President Cyril Ramaphosa stands next to leaders of other Brics nations including Russian President Vladimir Putin. (Photo by Mikhail Svetlov/Getty Images)
When Goldman Sachs’ famed economist, Jim O’Neil, coined the term “Bric” in 2001 as part of a report chronicling the world’s new growth centres in the 21st century, he wasn’t thinking that these countries would one day forge some sort of economic and political union. It was just another acronym used to package as a sales pitch for analysts to then take to their clients. It’s all about the packaging. Well at least, that’s how I think the investment world works.
Bric is, or rather was, a product, an investment option for those seeking higher growth rates than what the world’s leading economic powers at the time could offer.
What would happen in the decade to follow is a global recession that reminded economists of the Great Depression of the 1920s, an event that would usher in a new world, where the US would replace the British Empire and hold primacy in the world. This was especially true after World War II, which would take place in the aftermath of the depression.
As the world considered what the end of Lehman Bros and the possible collapse of the financial capitals of New York and London in 2009 would mean for all of us, the investment world (always seeking a higher return) sought the next growth frontier as a subprime mortgage crisis in the US threatened everything we thought we knew about Western capitalism and, in turn, democracy. It was at this stage that O’Neil’s term, Bric, took on a life of its own.
India’s prime minister in Manmohan Singh and presidents of Brazil in Lula da Silva, Russia in Vladimir Putin and Hu Jintao in China became the most important men in the world. Their economies were heralded for their greater promise over developed economies that had been bludgeoned by the financial sector crash. Opportunistically, and egged on by everyone and anyone including big business, South Africa’s sought to hitch itself with this grouping of nations.
It made sense at the time. We had just hosted the 2010 World Cup and, with warm and fuzzy feelings still lingering in the air, the letter “s” was added to the acronym towards the end of that year. With China’s insatiable appetite for our raw materials, our influential mining giants were happy for us to climb in. There was also the fact that for Brazil and India, like ourselves are in the Southern Hemisphere, there was much to benefit from closer relations. It just made sense to cling on to the coat-tails.
By doing so, South Africa was in the big leagues, despite our very small economy. Brazil has a population of 214 million and an economy worth $1.9 trillion, Russia’s population sits at 143 million and has an economy worth $2.1 trillion, India has 1.4 billion people and has an economy of $2.7 trillion and the granddaddy of them all, China, has 1.4 billion people and is the world’s second-biggest economy at more than $13 trillion. With a population of about 60 million and an economy in the billions of dollars, we were basically Kaizer Chiefs in the English Premier League.
While I could always see the value we could garner from the association — the promise of access to these markets is, after all, attractive — I’ve always wondered what benefit they would derive from an association with “Nelson Mandela’s country”, as we are still called in international circles. Cynically, maybe it’s dumping chickens in the case of Brazil or acting as a beachhead for the Chinese factory to flood African markets with their cheap goods.
I think it’s the political ties with South Africa that is the allure of this partnership, for as much as we may roll our eyes, we still carry a fair amount of heft and credibility on the international stage — despite ourselves.
For a rogue state and leader like Russia and Putin, a South African association provides a useful ally in the battle against the West. Forget what any supposed “ANC cadre” says about modern day Russia; it’s not the Soviet Union of yesteryear that trained some of our freedom fighters. They are two totally different beasts. Putin is not Lenin or revolutionaries of his age, but rather someone akin to Peter the Great from the 17th century. Ideology, the battle between communism and capitalism, has no place in the wedge between Moscow and the West. If anything, it’s a romantic pursuit of a bygone era where the country shaped the world.
Were we not in a Brics alliance, I think it would be easier for the President Cyril Ramaphosa to use the protections afforded by our non-aligned stance to outright criticise Russia’s invasion of Ukraine in a similar way that Mandela denounced the war-mongering George Bush in the Iraq War. He simply can’t. We have forged some rather deep ties in the years since we joined Bric. An opportunistic alliance in pursuit of growth regardless of our political differences of which there are many.
We must remember that this alliance was forged with the blessing of all and sundry, including “Big Business”, the most influential of lobby groups in this country. What a tangled web we have weaved. Perhaps if it were it not for O’Neill we wouldn’t have been as easily enticed to join up with the hippest club in town in the aftermath of the 2008 global recession.