BRICS, Latin America and South Africa

2014-07-15 06:34

Following the 5th BRICS Summit's outreach to African countries focused on industrialization and infrastructure development, the 6th Summit in Brazil this week has a programme where BRICS leaders will discuss matters of common interest with leaders of Latin American states. Given the fact that South Africa has warm relations with all Latin American countries, but these are due for deepening in order to produce stronger economic outcomes, the BRICS engagement offers an opportunity to firm up its understanding of and diplomacy on the whole of the region, while mindful of the idiosyncrasies of each country. South Africa can leverage its particular interests in increasing trade and incoming investment and its broader interests in transforming the South Atlantic into a zone of south agency and economic cooperation. 

The Regionalization of BRICS Agenda: The BRIC that was anticipated and explained by the Goldman Sachs and later understood to have manifested when the BRIC platform took shape in 2009 is not quite what has become of the BRICS today. First, on the basis of statistics about GDPs it was just the BRIC that was expected, but geopolitical considerations produced BRICS with the membership of South Africa in 2011. This was not just an expansion of Goldman Sach's BRIC, but the BRIC of 2009 was much more than an economic bloc, it was also about global reform. So, shared interest in the reform of the world economy and politics from one dominated by the west to a pluryilateral one is one of the glues that bind the body.

Secondly, the BRIC that emerged in 2009 on the basis of macro-economic consideration was not a random selection of countries geopolitically as assumed. It initially seemed that countries represented their individual strengths and interests until they decided to admit South Africa whose hard power currency was so much lower than the rest that it led to a discussion about regional representation as an important consideration in making BRICS a legitimate voice for developing countries broadly and emerging powers specifically. The absence of an African state in the platform weakened its legitimacy in world affairs where African countries are a suzeable number. On this basis, BRICS came to symbolise the resurgence of Africa, Asia and Latin America as regions of the south and EuroAsia as Europe's periphery. 

Thirdly, Goldman Sachs' BRIC was going to bring together four economies to enhance individual trade and investment advantages by relating better with each other while contributing to their growing stature in world affairs. It was a BRIC within a western-dominated power system. What emerged in 2009 and 2011  is a bloc that was a lot more concerned about the reform of the global economy, restructuring of global relations and fashioning a new regime for international economic cooperation. With two summits concluded, intra-BRIC economic relations by boosting trade and investment was an important focus, but it was not the overriding concern of the BRICs.

When BRIC became BRICS in 2011, it had become also conscious of its transcontinental character and the dynamics that this brings to their mandate. It started to recognise the special significance of this in enabling it push for changes in world affairs. In 2012, its Summit declared this as follows: "Coming, as we do, from Asia, Africa, Europe and Latin America, the transcontinental dimension of our interaction adds to its value and significance." (FOURTH BRICS SUMMIT – DELHI DECLARATION, 29 March 2012). 

South Africa and BRICS Outreach. 

It is no wonder that South Africa's membership would coincide with the BRICs recognising regional dynamics that they needed to take care of. The first signs of South African influence in the BRICS appeared at its very first Summit in Sanya, China, in April 2011 where the BRICS countries resolved as follows: "We support infrastructure development in Africa and its industrialization within framework of the New Partnership for Africa’s Development (NEPAD)."(BRICS Sanya Declaration, 14 April 2011). 

Clearly, South Africa expected to take this move to its logical end two years later when it would be hosting the BRICS Summit. Until then, BRICS hosts chose broad and global themes for summits: global economy and development in 2009, global governance in 2010, broad vision and prosperity in 2011 and global stability, security and prosperity in 2012. When South Africa hosted, the theme was not a broad global issue, but specific  needs of a particular region. It was "BRICS and Africa: Partnership for Development, Integration and Industrialisation."  African heads of state and heads of African institutions were invited to a retreat on the sidelines for a focused discussion on BRICS cooperation with Africa. This amounted to a regionalization of the substance of the BRICS agenda.

The summit in Brazil means that this is becoming a norm in the BRICS' outreach diplomacy. 

South Africa and the Latin American Pivot: Not only does the Brazilian decision to host a Latin American Retreat suggest that the regionalization of BRICS agenda is becoming a norm, but it also positions BRICS to become a catalyst for a new phase of south-south cooperation, one in which the BRICS will become the common platform for caucusing positions on global issues. It makes possible the positioning of the BRICS as a catalyst for inter-continental interface and cooperation as a dynamic part of south-south cooperation. 

Although trade with Latin America grew after 1994 reaching a respectable value of R20 billion by the mid- 2000s, according research commissioned by the Department of Trade and Industry compared to trade with Africa and Asia it has stagnated because of constraints to SA exports. The information gathered from business involved and interested in Latin America shows that the costs of making contact with potential buyers including travel, networking in a non-English speaking country, customs and taxes, limit the SA business penetration of Latin American markets. 

South Africa also needs to spread the volume of its trade and investment wider. It is currently concentrated in Brazil, Argentina and Mexico (an OECD country). The BRICS retreat enables it to reach out to governments of Chile, Colombia, Panama, Peru, Venezuela and Virgin Islands to open up trade opportunities. This would work if SA also ensured its diplomatic missions on the ground begin energetically leveraging this interface by organizing trade missions and better sharing of business information about these countries. 

South Africa needs to diversify its structure of its economic relations with the region to non-resource sectors of the economy by increasing trade in agricultural products and services, technology, manufactures and machinery. Studies show that there is a potential market for these. 

In exploring these opportunities, South Africa should be mindful of the fact that its main friends in the region export to the region the same products as itself, meaning there is a competition with Brazil, Mexico and Argentina. Perhaps, this means that while diplomatically managing competition it must try and focus stronger on providing products and arrives in sectors where regional powers neglect, namely: agricultural products, textile, wood and paper products, and non- metallic materials. 

Political relations with Latin America are in need of further strengthening in order to reinforce the strategic importance of cross-ocean coordination on the high politics of global reform within the context of revitalized South Atlantic as a strategic blue zone in a changing world. This oceanic zone of interface will benefit from the strengthening of political and economic interface between South Africa and Latin America in ways that enhance the Zone of Peace and Cooperation of the South Atlantic and the Africa-South America summits initiative that are designed to foster closer economic cooperation, development partnership, political interaction governed by shared values of democracy and peace, and scientific and technical cooperation. 

In this regard, Brazil and South Africa still have a lot to do to mobilize support for this inter-continental interface. They have to leverage the fact that they more than any of their neighbors have extensive economic and political relations in each other's regions to help foster a new level of interface. 

To do this, South Africa will have to improve its diplomatic service and capital in the region, which includes economic diplomacy training, language training, targeted and well- thought through trade missions, and transport arrangements to ease access for SA companies including state-owned enterprises that must be encouraged to follow- up on high-level contacts at BRICS Retreat. 

The BRICS outreach to the neighborhood of host countries is perhaps the most important undertaking in the platform's effort to deepen economic cooperation on a grand scale. It also has the potential of enhancing BRICS into a catalyst of inter-continental economic integration especially between regions of the south and thus take south-south cooperation a level higher. The interface with Latin America at the 6th summit in Brazil offers huge opportunities for South Africa to diversify and deepen its economic relations with Latin America. This is provided it approaches this opportunity holistically. 

So, South Africa needs to draw up a multi-dimensional strategy on how to follow up on BRICS outreach. Such a strategy must focus on ways of diversifying economic relations. 

It must focus on enhancing political relations on the basis of a shared interest in a reinvigorated South Atlantic region as a crucial zone for south-south cooperation, especially South agency on global reform.

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