BRICS and IBSA: Friend and Foe Alike

By Saliem Fakir · 3 Jul 2012

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Picture credit: Roberto Stuckert Filho/Wikimedia Commons
Picture credit: Roberto Stuckert Filho/Wikimedia Commons

The recent spat between South Africa and Brazil over poultry raises the spectre of how self-interest can bedevil unity in newly formed geo-political forums, such as BRICS (Brazil, Russia, India, China and South Africa) and IBSA (India, Brazil and South Africa).

South Africa accused Brazil of dumping chickens onto our market and thus causing harm to our poultry industry. Brazil initiated a World Trade Organization action after South Africa imposed import tariffs on Brazilian chicken.

Brazil contends that South Africa’s actions are costing its economy $70 million a year. The chickens may well come home to roost when national trade protection takes precedence over internationalism. For the moment though, it is more likely that the dispute will, in the end, ruffle feathers but not change the direction that BRICS and IBSA are following for now.

Evidently these new geo-political formations to leverage power within the existing world order do not exclude rivalry amongst cohorts.

In reality, the establishment of BRICS and IBSA is to define a collective new role for themselves within the existing world order rather than to create a new order on the basis of an alliance that is not yet mature, nor one that has a clear political doctrine for its existence. Everything is in discovery mode for now.  Everything is cordial and cautious. The bigger powers within the groupings are not yet ready to give up anything for the pretence of unity.

So, what holds these groups together?

This was the subject of a Germany, India, Brazil and South Africa meeting, a so-called GIBSA meeting on security that took place in Rio de Janeiro from 27-28 June 2012, which I had the good fortunate to participate in. The meeting was hosted by Brazil’s Centre for International Relations (CEBRI) and involved participants from policy think tanks in the aforementioned countries.

What binds the BRICS and IBSA countries is that they have common development challenges and find themselves in a world where conventional North-Atlantic power is under strain, if not waning. They also want to industrialize and develop their individual economies on the back of each other’s markets and capabilities.

South Africa, for instance, wants to reduce its dependence on European markets and is keen for economic trade, at least with China and India, to slowly displace Europe’s capture of trade relations within Southern Africa.

More importantly, members of both groupings are also active in Africa’s economy, seen largely as the preserve of former colonial powers and recently, also the march of South African multinational corporations into the continent.

The behaviour of the rest of the BRICS countries, including their political and economic role, has significant implications for South Africa’s position in the region and our economic development with that of the region. It’s one of the reasons South Africa can’t avoid being part of these groupings.

There is a sense that playing the international geo-political game is a mix of serious engagement on crucial global issues, but it is also a beauty contest of sorts, as BRICS leaders seek to punch above their weight while things at home don’t always look good.

China may be in a better position, but its own domestic policies and human rights culture (or lack thereof) doesn’t always win applause.

The difference between BRICS and IBSA is that IBSA is largely a forum for those with strong democracies or governments that have been elected by popular vote. Russia and China stand out as odd ones, as they have non-popular political systems. However, in the realm of international politics, they can’t be ignored because of who they are and have been historically.

Both forums started off as talk-shops aimed at fostering better relations between mutually aspiring global players. However, this will now become more material with the creation of a permanent secretariat and plans to go ahead with the establishment of a BRICS bank, given the impetus for a less dollarized world economy. China is already experimenting with the Renminbi becoming an international trading currency.

BRICS countries will certainly play a bigger global role as their share of GDP and income is increasingly growing. Together they constitute 40% of the world’s population and have 18% of global GDP share -- predicted to grow to 40% by 2030.

South Africa, though, is losing ground: In 2011, South Africa’s total exports to Africa’s largest economies lagged that of China significantly. Of South Africa’s total exports to Africa, 0.5% was to Egypt and 4% to Nigeria compared to China’s 13% and 16% respectively for the two countries. While South Africa’s trade into Africa has increased, it is not deep and fast enough.

There is also some debate about whether goods exported from South Africa are actually manufactured in our country. South Africa’s good infrastructure and banking system is increasingly becoming an ideal re-exports logistics hub where goods do not come from South Africa, but are destined for other parts of Africa via re-routing.

Nevertheless, while each member of BRICS and IBSA has asserted its leadership in the region and in the world, the acceptance of their leadership by neighbouring or regional states, is not undisputed. Regional member states have an uneasiness and restlessness with BRICS members’ self-appointed regional leadership role.

Brazil, for example, struggles with neighbours who view it with suspicion. While South Africa’s economic and political dominance in Africa has received mixed reactions.

This can be seen in the inconclusive fight to have South Africa’s Nkosana Dlamini Zuma elected as African Union (AU) President.

However, assertion, strategic, economic and political location within each other’s relations explains why there is a BRICS and an IBSA, while countries such as Turkey, Mexico, Indonesia and others transitioning to middle-income status are excluded.

But these countries look certain to assert a sense of stature in their own backyards. Mexico is starting to challenge Brazil as a manufacturing and industrial base in Central America, piggybacking on the North-Atlantic Free Trade Agreement.

The transition to middle-income status does not suggest that the BRICS countries have settled their own internal tensions and dilemmas. Each country’s populace would prefer a focus on domestic challenges rather than this international hobnobbing amongst each other and in the G20.

South Africa sits at a precipice - our buckling economy and regressing human development index compared to other BRICS countries will increasingly make our claim as the regional power player sound like the growl of a paper tiger.

While it is seen as bold and vigorous outside, South Africa suffers a growing hollowness from within. If our economy doesn’t grow, it will be challenged by other rivals in the region who may be doing better on development indicators.

Moreover, our political leaders will be hard-pressed to explain why the rest of BRICS is advancing while South Africa is making slow progress. In the long-term, economic sustainability and growth in South Africa - shared with the region - and fixing problems in Africa, will be mutually beneficial.

If it fails to grow the economic cake, South Africa’s assertion of leadership on the global stage will be done with great constraint and continued reluctant acceptance from neighbours and the African region as a whole.

It will have little to offer other than posturing.

Assertions of leadership without the weight of financial capacity and economic muscle will also make South Africa vulnerable to counter-strategies from other African rivals and the very members of BRICS who will mouth rhetoric, but do something else in practice.

Fakir is an independent writer based in Cape Town.

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