Support for Russia could backfire on SA’s economy

SA’s support for Russia risks our isolation as a global pariah, undermining investment and economic growth when the country desperately needs new resources to tackle poverty and unemployment and to stop its rapid deindustrialisation.

Western powers have rightly isolated Russia, imposed sanctions on it and impounded the assets of key Russian political leaders, oligarchs and figures associated with President Vladimir Putin.

For fear of a nuclear war, Western powers have not rushed to the military aid of Ukraine; instead they have unleashed an economic war against Russia.

French finance minister Bruno le Maire put it succinctly: “We will provoke the collapse of the Russian economy.”

The problem for SA is that it could suffer collateral damage because of our refusal to condemn the obviously wrong invasion of Ukraine.

Western countries, global investors and ordinary citizens may now see SA as aiding and abetting Russia and withdraw their investments or choose not to invest here. The frightening prospect is that SA may see capital flight if the country is isolated by Western countries because of its closeness to Russia.

SA’s trade with Russia is not worth the costs of politically siding with that country. In 2021 Russia imported products including fruit, cars, manganese ore and platinum to the value of R1.3bn from SA. At the same time Russia exported products including fertilisers, petroleum, coal briquettes and medicines valued at R458m to SA.

The sanctions are likely to collapse Russia’s finances

ANC leaders are mistaken if they believe SA can develop by relying only on Brics members and other African countries

— which will reverse any military success against Ukraine. The G7 industrialised nations have excluded major Russian banks from the SWIFT system for international transactions.

Germany has said it is ready to disrupt Russia’s giant energy industry despite possible harm to its own economy, and will stop the certification of Nord Stream 2, the 1,200km pipeline for natural gas from Russia to Germany. The pipeline, which is controlled by Russian state-owned company Gazprom, would have delivered more than 50% of Germany’s annual gas consumption.

Europe gets nearly 40% of its natural gas and 25% of its oil from Russia. Russia’s gas, oil and metals exports are one of the main sources of its political and economic power.

All these sanctions are pushing Russia towards a crisis, with many of its banks on the verge of collapse. Its currency, the rouble, has collapsed. Companies are leaving Russia or have stopped production. The country will fall into its worst recession since the collapse of the Soviet Union.

At the UN General Assembly, the ANC government was seemingly under an obligation as a member of the Brics alliance of Brazil, Russia, India, China and SA to abstain from voting on a resolution demanding an end to the Russian offensive in Ukraine.

Others support Russia for ideological reasons. The ANC supports Russia as the successor to the Soviet Union, which backed the party during the liberation struggle.

SA Communist Party leader Blade Nzimande was the first to pledge his support for Russia. The South African Democratic Teachers’ Union, the biggest public sector union and a key Cosatu affiliate, issued a statement slamming MultiChoice for removing Russian broadcaster RT from its bouquet. In reality, the company providing the satellite feed was instructed by the EU to shut it down as part of the sanctions.

Some ANC leaders have personal ties to Russia, among them Jacob Zuma, who trained in the Soviet Union. Putin was — in the 1970s — a USSR military trainer in Africa for liberation movements.

Deputy President David Mabuza has received personal assistance from Putin as he has sought medical treatment in Russia.

There’s a suspicion that some ANC leaders have had interests in Russia’s investments in SA — most publicly in the agreement signed by Zuma for nuclear power stations. If that deal had been implemented, it could have meant a cash payday for many ANC cadres.

There are ANC leaders, including Gwede Mantashe, who wrongly believe SA can develop, attract investments and industrialise by relying only on Brics members and other African countries. They are mistaken.