Bricsbat: US president-elect Donald Trump has warned that he would impose heavy tariffs on Brics nations if they created a currency to counter the dollar. Photo: Allison Robbert-Pool/Getty Images
President Cyril Ramaphosa this week responded to the turbulence foretold of a Trump presidency by suggesting he and his future counterpart could find each other on the golf course.
The reality of working with the most powerful member of the G20 might be a different ball game, though Ramaphosa was simply saying he would strive to preserve strong ties with the US regardless of who occupied the White House.
South Africa assumed the presidency of the world’s premium forum for economic development on Sunday. It took over from Brazil and will in turn hand the baton to the US next December.
At the G20 summit in Rio de Janeiro last month, US President Joe Biden told the assembled presidents and prime ministers: “We’ve made progress together, but I urge you to keep going — and I’m sure you will, regardless of my urging or not.”
Biden repeated that call in the specific context of climate change, telling fellow leaders to “keep the faith” because their actions on this front would shape history, before referring to the risk of the future Republican administration backtracking on emissions-reduction targets.
“It’s true that some may seek to deny or delay the clean energy revolution that’s under way in America. But nobody — nobody — can reverse. Nobody,” he said.
South Africa holds high political ambitions for its yearlong presidency — the first time the task has fallen to an African state — of what began in 1999, in the wake of the Asian financial crisis, as a meeting ground for the finance ministers and central bank governors of the world’s biggest economies. Its priorities include lobbying for the reform of the global financial architecture and more funding — and grace — for developing nations in the energy transition.
The G20 club is responsible for more than three-quarters of global greenhouse emissions.
South Africa will argue for recognition of the fact that Africa accounts for just under 4% and is carrying an inequitable burden on climate change, the international relations minister Ronald Lamola told the Mail & Guardian recently.
The G20 working group on climate sustainability will be co-chaired by the US. Those who head the 22 standing working groups are able to influence the direction of the workflows.
A close G20 observer said it would be interesting to see whether the incoming US government replaces officials assigned to the forum and in doing so frustrate an agenda that is all the more important after the disappointment that was COP29.
South Africa will probably have a window of a few months to lay the groundwork in critical areas before the Trump administration settles in.
But the capacity of the US for disruption was plain this week when Trump threatened to impose punitive tariffs on Brics nations, should they create a common currency to counter the supremacy of the dollar.
Trump’s belligerent warning that Brics members must “go find another sucker” raised the spectre of a trade war in the G20, which brings together the G7 and the bloc’s founding nations — Russia, China, India, and South Africa — at an already fraught geopolitical juncture.
The G20 troika consists of South Africa, Brazil as the past president and the US as the next president.
One South African diplomat privately said Trump’s outburst was so shocking that he thought it was fake news until he checked Truth Social, the platform where the president-elect posted it.
Brics members have never taken firm steps towards a single currency — it remains Russian President Vladimir Putin’s idea of retaliation for Western sanctions over the war in Ukraine — but seek to trade bilaterally in their national currencies.
Lamola said South Africa did not subscribe to the notion of the bloc as a political or economic counter to the West but viewed it as a developmental platform and a source of alternative financing for its members. He recalled that the New Development Bank had given loans to troubled state-owned enterprises when traditional lenders would not.
“That is why we saw Brics as a counterbalancing measure and joined and started this measure of the bank — because it is critical for us to have alternative platforms of financing.”
This is Nigeria’s stated reason for wishing to join Brics. It also hopes to join the G20, and this week Ramaphosa agreed to back that ambition after meeting with the country’s President Bola Tinubu in Cape Town.
It is a sign not only of South Africa’s efforts to repair a bilateral relationship long strained by regional competition but to further his vision of giving the Global South more sway in a forum that can, in theory, outline solutions to some of the world’s most pressing problems.
(Graphic: John McCann/M&G)
That requires Washington’s commitment, as the G20 arrives at decisions through consensus, and its largest members effectively carry a veto. At this point it is an unknown quantity, partly because of the flux the transition to a Republican administration entails.
South Africa will host the first of about 130 scheduled G20 meetings next week, with the “sherpa track” — which deals with the political agenda — and the financial workstreams each meeting for a number of days in Johannesburg.
The finance meeting will be attended by deputy central bank governors. The departments directly involved in hosting the event still do not know whether to expect the vice-chair of the board of governors of the Federal Reserve, Philip Jefferson.
A senior official confirmed that Pretoria expected the US to send “someone” but was not sure who that would be. The M&G has learnt in the meanwhile that Washington will send delegations to attend both the sherpa and finance track meetings.
Cooperation from the US is not only critical in the myriad workstream meetings that will happen in the new year but for longer-term continuity. It is a tradition in the G20 that when a country assumes the presidency, it does not abandon the agenda of its predecessor, but builds on it.
South Africa intends following this unwritten rule, with respect to the work done by Brazil, and will enable the efforts of two new task forces on climate change and hunger — the second a project particularly dear to President Luiz Inácio Lula da Silva.
On Tuesday, Ramaphosa was asked about the risk the US could swiftly undo whatever success South Africa might have in reworking the G20 script to advance its themes — solidarity, equality and sustainability.
It has selected a further five priorities — inclusive growth, critical minerals, reform of international financial institutions, food security and artificial intelligence — while stressing, somewhat idealistically, the need to focus on African imperatives.
“What we have found there has always been forward movement, and there has always been progress that has been made, as the G20 has had to deal with existential issues that affect various parts of the world,” the president said. Hence, he was not overly concerned that anything agreed during South Africa’s term as G20 president would be treated differently.
“All the wonderful decisions will rub off on those that will follow and we will be able, through the various working groups, through our sherpas and sous-sherpas, be able to remind everyone of the decisions that have been taken. So, I see very little room for any major break with what the G20 would have concluded.”
The G20 presidency has become a legacy project for Ramaphosa, as has the reform of the UN Security Council to include two permanent seats, with veto powers, for African nations. Both he and Lamola intend using G20 gatherings to persuade France, Britain, China, Russia and the US to put a better offer on the table than the current proposal — backed by Washington in September — for two seats without veto rights.
Ramaphosa’s strong investment in the G20 was evident in Brazil, with his office taking centre stage at the summit. His long-time legal adviser, Nokukhanya Jele, who doubles as his adviser on international relations, is one of South Africa’s two sous-sherpas.
The director general of international relations is Zane Dangor, who combines strong views on Israel with a belief in maintaining a healthy relationship with Washington.
The second sous-sherpa is career diplomat Xolisa Mabhongo. He is the deputy director for global governance at the department of international relations and has a number of UN postings on his CV. He served as Pretoria’s ambassador to the UN from 2019 to last year and has chaired the UN commissions on crime prevention and criminal justice and on disarmament.
The overall coordination of the G20 will fall to another diplomat with extensive experience in New York, Masotsha Mnguni, who is the department of international relations’ political adviser at South Africa’s permanent mission to the UN. The mission is in charge of text-based negotiations on bringing Africa into the Security Council.
The department’s Ben Joubert will coordinate the sherpa track, while continuing in his other role as sous-sherpa for Brics.