio Lula da Silva of Brazil and Manmohan Singh of India, might well have smoothed the way for Zuma into the IBSA troika.
This, in turn, could have paved the way for South Africa’s inclusion in the call that Lula made with Russian President Medvedev last November for the holding of the first BRIC summit. By then, the Mbeki presidency was history and the internal politics of the ANC was a muddle. On top of that, government seemingly lacks the strategic forward-looking contingency planning capacity to grasp what is coming down the pike in the world of global politics.
The National Security Council in the presidency seems solely preoccupied with state security as opposed to factoring in its international dimensions at the ‘big picture’ level of ‘high politics’; a level affecting the country’s international and economic security interests such as Brazil and India leaving South Africa in the IBSA lurch while joining forces with China and Russia in BRIC.
Russia appears to be the main culprit in this plot though South Africa’s bilateral relations with India may not be as healthy as they could be given New Delhi’s reported ‘blacklisting’ of Denel from selling arms to India, with all this implies as a lost opportunity at building South-South defence industrial cooperation between Brazil, India and South Africa.
But then this would compete with both US and Russian military-industrial commercial interests though South Africa, not India, appears to be at fault in this regard. But it was resource diplomacy that motivated Medvedev’s stops in Angola and Nigeria. Angola is the chair of OPEC. Nigeria is a member of Russia’s Gas Exporting Countries Forum whereas Moscow has been negotiating a raft of deals concerning Nigeria’s liquefied natural gas. These were signed off on during Medvedev’s Abuja visit.
Thus, does Tshwane have its economic diplomacy cut out for it. The stakes are high not just for South Africa but for Africa’s cohesion against being ‘picked off’ in a scramble for its resources while it remains the world’s marginalised backwater. For Tshwane, South Africa’s exclusion from BRIC means President Zuma and his team will have to readjust their foreign policy and economic diplomacy calculus to focus as much attention on North-South bridging as well as focusing on the global South.
Indeed, with news that US President Barack Obama is viewing Lula of Brazil as a potential head of the World Bank, when he concludes his term as Brazil’s president, this could signal a potential de-polarising of the North-South divide to an extent that South Africa will have to cultivate its leverage where it can find it. In that regard, one of President Obama’s priority bilaterals at the G8 summit in Italy will be with South African President Jacob Zuma.
South Africa, sidelined by the BRIC powers from their exclusive club, could be facing a fork-in-the-road in how it navigates between North and South in pursuit of what is its core agenda, the African Agenda.
Francis Kornegay is a research associate at the Institute for Global Dialogue and a political analyst with a particular focus on African and international geopolitical and foreign policy issues.
This article expands on a commentary published in the Sunday Independent on 28 June 2009.