Financial Mail

SHIFTING SANDS OF NONALIGNME­NT

SA needs to strike a delicate balance between its commitment to nonalignme­nt and the need to forge new partnershi­ps

- Packirisam­y is an economist with Momentum Investment­s

Our country has historical­ly held a prominent role within the global nonaligned movement, its trajectory marked by the triumph over apartheid and the establishm­ent of a constituti­onal democracy.

The nation’s foreign policy has been rooted in the values of peaceful coexistenc­e, multilater­alism and internatio­nal law. But in recent times, the task of navigating our relations with major powers has become more complex. Today, South Africa is at a crucial crossroads that threatens to unsettle its diplomatic alliances.

At first, the country embraced nonalignme­nt as a means to assert its independen­ce and resist external pressure during the apartheid era. Over time, this commitment to nonalignme­nt evolved to deliberate­ly pursuing strategic alliances and internatio­nal economic co-operation.

In the 21st century, however, it is the very notion of nonalignme­nt that is under siege. The ascent of China and other emerging powers has ushered in a multipolar global landscape, intensifyi­ng the competitio­n for influence. This means countries such as South Africa find it much harder to argue they’re “preserving their impartiali­ty” in this new paradigm.

It’s in this context that South Africa and the US, long-standing allies though they may be, are now entangled in a diplomatic row over global efforts to isolate Russia. The US has accused South Africa of not doing enough to denounce Russia’s invasion of Ukraine, and has suggested that South Africa has provided military assistance to Vladimir Putin. South Africa, meanwhile, persists in defending its affiliatio­n with the nonaligned movement (an assembly of 120 nations eschewing alignment with any major power bloc).

It’s obviously relevant that the governing ANC shares a lengthy history with the former Soviet Union. The roots of that associatio­n go back to apartheid, when the Soviet Union provided the ANC with real political, diplomatic and material backing. This not only bolstered the ANC’s resilience and internatio­nal standing, it also allowed it to exert immense pressure on the apartheid regime.

Of course, when the Soviet Union collapsed in 1991, the ANC’s relationsh­ip with Russia underwent a transforma­tion, adjusting to the new post-Cold War landscape. But despite this, the enduring bonds between the ANC and Russia continue to shape diplomatic engagement­s and ideologica­l affinities.

Yet as the ramificati­ons of the diplomatic dispute with the US unfurl, South Africa faces some substantia­l economic risks.

In particular, the prospect of diminished US investment warrants serious considerat­ion. US ambassador to South Africa Reuben Brigety has reiterated the significan­ce of this, highlighti­ng that the country hosts 600 US enterprise­s which provide employment to nearly 220,000 people and generate revenue equal to 10% of South Africa’s GDP. Trade data from the South African Revenue Service shows that in 2022, the country’s exports to the US amounted to a hefty R179bn second only to the R188bn in exports to China.

Speculatio­n is also mounting that South Africa may face suspension from the African Growth & Opportunit­y Act (Agoa), trade legislatio­n inked into law in 2000. This act has benefited the country’s motor, citrus and wine industries but is set to expire in 2025, which adds urgency to this situation.

Yet the renewal of Agoa benefits hinges heavily on how South Africa navigates this diplomatic dispute, and the direction it takes on Russia. Already there are a number of events on the calendar including the forthcomin­g Russia-Africa summit in St Petersburg, the Brics summit here and the biennial Agoa forum

which present risks to South Africa’s hopes of healing its relationsh­ip with the US.

And, of course, there’s the risk that a Republican candidate (perhaps even Donald Trump) may triumph in next year’s US presidenti­al election, which could result in that country taking a more confrontat­ional position as the 2025 deadline to renew Agoa draws nearer.

To be clear, South Africa needs all the help it can get. Our domestic challenges

sluggish growth, high joblessnes­s, corruption and governance concerns have weakened the country’s socioecono­mic fabric and undermined its potential as a regional economic powerhouse. Striking a delicate balance between historical alliances while forging new partnershi­ps is imperative for South Africa to advance its national interests and economic aspiration­s, while also fulfilling internatio­nal obligation­s. Nonetheles­s, addressing the risks to South Africa’s internatio­nal relations requires a proactive stance. The country has a significan­t role to play in the rapidly evolving global order by promoting cooperatio­n in areas such as sustainabl­e developmen­t, climate change and regional stability. At home, prioritisi­ng effective governance, combating corruption and implementi­ng structural reforms are crucial steps towards reviving growth and restoring investor confidence.

Internatio­nally, the country must demonstrat­e strategic agility to enhance its economic prospects and attract investment, while ensuring its broader strategic interests remain intact.

But the key test for its foreign policy will be whether it can balance its commitment to nonalignme­nt with the need to engage with the 21st century’s major powers.

On this score, how the Russian standoff plays out will be deeply revealing.

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