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BRIC(S) | South-Africa as the port to the African Continent?

Saturday, January 8, 2011 · Category Economy · comments 0

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With it's lagging economy and an official unemployment rate of 24,8% (unofficial rate close to 40%) adding South-Africa to Jim O'Neill's BRIC countries, seems a little bit odd. According to South-African media it is an important milestone, signifying South Africa is becoming a major emerging economy in the world. Being invited by China, it's largest trading partner, it seems more a political move than one based on facts and figures.

Some BRIC(S) Statistics

 

Brasil

Russia

India

China

South-Africa

Surface

8.5 mln km2

17 mln km2

3.3 mln km2

9.6 mln km2

1.2 mln km2

Population

201 mln

139 mln

1.173 mln

1.330 mln

49 mln

GNP in Billion $

1.574

1.232

1.237

4.985

287

Economic growth in %

7.5%

4.0%

9.7%

10.5%

3.0%

Inflation in %

5.0%

6.6%

13.2%

3.5%

5.6%

Unemployment in %

7.2%

7.5%

10.7%

4.1%

24.8%

A clearly political move?

Geographic map of South-AfricaSouth-AfricaWhile South-Africans applaud their admission to BRIC after much lobbying and negotiations, the move has been criticised, particularly since South Africa is a far smaller economy than the other four and it may be treated as the junior partner. "It’s degrading to have to lobby for membership. It would have been different if the country had been invited in the first place. South Africa will simply be playing second fiddle to Russia, Brazil, China and India," believes Mzukisi Qobo, the Head of the Emerging Powers and Global Challenges Programme at the South African Institute of International Affairs.

Other potential BRIC members

Increasingly economically powerful Indonesia was recently touted as a more worthy candidate than South Africa - with Turkey, Mexico, South Korea and Nigeria also considered ahead of South Africa. Jim O’ Neil has been quoted as saying he was opposed to the country being included, due to its small size and struggling economic record. South-Africa counters by stating that countries like Indonesia, Mexico, South Korea and Vietnam don’t have a hinterland economy of 250 million people in Africa. This should enhance South Africa’s positioning in an increasingly globalising and competitive world.

Being a member of BRIC or focus on IBSA

Some political analysts and economists say the country would be far better placed to consolidate its position in IBSA, which is made up of India, Brazil and SA. IBSA is far more meaningful than BRIC, which is a club of diplomats and politicians. IBSA involves a range of government ministries, incorporating trade and industry, science and technology, education and transport. It also has valuable private sector, civil society and academic forums.

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The IBSA countries have shared values, they’ve articulated a very clear agenda and have worked very well together in multilateral trade negotiations. In contrast, the BRICS set-up is an uneasy fit, with tensions between BRIC countries. It could well backfire to join BRIC. SA is yearning for significance, affirmation and being part of a global hub, but it’s going about it the wrong way. So maybe the country should rather stick with the tested IBSA arrangement, focus on its bilateral relations with countries where meaningful trade opportunities are unlocked, since there is hardly any substitute for bilateral relations.

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