Cementing our place in Brics
In what is surely SA’s most important diplomatic engagement of recent times, President Cyril Ramaphosa on Monday welcomed Chinese President Xi Jinping to the country at a ceremony at the Union Buildings.
Xi was accorded a 21-gun salute and the full Cabinet was lined up to shake his hand after he inspected the presidential guard. As pomp and ceremony goes, it was about as fulsome a show as this country can fit into the sandstone amphitheatre. Ramaphosa even picked out a red tie for the occasion.
The visit, ahead of the Brics summit in Johannesburg, where Xi will be joined by Prime Minister Narendra Modi of India, Russia’s President Vladimir Putin, Brazil’s President Michel Temer and other national leaders, comes as the old world order is breaking apart.
In Europe, Britain is headed for an economically disruptive departure from the EU. Across the Atlantic, US President Donald Trump has started an escalating trade war with Europe, China and several other countries. These are, to repeat the old understatement, uncertain times. The outline of an answer to exactly how SA should position itself in this disintegrating world is beginning to emerge. The first priority must be to cement its place in Brics, a bloc of countries that is arguably more relevant than the Group of Seven (G-7) that excludes China, India and Russia.
Jim O’Neill, the former Goldman Sachs executive who coined the Brics anagram to describe growing co-operation between Brazil, Russia, India and China (SA was added later) has said as much. In a blog post in June, O’Neill wrote: “The G-7 is an artifact of a bygone era. In the 1970s, when the G-5 was expanded to include Canada and Italy, the new grouping really did dominate the world economy.
“This year, China is projected to overtake the entire eurozone. And at its current rate of growth, it will effectively create a new economy the size of Italy in less than two years. Moreover, India’s GDP is already larger than Italy’s, and crisis-ridden Brazil is not far behind.”
Last week, Ramaphosa introduced former US president Barack Obama, who delivered the Nelson Mandela lecture at Wanderers Stadium. Obama’s warning against the rise of “strongman politics” promoted a vision of a world in which democratic values ruled.
He criticised China, “bristling against criticism of its human rights record”.
There would appear to be a binary choice between a world in which strongmen are subordinated to open, transparent democracies and one in which Xi and Putin rule for life with little concern for the niceties of accountability.
In reality, however, there is a third choice — pragmatism. Fortunately for SA, Ramaphosa is nothing if not a post-ideological pragmatist. He is perfectly suited to the task of seeing through smoke and mirrors and focusing on the only prize that matters — foreign investment.
He knows that SA’s economic position in the post-Zuma era is dire and that it no longer chooses its friends with its nose in the air. The reality has dawned that the country will fail without a massive injection of foreign capital.
Ramaphosa has acknowledged this by setting a target of raising $100bn in new investment.
He has already secured a promise of $20bn from Saudi Arabia and the United Arab Emirates, as well as new money from the UK and Mercedes-Benz.
On Tuesday, China promised $14.7bn in new investment. Ramaphosa’s investment team will no doubt be working hard to secure more investment dollars from the other Brics countries during this summit.
SA might be a junior partner in Brics, but it has given us access to — and, perhaps, a little influence with — China, India and Brazil that other countries of our size can only envy.
FORTUNATELY FOR SA, RAMAPHOSA IS NOTHING IF NOT A POST-IDEOLOGICAL PRAGMATIST