BRICS summit opens

DW: Jim O'Neill, who coined the term BRIC said upon the accession of South Africa in 2011 that it "did not belong in BRICS, it is wrong and it will drag BRICS down." With hindsight do you agree with this sentiment?

Mzukisi Qobo: I do not agree with this sentiment. O'Neill was looking at the BRICS narrowly from the point of view of the BRICS index that Goldman Sachs was constructing. The motivation for the BRICS leaders who constituted this informal grouping had, however, to do with augmenting their diplomatic weight in global affairs, in particular in relation to the reform of the international finance and monetary system. They viewed their source of power not just in terms of economic aggregates, but also in terms of their participation in various multilateral forums. According to O'Neill - for the purpose of the investor-focused BRICS index - South Africa does not qualify. Yet, in terms of a 'diplomatic index.' After all South Africa is a regional power on the African continent and very active in various multilateral processes such as the WTO and the G20 - there is no doubting South Africa's belonging to the BRICS Group.

A study by the Bertelsmann foundation fresh out for the summit has found that South Africa ranks bottom of the lot in terms of education and health policy, unemployment and a huge social inequality. This despite heavy government spending - higher than most of the other BRICS members. Also in terms of GDP and population numbers South Africa pales in comparison. Will South Africa be able to hang on - and is that a wise thing to do in the first place?

By some selective measures such as the ones you highlight, South Africa is a laggard in comparison to the BRICS countries. But it could benefit from other BRICS countries through peer-learning on how best to restructure its education sector, develop human capital and produce better outcomes. It is worth pointing out, however, that in some other important measures of competitiveness South Africa is ahead of most of the BRICS countries. This includes measures such as business sophistication; the financial sector; intellectual property regime; and innovation. It is also ahead of countries such as Russia, India and Brazil in the World Bank's scores of doing business. While the size of South Africa's economy is tiny in comparison to other BRICS countries, it should be remembered that from the vantage position of BRICS leaders, this is chiefly a diplomatic club drawing on both the economic strength and perceived moral qualities of some of its members. Even on some economic criteria, South Africa would come ahead of China in measures of GDP per capita at over US$8000 compared to China's under US$6000. The capitalization and quality of South Africa's stock market is much advanced than those of the other BRICS countries.

A lack of political reform will is said to be one of the - few - unifying factors of BRICS members. The political landscape under the ANC seems to pay tribute to that notion?

It is true that under the current ANC leadership there are signs of an absence of deeper political and democratic reforms. The protection of state information bill proposed by the ANC, the castigation of the judiciary as counter-revolutionary, the bullying of independent-minded corporate executives, and threats to freedom of artistic expression are some of the examples. However, the liberal constitution in South Africa reigns supreme and would require a two-thirds parliamentary majority to change it. The judiciary has found in many instances against the executive. The constitution remains a powerful safeguard against the potential excesses of the political elite. The media in South Africa is free and critical. There is a high level of political consciousness amongst the citizens and with many voluntary organisations that are highly critical of the ruling party. In comparison with other BRICS countries, South Africa would still come out much better. The worrying development, however, is with respect to socio-economic strain, including inequalities, and the rise in corruption.

South Africa was up against Nigeria for a seat on BRICS, some saw Nigeria way ahead in terms of future economic performance. Was South Africa a reasonable choice at the time?

Yes it was. Nigeria's political system is chaotic. The country's institutions and infrastructure are nowhere near in comparison to South Africa in terms of functionality. The economy is less diversified and too dependent on natural resources. Corruption is rife and systems of economic management are extremely poor. There is no doubt that Nigeria's economy will soon overtake South Africa, but the country's stature will depend on much more, including getting its political and institutional house in order. That may take over a decade to happen. Nigeria has a long way to go before it has a stable political and economic system and project leadership in continental and global affairs. Potential does not equal reality.

Where will South Africa stand on the hot issue of Syria to be discussed at the summit? Does the NATO intervention in Libya and the ensuing BRICS protest still linger heavily enough for BRICS to oppose any European or US action on Syria?

NATO policy in Libya does weigh heavily n the calculation of South Africa about issues related to humanitarian intervention. South Africa feels strongly that the Western powers abused the international law for their narrow ends; and it also believes strongly in the exploration of peaceful means to resolving internal conflicts. South Africa is on record in condemning abuse of human rights in Syria. It will likely maintain such a position at the summit, preferring that the international community assist the people of Syria to resolve their internal problems. It is also likely to reaffirm its support for the principle of responsibility to support. South Africa has a more idealistic - and sometimes naïve - posture to international affairs.

Against this backdrop just how wise is it of South Africa to openly lobby against European and US policies alongside Russia and China - after all the former are important trading partners of South Africa.

South Africa has always wanted to pursue an independent foreign policy unfettered by the influences of Western powers in particular. It needs stating that this line is somewhat compromised given the seemingly growing Chinese influence on South Africa's foreign policy as was evident in South Africa's denial of a visa to the Dalai Lama. Nonetheless, given the perceived moral decline of the West, South Africa does not see risk in criticizing the West openly. In fact heavy trade dependence on Europe has proven risky given South Africa's exposure through trade channels to the Eurozone. There is growing rhetoric about reorienting trade and economic relations more towards Africa, Latin America and Asia. There are still huge barriers to penetrating these markets. Some of these are in the form of high tariff barriers and some in the form of non-tariff barriers. Unlike the favourable position of having a trading arrangement that is legally governed, such as the EU-South Africa Free Trade Agreement, there seems to be a great deal of reluctance to negotiate a Free Trade Agreement within BRICS. It may well be a matter of time before there is trade growth (on a diversified basis) between South Africa and other BRICS countries. Be that as it may, politically South Africa is gradually de-emphasizing relations with Western countries and gravitating more towards other emerging and developing economies.

What will South Africa, or Africa generally, take away from this first summit on its soil ? Some observers have said a planned reserves safety pool at the tune of $240 billion (187 billion euros) could benefit South Africa greatly. A BRICS-led Development Bank is also in the making we hear?

The proposed institutions and processes such as the BRICS-development bank, BRICS business council, and BRICS-Africa dialogue are steps in the right direction. These are gradual developments rather than big bang changes. I think the next phases will have to deal with more structured cooperation within the BRICS including realizing the BRICS lobbying power in the G20 and the UN; as well as institutionalization of the BRICS in the future. More specific areas of cooperation around food security and agriculture; energy security; and peer learning on economic and social development will certainly be underscored. But still these will not yield weighty outcomes beyond statements of intents and commitment to have various ministers meeting regularly to exchange ideas.

In very practical terms: Will President Zuma manage to outlobby the new Chinese leader Xi for the seat of the BRICS bank. Is Cape Town in the race against Shanghai?

I actually don't think hosting the BRICS bank is such a big deal. Any country can do it. Already South Africa hosts in Sandton the China-Africa Fund which was established with the seed funding of $5 billion (3.9 billion euros) around 2008 (and this amount has since increased). This could be the nucleus of the bank, or the African component of it, which would please South Africa. For a start, establishing the institutional sinews of the bank could take many years - three or four. The main issue is who controls the bank, the vote weighting, project finance development, and the identification and execution of projects, among others. South Africa would do well not to waste energies lobbying Xi on the bank, but on a) the increased footprint of South African exports in China; b) removal of barriers to investment in sectors that are important to South African big corporates; c) attracting Chinese investment to priority sectors in South Africa and; d) lobby Xi for a UN Security Council permanent seat for South Africa.

Dr Mzukisi Qobo is a political risk analyst and the deputy director of the Center for the Study of Governance Innovation, University of Pretoria.

Interview: Ludger Schadomsky