China Brics up Africa

3 posts

Niccolo and Donkey
China Brics up Africa

Asia Times Online

M K Bhadrakumar

January 3, 2011

There can be no two opinions that Beijing made a smart move. Its decision to anoint South Africa as a new member of BRIC (Brazil, Russia, India and China) will be projected as based on economic grounds, but there are any number of other dimensions.

The decision was hugely significant politically, and its announcement showed delightful timing - Christmas Eve. It also has vast geopolitical potential and it is undoubtedly based on strategic considerations. The choice of South Africa can even be spotted as a gutsy move to disprove a prediction from Jim O'Neill, chairman of Goldman Sachs Asset Management and guru of the BRIC concept, that Nigeria was better placed to make the grade.

The next BRIC summit - or BRICS as it will now be known - is scheduled for April in Beijing, where for the first time South Africa will participate as a member of the group.

Arguably, why South Africa? In the size of its economy, growth rate or population, South Africa lags far behind the BRIC average. Knowing that his grip on BRIC was waning, O'Neill bestirred himself from Christmas holidays to say, "It is not entirely obvious to me why the BRIC should have agreed to ask South Africa to join. How can South Africa be regarded as a big economy? And, by the way, they happen to be struggling as well." In fact, the rand touched three-year highs against the US dollar when the news broke.

The gross domestic product (GDP) of South Africa is about US$285 billion as compared to Russia or India's ($1,600 billion), Brazil's ($2,000 billion) or China's ($5,500 billion). GDP never quite tells the whole story, but even then, China has obviously made some smart calculations.

For one thing, China knew South Africa was interested to join BRIC and assessed that it pays in many ways to show Beijing is prepared to go the extra league to protect its number one African partner's interests. Beijing took a far-fetched investment decision to create political goodwill. O'Neill's laconic remark summed it up: "When I created the acronym, I had not expected that a political club of the BRIC countries would be formed as a result."

In his celebrated 2001 paper titled "The World Needs Better Economic BRICs", O'Neill used the acronym as a symbol of the shift in global economic power away from the developed Group of 7 economies toward the developing world. He argued that by 2050 the combined economies of the four BRIC countries would exceed the economies of the richest countries in 2001.

Yet, he was confident BRIC would never evolve into an economic or trading bloc - like European Union (EU) or the 10-member Association of Southeast Asian Nations (ASEAN). However, the BRIC acronym is extended with South Africa's admission, and BRICS is indeed heading to form a "political club", sidestepping the mode of the EU or ASEAN.

India faces some strategic choices if the grouping assumes a political orientation. Indeed, India wouldn't dream of opposing South Africa's admission but, strangely, to date, the Indian foreign ministry has not pronounced a word.

Both Russia and Brazil have acclaimed the Chinese decision and, interestingly, both noted the political significance of the decision. Russia's foreign ministry said South Africa is a "leading African country" whose entry into BRIC is "in line with ... the emergence of a polycentric international system". The Brazilian foreign ministry commended that South Africa will make an "important contribution" to the BRIC both on account of its economic relevance and its "constructive political action".

Brazil added, "The addition of South Africa will expand the geographic representation of the [BRIC] mechanism at a time that we are looking, on the international level, to reform the financial system and increase democratization of global governance." Part of India's nervousness probably lies in the reference by Brazil about "democratization of global governance".

India increasingly pins hopes on the US to advance its bid for UN Security Council membership and is making adjustments to its foreign policy so as to meet with Washington's approval. Its dilemma will be acute if the BRICS moves toward a common position on international issues that runs against the grain of the US' global strategies.

The official China Daily newspaper indirectly took note of Delhi's lukewarm attitude to the grouping. In a commentary titled "Building BRICS" last week, it left out India while making the following reference:

The logical thing would have been to simply merge BRIC and IBSA (India, Brazil and South Africa). But India seems to have turned down the idea. "IBSA has a personality of its own. It is three separate continents, three democracies. BRIC is a conception devised by Goldman Sachs. We are trying to put life into it", Indian Prime Minister Manmohan Singh suggestively explained a few months ago while underlining the high importance that Delhi ascribed to IBSA (which excludes China).

