South Africa Officially Joins BRIC

South Africa has been recognised as a growing economy

After a year of hard work, South Africa has formally joined with the four major emerging powers that form the BRIC. South African media said it is an important milestone, signifying South Africa is becoming a major emerging economy in the world.

South Africa has been invited to become part of BRIC, a group of major emerging economies which includes Brazil, Russia, India and China.

With a $285 billion economy, a significantly smaller population, and tepid growth of around three percent, South Africa’s current circumstances are far less than its BRIC counterparts.

Although South Africa’s economy is less than a quarter of the size of Russia, the smallest in the original group, Russia’s Foreign Ministry said that their new partners were a “leading African country” and entry to BRIC was “in line with sustainable trends of global development, including the emergence of a polycentric international system.”

However, Goldman Sachs economist Jim O’Neill, who coined the term BRIC in 2001, said that he believed other countries were more deserving of entry and South Africa’s smaller size was also a limiting factor for him.

While this is clearly good news for South Africa, it is not entirely obvious to me as to why the BRIC countries should have agreed,” O’Neill said.

He also compared South Africa’s economy to that of Indonesia, Mexico, Turkey and South Korea and said that “it is tough to see how South Africa matches up to these four countries, never mind the BRIC countries”.

China has been South Africa’s largest backer for entry into BRIC with Beijing even extending an invitation for Pretoria and President Jacob Zuma to attend a summit of BRIC leaders next year.

Based only on economic factors, South Africa doesn’t have a strong case on joining the BRIC nations, but politically it makes sense to diversify the make up of the group.  The four countries are playing an increasingly important role in issues including international financial system reform, climate change and other matters related to major issues of global governance in promoting the international order to move in a more balanced direction.

This recognition should be welcome by all African nations.  This emphasizes the emergence of an AFRICAN economy into international prominence.  South African minister of International Relations and Cooperation emphasised this African inclusion with the following statement: ‘Joining the group is “the best Christmas present ever,” South Africa’s Minister of International Relations and Cooperation Maite Nkoana-Mashabane told reporters in Pretoria today. “We will be a good gateway for the BRIC countries. While we may have a small population, we don’t just speak for South Africa, we speak for Africa as a whole.”‘

The expansion of BRIC just doesn’t just reflect the changing realities of the global economic landscape, but also will further promote changes in the world order. Beginning this year, all the BRICS countries will serve as members of the U.N. Security Council, permanent or non-permanent.  This is not just an economic decision, it is also a political one lets not forget.

South Africa is the largest economy on the African continent but it is not by far the largest, so it is not like South Africa doesn’t have credible competitors on the African continent. In Africa two other economies that have expressed interest in joining the BRIC are Nigeria and Egypt. With a GDP of US$470 billion in 2009 Egypt is right on the heels of South Africa as the world’s 27th largest economy. Indeed in terms of GDP, Nigeria, with a GDP of US$350 billion in 2009 and occupying the 33rd position globally, is not far below South Africa and Egypt. Moreover, both Nigeria and Egypt with 150 and 80 million people respectively are more populous than South Africa with only 50 million people according to 2010 population estimates. So, again, why was South Africa chosen over Nigeria and Egypt? The reasons are neither purely economic nor purely geopolitical this time; we need to look at what role China is already playing in the GEEP for an answer.

This is not just an economic decision, it is also a political one lets not forget. The December 2010 admission of South Africa into the BRIC nations, shortly after President Zuma went to Beijing to campaign for the inclusion, is a clever, delict game of a balancing act played by China . The reason why goes all the way back to October 2004.  It was then that China controversially backed Nigeria in the heated race for an African country to gain a permanent seat at the UN Security Council. Currently South Africa, Nigeria, and Egypt are the declared competitors in Africa. China’s position to back Nigeria has worried South Africa, so it is not surprising that this time China has chosen to back South Africa in this other race. It thus achieves a clever balancing act of satisfying both Nigeria and South Africa.

This is only the beginning of Africa’s rise to international prominence. Despite continuing political, social, and financial instability in some African countries (and it is not uncommon to find political, social, and financial problems even in the already industrialised countries), the coming decade, will mark the rise of several major African economies as emerging economic powers in their regional blocs and, indeed, globally. Beyond South Africa, more African economies are capable and destined to improve their GDPs and per capita incomes, thus playing important roles in global economic blocs. This African renaissance will most likely begin with the prominent economies in each of Africa’s five main geopolitical blocs: South Africa in Southern Africa, Nigeria in West Africa, Egypt in North Africa, Kenya in East Africa, and the Democratic Republic of Congo (DRC) in Central Africa.  The future looks bright for Africa.

Here is previous post on South Africa becoming part of the BRIC’s.

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