Tafelberg Short: South Africa in BRICS. William Gumede

Tafelberg Short: South Africa in BRICS - William Gumede


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      South Africa in BRICS

      Salvation or ruination?

      William Gumede

      Tafelberg

      A Dramatic Shift in Global Power

      The world is undergoing structural transformations. In a way not seen in generations, these are dramatically altering global power in general, the power relations between developed and developing countries, and power relations within countries themselves. The post-Cold War consensus forged after the fall of the Berlin wall in 1989, where Western countries provided the global leadership in politics, economics, ideas and innovation, is now being eroded.

      The slowdown in the US economy and the debt crisis in Europe caused by the global financial crisis started in 2008. The simultaneous economic rise of emerging countries such as China, Brazil and India has the potential to remake the world and to refashion existing unequal global power relations between developed countries and developing countries – traditionally skewed in favour of developed countries.

      Companies from emerging market corporations are increasingly becoming key drivers of global investment flows. Of the Fortune 500 companies, 96 come from the BRICS countries (Brazil, Russia, India, China and South Africa). Companies from emerging powers now control some of the largest Western brands. The former Swedish carmaker Volvo is now owned by Chinese tycoon Li Shufu’s Zhejiang Geely Holding Group, and Indian group Tata bought Jaguar-Land Rover from Ford.

      The crisis in many leading Western powers is not confined to their economies alone; there are widespread crises of leadership and a poverty of ideas. Many of the democratic institutions are either vulnerable, under siege or losing domestic credibility. In the past these Western institutions were seen as benchmarks for developing countries to emulate.

      But global institutions of governance – such as the World Bank, International Monetary Fund (IMF), United Nations and the International Court of Justice – also face crises of credibility. These global institutions are seen as biased towards Western countries at the expense of developing countries, and their policy precepts are perceived to a large extent to have failed. The World Bank and IMF have not only failed in their interventions in developing countries, they have mostly mishandled recent global crises, including failing to resolve the global financial and Eurozone crises.

      The UN has failed in Western-led interventions in Iraq, Afghanistan and Libya, where the organisation was used by Western powers for their own self-interest. It has also failed to act to stop conflict in Syria, Somalia and Rwanda. The International Criminal Court, the world’s first permanent criminal court, has consistently been accused of prosecuting only Africans and those from developing countries while Americans, for example, are exempted from prosecution by the court.

      The global financial and Eurozone crises have also turned economic convention upside down, and the dominant Anglo-Saxon version of capitalism consensus that has held sway in the West in the post-Cold War era is now being critically examined. Western countries are bailing out commercial banks with state money, supporting strategic industries that are failing with public money, and building higher trade walls to protect their industries.

      New emerging powers are increasingly displacing former colonial powers in Africa. For example, Brazil is increasingly investing in former Lusophone colonies, displacing the former colonial power, Portugal. Angola is even investing in its former colonial power, Portugal, which is suffering from a recession – a form of reverse colonialism.

      Africa is increasingly becoming a trade battleground between industrial countries and the new emerging powers. Old industrial powers are also re-entering Africa to secure resources to reboot their own flailing economies. At the same time, new emerging powers are dramatically entering Africa, seeking its resources to keep on growing. Africa can either cleverly leverage the new interests in its resources, or it could face recolonisation if it does not secure better trade terms with these new investors.


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