India sees its interests intersecting with China's in Africa. Delhi has decided that Africa will be one of its three "major foreign policy targets" in 2011. During his visit to Delhi in November, US President Barack Obama pointedly singled out Africa as a region where the two countries should closely cooperate. Indian Foreign Minister S M Krishna was explicit that India saw itself locked in a rivalry with China. "China is taking more than normal interest in the Indian Ocean and we are monitoring it carefully."

Beijing's decision to bring South Africa, which is the heavyweight in Africa, into BRIC pre-empts the proposed US-Indian collaboration. Without doubt, both Washington and Delhi would estimate to their discomfort that the grouping's anchor of economic logic has been unmoored. Neither expected Beijing to move so fast.

Beijing estimated that the time has come for expanding the geographic spread of the BRIC so that it can aspire to play a more significant role on the world stage. In 2011-2012, all the BRICS countries will serve as members of the 14-member UN Security Council. Five out of 14 makes a hefty share - almost one-third, which also is around BRIC's share of the world economy.

During the first decade of the century, BRIC contributed 27.8% of the world GDP growth in US dollar terms and made up about a quarter of the world economy in purchasing power parity (PPP). According to Goldman Sachs, BRIC is set to contribute to about 49% of the global GDP growth by 2020 and account for a third of the world economy in PPP.

Arguably, South Korea, Mexico and Turkey, popularly known as the "growth economies" (each accounting for about 1% of global GDP) have a better claim than South Africa to join BRIC. The South African economy of $285 billion compares poorly with South Korea's ($830 billion), Turkey's ($615 billion) and Mexico's ($875 billion). But South Africa has one distinctive asset: it is the "gateway" to an entire continent for trade and investment - and for making geopolitical forays.

To quote the People's Daily, "The role of South Africa's traditional trading partners - Western countries - has been lessened significantly ... China is South Africa's largest trading partner, and South Africa is the largest destination in Africa for China's direct investment ... By joining the BRIC countries, South Africa also hopes to become the gateway for the BRIC countries' entry into Africa ... South Africa has the ability to promote agendas related to Africa on the international arena ... This is an important factor that makes South Africa valuable as a BRIC country."

By getting South Africa on board, China challenges the US to rework its Africa strategy. How do you patrol the "global commons" in the Indian Ocean without a grip on the Cape of Good Hope? Interestingly, the challenge is of diplomatic suppleness with no trace of hard power. Beijing closely coordinates its foreign policy moves with Moscow and the initiative to legitimize South Africa as a future global power can be seen as a joint decision to challenge the US strategies in Africa and the Indian Ocean.

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.
President Camacho
This tidbit ignores political considerations that would prevent the other three aforementioned three countries from joining BRIC.

Mexico: ..... As if the USA would allow Mexico to become aligned with the likes of China and Russia​

South Korea: Would seem to prefer being under the loose umbrella of the USA rather than China, and they understand that joining a closed political bloc with controversial and power-hungry members would only harm their export-driven economy.​

Turkey: Bidding for admission into the EU, doubtful they would align with Russia and China, which would deep-six any outside chance they have of making it in. The residual mutual hostility and history between Turkey and Russia is probably another factor.​

Once again we see the stupid reliance on GDP calculations for predicting the course of global politics. Russia, for example, still has far more political leverage than India, despite having an equal GDP and only one-tenth of the latter's population.

South Africa, on the other hand, is still reeling from Western ostracism towards the apartheid regime, even though it's been replaced. Perhaps if the ANC experiment of the last 20 years was more successful, the West would have re-accepted South Africa instead of shunning it as a delinquent test-tube bastard that's painful to look at.

Israel has been the only country to continue business as usual with the South Africans through the whole affair, and with friends like Israel..... the point is, South Africa needs new friends. They aren't going to find them in post-apocalyptic Africa, and this is the course that makes the most sense for them.

It will be interesting to see how their internal affairs develop from now on. Perhaps with a new cadre of powerful allies that value their productivity and not their idealism, the South Africans will have a free hand to take their country back.
Niccolo and Donkey
The Turkizoids are the real wild card in all of this: their aims in Europe and the Caucasus align almost perfectly with that of the USA, but diverge greatly when it comes to the ME. Their deteriorating relationship with Israel is only the most visible; their strong "no" on Iraq was what really set the ball in motion.