World Imperialist Crisis drives new alignments: BRIC invites South Africa as African gateway

BRICS countries: Brazil, Russia, India, China, South Africa

[A former Indian diplomat discusses the new international alignments and their political meaning. While his analysis needs to be assessed critically, the information he includes in this article is of value to all concerned with the political impacts of the world imperialist crisis.–Frontlines ed.]

China BRICS up Africa
By M K Bhadrakumar, Jan 4, 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:
China, Russia and Brazil assumed an important role when the
international community sought to resolve the Iran nuclear issue and
tensions in the Middle East and on the Korean Peninsula. Their greater
say in international affairs and inevitable assumption of more
responsibilities are a significant contribution to multilateralism and
have lifted the status of the developing world as a whole in the
international arena.
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.

http://www.atimes.com/atimes/China/MA04Ad02.html

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