We’re still waiting to seize the day

2012-03-24 11:10

When President Jacob Zuma announced early last year he had secured South Africa an entry ticket into the Brazil-Russia-India-China (Bric) alliance, we were made to feel as if our ship had finally
come in.

We were told we would now reap the reward of government’s insistence that the Dalai Lama could not come to say happy birthday to his friend, the Arch.

Now we would get something back for all those Chinese products, especially textiles, that flooded the South African market, and eroded local economic activity and jobs.

It was also payback for looking the other way when questions were asked about China’s human rights record, while we prided ourselves on ours.

It is one year later. Bric has now turned into Brics, following the addition of South Africa, and the second summit with South Africa in the line-up will take place on Wednesday and Thursday in New Delhi, India.
 
Have we cashed in on the deal as much as we hoped? Has our Brics membership given us refuge from the storm that was the global financial crisis?

As is often the case in international diplomacy, the glass can be half-full or half-empty. It is half-full when you look at the increase in trade between Africa and fellow Brics nations.

Department of Trade and Industry (DTI) statistics show that trade between Africa and countries of the global South and China has increased to the extent that half of everything we trade comes from, or goes to, another country in the South.

Trade between African and Brics countries is expected to rise to R530 billion by 2015, which will be an increase of 250% since 2010, according to official statistics.

But it is the trade balance that counts. No matter how big the cake is, the important factor is the size of your slice.

And here the glass starts to leak. DTI says South Africa has a trade deficit of 26% with its Brics buddies, which means they make money from us, not the other way round.

South Africa mainly exports minerals to other Brics countries, but the rest of Africa does the same, putting us in a position where we are competing with our continental neighbours.

South Africa is Brics’ gateway to Africa, but diplomats from Brics countries complain it is too difficult to do business in South Africa. Even more worrying is that this figure has remained the same since 2009.

And when you turn to the political side of the house that Brics built, it looks worse. The sudden resignation of International Monetary Fund (IMF) chief Dominique Strauss-Kahn gave rise to the possibility that the developing world could put up a candidate.

But there was no time, said Anil Sookal, deputy director-general in the department of international relations, to get everyone together for a caucus.

To make up for the missed opportunity, South Africa now wants to lobby Brics to support Nigerian Finance Minister Ngozi Okonjo-Iweala for the World Bank top job.

Meanwhile, President Barack Obama yesterday nominated Dartmouth College president Jim Yong Kim to head the World Bank, the first Asian-American nominated to head the lender. Kim (52) is a Seoul-born doctor and a US citizen.

The summit in India will focus on the establishment of the Brics bank. At least 70% of the world’s foreign currency lies in the global South and China, and with the World Bank and IMF running out of money to lend, Sookal asks why Brics doesn’t become a lender too and show its economic muscle.

It is not that easy.

India is insisting that one of their officials must head the bank because the idea of a bank was suggested by India at last year’s summit.

The Chinese are resisting this, saying they will be giving the most money to the bank and therefore they should be in charge.

South Africa will contribute to the bank through the Development Bank of Southern Africa. But South Africa will have to stand on the sidelines while the big boys fight it out – we have neither the capacity nor the money to insist on playing a hand in this round.

The politics of Brics has not turned out as some hoped and others feared. At the UN Security Council, Brics was often divided and rarely voted as a bloc.

But there is always next year, when the summit comes to South Africa. This is our moment of truth and if we don’t succeed then, Brics will be simply an example of South Africa watching from the sidelines while the big boys play.

» Rossouw is the international correspondent for Media24

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