African business, politics and lifestyle
Should South Africa be a BRIC?
The ‘s’ in BRICs is lower case, pluralising the grouping of the world’s large and dynamic emerging economies. But South Africa’s aspirations to make it BRICS with a capital ‘S’ became clearer when Russia revealed Pretoria had “applied” to join.
Just what an application to join the BRICs means is still a bit unclear. Although Brazil, Russia, India and China have met for two summits and are due to hold a third in China next year to discuss common interests, the acronym was coined in 2001 by Jim O’Neill, now chairman of Goldman Sachs Asset management and at the time the bank’s chief economist.
When Reuters asked O’Neill whether South Africa should be a member of the BRICs, he said “No”.
Speaking to a group of Reuters editors a few months ago, O’Neill outlined why South Africa was not only not among the BRICs, but not even among Goldman Sachs’ “N-11” – the next 11 emerging economies – a list which includes both Nigeria and Egypt.
“The country in Africa that has the real potential is Nigeria,” he said. “South Africa doesn’t have enough people in its working population. It’s a chronic problem.”
While Africa as a whole might be doing rather well, South Africa is a relative laggard. The IMF’s growth estimate of just under 3 percent for this year ranks it 36th out of 44 countries in sub-Saharan Africa. Forecasts for next year put South Africa well behind the BRICs.
Given that South Africa is the continent’s biggest economy and that it is already part of the G-20, it may be able to argue that it could represent Africa’s interests. President Jacob Zuma has been making a diplomatic push with BRIC countries and Chinese Vice President Xi Jinping, tipped as China’s next president, is in South Africa this week.
South Africa can also argue that it is a gateway to the continent for business in a way that it simply wasn’t a decade or so ago. And hosting a successful World Cup showed what a positive image of Africa it could portray.
But the growth figures show up the stark difference between a country slowly recovering from recession – struggling to increase productivity and burdened by high unemployment and social costs - and some of the world’s most vibrant economies.
Does South Africa deserve a place with the BRICs? Would there be a better way for Africa to be represented among the fast growing regions of the world?