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WHAT are the pros and cons of South Africa's acceptance into the Brics - Brazil, Russia, India, China and South Africa - fold?
In his eBook South Africa in BRICS: Salvation or ruination? eminent political commentator William Gumede presents a thoughtful analysis on the topic. Here is an excerpt:Some commentators such as Jim O’Neill, the now retired Goldman Sachs executive who first coined the term BRICS to refer to the fast-growing emerging markets, question whether South Africa should be a member of BRICS.
The question is misplaced. The argument that the small size of South Africa’s economy, its sluggish growth and its smaller population compared to the other BRICS countries disqualify it from being a BRICS is also wrong.
The BRICS alliance is not simply a geopolitical, trade or economic one; it is a strategic and tactical alliance based on each country focusing on securing common interests as well as those of their individual countries.
Since the end of apartheid, a core strategy of South Africa’s foreign policy has been to position itself not only as a voice for less influential African and developing countries, but also to take a leading role in mobilising these countries to forge strategic alliances that will advance their common interests in global forums and negotiations.
That alone, from a strategic point of view, will make it difficult for any global developing country alliance to exclude South Africa.
South Africa was an architect of the creation of IBSA (India, Brazil, South Africa) which preceded BRICS. The results of IBSA were mixed. For example, its effort to create the developing world’s largest free trade area through linking the fifteen-country Southern African Development Community (SADC), the Latin American Mercusor (Mercado Común del Sur, or Common Market of the South) and India faced obstacles. Nevertheless, the partnership itself was an important geopolitical statement.
Those who argue that South Africa’s economy is too small to compete with its BRICS peers are also wrong. Of course, they are right if they argue narrowly in terms of the size of the South African economy. Clearly, compared to China’s US$3.2 trillion foreign exchange reserves, South Africa is a minnow.
This was illustrated in 2011 when BRICS considered Brazil’s proposal for members to increase their holdings of euro-dominated bonds to help ease Europe’s debt crisis. Under this proposal, BRICS countries would make billions of dollars in new funds available to the IMF as a way to help ease the crisis in the Eurozone.
South Africa immediately made it clear it was not in the same financial position as its partners in BRICS who can afford to use their substantial foreign exchange reserves. 'South Africa is not part of that market at the moment and it’s the big countries who have $3.2 trillion in reserves. We are Mickey Mouse compared to that and they can afford to look at some of those issues,' finance minister Pravin Gordhan said.
- Fin24
Read the rest of this Tafelberg Short book:
Leisurebooks
Amazon
Kalahari
Kobo
In his eBook South Africa in BRICS: Salvation or ruination? eminent political commentator William Gumede presents a thoughtful analysis on the topic. Here is an excerpt:Some commentators such as Jim O’Neill, the now retired Goldman Sachs executive who first coined the term BRICS to refer to the fast-growing emerging markets, question whether South Africa should be a member of BRICS.
The question is misplaced. The argument that the small size of South Africa’s economy, its sluggish growth and its smaller population compared to the other BRICS countries disqualify it from being a BRICS is also wrong.
The BRICS alliance is not simply a geopolitical, trade or economic one; it is a strategic and tactical alliance based on each country focusing on securing common interests as well as those of their individual countries.
Since the end of apartheid, a core strategy of South Africa’s foreign policy has been to position itself not only as a voice for less influential African and developing countries, but also to take a leading role in mobilising these countries to forge strategic alliances that will advance their common interests in global forums and negotiations.
That alone, from a strategic point of view, will make it difficult for any global developing country alliance to exclude South Africa.
South Africa was an architect of the creation of IBSA (India, Brazil, South Africa) which preceded BRICS. The results of IBSA were mixed. For example, its effort to create the developing world’s largest free trade area through linking the fifteen-country Southern African Development Community (SADC), the Latin American Mercusor (Mercado Común del Sur, or Common Market of the South) and India faced obstacles. Nevertheless, the partnership itself was an important geopolitical statement.
Those who argue that South Africa’s economy is too small to compete with its BRICS peers are also wrong. Of course, they are right if they argue narrowly in terms of the size of the South African economy. Clearly, compared to China’s US$3.2 trillion foreign exchange reserves, South Africa is a minnow.
This was illustrated in 2011 when BRICS considered Brazil’s proposal for members to increase their holdings of euro-dominated bonds to help ease Europe’s debt crisis. Under this proposal, BRICS countries would make billions of dollars in new funds available to the IMF as a way to help ease the crisis in the Eurozone.
South Africa immediately made it clear it was not in the same financial position as its partners in BRICS who can afford to use their substantial foreign exchange reserves. 'South Africa is not part of that market at the moment and it’s the big countries who have $3.2 trillion in reserves. We are Mickey Mouse compared to that and they can afford to look at some of those issues,' finance minister Pravin Gordhan said.
- Fin24
Read the rest of this Tafelberg Short book:
Leisurebooks
Amazon
Kalahari
Kobo
