SANF 11 No 04
The recent invitation to South Africa to join the BRIC group of emerging economies comprising Brazil, Russia, India and China will strengthen South Africa’s trade position in the world, and offer opportunities for Africa to strengthen ties with the group.
South Africa, which was invited to the BRIC group in December 2010 following its application in November, will be officially incorporated into BRIC at the forthcoming Heads of State Summit set for China in April.
The inclusion of South Africa – the first African country to be admitted to the group — would see the acronym changing to BRICS.
The BRICS group is regarded as the fastest emerging market in the world. Studies show that by the year 2050, the combined economies of BRICS could eclipse the combined economies of the current richest countries of the world.
The five countries, together, account for more than a quarter of the world’s land area and more than 40 percent of the world population.
South Africa’s International Relations and Cooperation Minister, Maite Nkoana-Mashabane said the country would be a good ambassador for Africa when it joins BRICS.
“We will be a good gateway for the BRICS countries. While we may have a small population, we do not just speak for South Africa, we speak for Africa as a whole,” she said.
Economic analysts concur and say South Africa has a lot to benefit from BRICS if the country represents the interests of Africa.
The chief executive officer of Frontier Advisory, Martyn Davies, said South Africa as a country is small “but if we go there as a regional market, we are much bigger.”
“For South Africa to be treated as part of BRIC is a bit complicated,” added Jim O’Neill, who coined the BRIC term in 2001. “But South Africa as a representative of the African continent is a different story.”
Nkoana-Mashabane acknowledges this and says, “We bring the most diversified and most advanced economy on the continent.”
“We may not be the same size, but we can open up opportunities for them in the region and through that, we can complete our economic integration on the continent.”
South Africa has an economy of about US$290 billion, which is less than a quarter of that of Russia, the smallest of the BRIC nations. Its population is estimated at about 49 million compared to China’s 1.3 billion, India’s 1.2 billion, Brazil’s 191 million, and Russia’s 142 million.
Regardless of the size, South Africa stands at a unique position to influence African economic growth and investment.
For example, Africa’s combined current gross domestic product is similar to that of Brazil and Russia, and slightly above that of India. BRICS would aim at exploring such markets.
South Africa would thus act as a “gateway” to southern Africa and the entire African continent.
This situation favours China and India, as China is South Africa’s largest trading partner, and India has indicated plans to increase commercial ties with Africa.
Politically, BRICS would allow emerging economies to speak with a single voice in the international arena.
The inclusion of South Africa into BRICS will result in all BRICS countries being represented on the United Nations Security Council when South Africa takes up a two-year seat on the council this year.
China and Russia are two of the five permanent members while India and Brazil are currently non-permanent members. This composition is expected to lay a strong foundation towards a review of the Security Council, which most developing countries have been calling for.
Developing countries say the council continues to live in the past and treats members differently with the most powerful nations abusing the council to “bully and threaten smaller nations.”
This situation has threatened relations between and among countries as well as regions and continents. Africa is now looking to China for partnership because its relations are based on mutual trust, respect and equality.
In response, China has increased development aid to Africa in sectors such as agriculture, manufacturing and mining with a US$10 billion loan set aside to fund development in Africa under FOCAC.
China is expanding investments into Africa at a time when other traditional sources of Foreign Direct Investment are holding back citing the impact of the global financial crisis.
Africa’s relations with other countries such as Brazil, India and Russia continue to be strengthened.
Africa and India plan to host a joint summit this year to discuss cooperation in various socio-economic sectors. The summit will be held in Africa as India hosted the last joint meeting of leaders in 2008.
