SA gets nod for a place at top table

2010-05-29 11:14

The increasing role of

South ­Africa as an emerging market was enhanced when Brazil and China indicated

that they would support Pretoria’s ­elevation to the Bric (Brazil, Russia, India

and China) group of emerging economies.


The Bric countries are increasingly emerging as a strategic and

powerful ­economic bloc in global commerce ­because of their pivotal roles in

international trade affairs and trends.


For example, over the past 10 years, emerging market imports grew

17% on ­average, according to Goldman Sachs. In the Bric countries, imports grew

by a hefty 24% over the same period.


On the export side, emerging markets are becoming more prominent.

Estimates by Goldman Sachs indicate that by the end of this decade, emerging

markets are likely to become the favoured export destinations, surpassing

developed markets for the first time.


This is in line with general predictions on the increasing economic

role and ­significance of countries such as India and China over the next two to

three decades.

This has unleashed and deepened the ­diversification of global

trade relations in ways that may redefine the balance of ­power in global

economic affairs.


Many emerging markets are trading themselves out of poverty. This

is long overdue. Aid was and is never a panacea.


Now is the time for the forces of “reverse globalisation” to be

unleashed to ensure that growth and development are evenly spread across the

world. South Africa, acting in concert with the Bric nations, is well positioned

to play a key role in the process.


The level of sophistication of South ­Africa’s economy –

underpinned by our ­impeccable ability to play an active role in global affairs

either through our membership of the G20, the UN Security Council and the India,

Brazil and South Africa ­forum – positions this country well to be part of the

Bric nations.

South Africa is ­also a frontrunner to become a permanent member

of the UN with veto power in ­a restructured and democratised UN ­structure.

Other frontrunners are Japan, Germany, India and Brazil.


The strategic role played by President Jacob Zuma in brokering the

Copenhagen climate deal in conjunction with President Barack Obama is indicative

of the nation’s eminent role in global diplomatic affairs.


So why was South Africa excluded from the Bric grouping when it was

established?


When Goldman Sachs did the study that laid the basis for the Bric

grouping, the main criterion that was used was population size (which South

Africa doesn’t have, unless we incentivise people to have more children, as

other countries do).


The other criterion was high economic growth bordering on double

digits (again which South Africa doesn’t have, but can attain through the

appropriate ­combination of economic policies and growth enablers).

I believe

that these ­factors are too limited a basis to determine membership of this

increasingly strategic economic coalition.


South Africa’s role in global and regional peace-building efforts

is of major importance to Bric and emerging economies.


In addition, a recent report by Citigroup indicates that South

Africa has the largest quantity of mineral resources in the world – worth

$2.5trillion – giving it geoeconomic and strategic significance in

international economic affairs.


These are some of the factors that have probably convinced Brazil

and China to support this country’s bid to be at the top table in the emerging

economies space.


» Dlamini is chief executive of Old Mutual SA and Emerging Markets 

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