10 April 2011
Local and international leaders are bullish about the benefits of South Africa’s new membership of the BRICS group of prominent emerging economies, which it is set to take up at the third BRICS Leaders’ Meeting in Sanya, China on 14 April.
Membership of the group was not “Africa tokenism”, Trade and Industry Minister Rob Davies told global leaders at the Davos 2011 gathering in Switzerland in January. Rather, the country’s close connections with the continent allow it to “punch above its weight” by linking it to hundreds of millions of African consumers.
China invited South Africa to join at the end of 2010, despite the African powerhouse’s relatively small population and economy in comparison to other members, which also include emerging giants Brazil, Russia and India.
“We have just joined the BRIC, which is now the BRICS, and I think that’s an important statement in its own right,” Davies told news agency AFP. “South Africa occupies a pivotal position as an emerging market.”
BRIC was a term coined by Goldman Sachs economist Jim O’Neill in 2001 to describe the growing influence of the four largest emerging economies, which accounted for about half of global economic growth between 2000 and 2008.
Since then the group’s members have started meeting among themselves to push common economic positions in global meetings. According to the International Monetary Fund (IMF), the informal but powerful bloc will account for 61% of global growth in three years’ time.
Russia’s President Dmitry Medvedev noted the change in his opening address to Davos, welcoming South Africa to BRICS and saying the group should have greater involvement in global economic decision-making.
With a population just touching 50-million people and an economy worth US$527-billion, South Africa is dwarfed by even Brazil’s $2-trillion economy, never mind China’s, but Davies emphasised that its importance lay more in the vast African markets beyond its borders.
“The African continent is the next great economic story,” Davies said. “We are a small economy on our own, we have a population size that is very much smaller than any of the other BRIC countries. Our rates of growth are not yet at their level, but we are recovering.
“We are quite small but, when we look at the African continent as a whole, the numbers start to add up,” Davies said.
Boost for trade and investment
Meanwhile, International Marketing Council of South Africa CEO Miller Matola has said South Africa’s invitation the join BRICS will open up new trade and investment opportunities for the country.
“The fact that South Africa has the opportunity to be affiliated to this group of powerful emerging economies underlines two main points,” Matola said in January. “Firstly that the country is recognised as a developing economy of significance in its own right, but also that it is the gateway to the continent of Africa – the next growth superstar.”
Matola said South Africa’s membership of the group was a good move not only economically but also politically. A new world order was unfolding, he said, with economic and therefore political power shifting from west to east, and the BRICS countries were the visible face of this movement.
“To draw South Africa into this powerful club underlines the country’s growing international role and its future significance for those who want to make use of the expanding African opportunities.
“It is, in fact, an association that does not only benefit the group, but the emerging world as a whole and Africa in particular,” Matola said.
‘Huge new opportunities’
“Huge new opportunities will open up for South Africa on the investment and trade front,” Matola added. “Private companies may also find market access into the BRIC countries easier, and partnerships with companies from this grouping might evolve.
“This might become particularly important, as South Africa is already the biggest emerging economy investor on the continent – its companies are active in at least half of all African countries.”
South Africa should use these new opportunities to increase the country’s competitive edge, Matola said.
Although South Africa’s ranking in the World Economic Forum’s Global Competitiveness Index dropped last year, this reflected not a decline in the country’s performance but improvements by other countries.
However, once South Africa joins BRIC it will be “playing in a different league and, as such, will have to improve on its delivery and performance,” Matola said.
More trade, more jobs
South African President Jacob Zuma has echoed Matola’s statements, saying that the increased trade and investment the country will enjoy as a member of BRICS will give impetus to the government’s drive to create jobs.
“[It] will actively promote trade and investment which enhances industrialisation and promotes job creation,” Zuma said last month.
Zuma said the opportunities presented for South Africa to do business with the other BRICS members were “great”.
“We also co-operate as members in the areas of finance, agriculture, statistics, justice development, finance institutions, business development and exchange as well as academia.
“New areas of cooperation are being explored in science and technology, culture, sport, climate change and energy.”
He said the “influence” of the grouping was being felt internationally and that South Africa’s membership linked the African continent to the rest of the world.
SAinfo reporter and MediaClubSouthAfrica.com – get free high-resolution photos and professional feature articles from Brand South Africa’s media service.