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Old December 25th, 2010, 07:59 AM   #1
romanSA
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South Africa invited to join 'BRIC'

South Africa has joined the 'big boys' club. The informal 'elite' grouping of major emerging powers - Brazil, Russia, India, and China (BRIC) - have invited South Africa to join their 'club'. As some of you may know, these countries have banded together to counter the G7 countries (although all of them, along with SA and Mexico, have been invited to G7 summits these last few years). Henceforth, the name of the group will be referred to as BRICS.

SA's invite is a major coup given that far bigger economies have been begging to join the group, but have been repeatedly passed over. In my opinion, Indonesia, Turkey, and Mexico (as well as South Korea) are more appropriate candidates given their relatively large economies, large populations, and relatively high economic growth / potentials for growth.

However, methinks SA's selection is more symbolic and strategic rather than merited on the country's size internationally. After all, given SA's economic size relative to the rest of Africa (biggest African economy, by far), and its post-1994 leadership role on the continent, it makes sense to include SA on the basis of it being a fellow regional superpower, which is a role / status all the other BRIC countries have in common. Of course, SA's selection is a slap in the face to Nigeria and Egypt, both of which were also hoping to become part of the group. Now their inclusion in the near future seems unlikely. SA's invite is also a bitch-slap to Goldman Sachs' economist, Jim O’Neill, who actually coined the term 'BRIC' a decade ago. He has gone on record dismissing SA's aspirations to join the group. In fact, the didn't even include SA in his Next 11 (N11) group of emerging countries, after BRIC.

Aside from the bragging rights SA's inclusion into BRIC will entail (for example, a country like Australia will likely never become a BRICS member no matter how much they beg to join) it will be interesting to see if SA's new status will translate to greater direct foreign investment. The rand immediately strengthened to its highest level in almost three years on news of SA's inclusion.

We live in interesting times...

-----------------

South Africa asked to join emerging powers bloc
By the CNN Wire Staff
December 24, 2010 1:07 p.m. EST

Johannesburg, South Africa (CNN) -- Established already as a key player in Africa, South Africa boosted its image Friday after it was formally invited to join a federation of soaring global economies.

China, South Africa's largest trading partner, extended the formal invitation, said Maite Nkoana-Mashabane, South Africa's minister of international relations and cooperation.

She expressed appreciation at the invitation to join the so-called BRIC -- Brazil, Russia, India and China.

Nkoana-Mashabane had written to her BRIC counterparts last year to push for South African membership.

"The rationale for South Africa's approach was in consideration of a matter of crucial importance to BRIC's Member States, namely the role of emerging economies in advancing the restructuring of the global political, economic and financial architecture into one that is more equitable, balanced and rests on the important pillar of multilateralism," she said.

"Our approach to intensifying our relations with emerging powers and other countries of the South is, of course, through active and strong bilateral engagement."

The BRIC countries account for about half of global growth and represent 40 percent of the world's population.

"In the coming decade, we expect this trend to continue and become even more pronounced," a Goldman Sachs report on BRIC said.

Though South Africa is considered an economic powerhouse on the continent, it has been suffering from a recession and high unemployment.


http://www.cnn.com/2010/WORLD/africa...h.africa.bric/
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Old December 25th, 2010, 08:02 AM   #2
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South Africa Asked to Join BRIC to Boost Cooperation With Emerging Markets
By Nasreen Seria
Dec 24, 2010 7:17 AM PT

South Africa has been formally asked to join the BRIC group of major emerging markets, comprising Brazil, Russia, India and China, bolstering its position as Africa’s champion.

Chinese President Hu Jintao wrote a letter to his South African counterpart, Jacob Zuma, to inform him of the decision and inviting him to the BRIC’s third heads of state meeting in Beijing next year, Chinese Foreign Minister Yang Jiechi said in a statement on his ministry’s website today.

South Africa, which has a population of 49 million compared with China’s 1.36 billion, is betting on raising its clout on the world stage by joining BRIC, while strengthening political and trade ties within the bloc. The country accounts for about a third of gross domestic product in sub-Saharan Africa and will offer BRIC members improved access to 1 billion consumers on the continent and mineral resources including oil and platinum.

Joining the group is “the best Christmas present ever,” South Africa’s Minister of International Relations and Cooperation Maite Nkoana-Mashabane told a reporters in Pretoria today. “We will be a good gateway for the BRIC countries. While we may have a small population, we don’t just speak for South Africa, we speak for Africa as a whole.”

Zuma has made state visits to all of the BRIC nations since coming to power in May last year and the government has “lobbied very hard” to be included in the group, which will now be known as BRICS, Nkoana-Mashabane said.

‘Powerful Country’

Africa’s biggest economy is a “powerful country,” even though it’s small compared with the other BRIC nations, Alexei Vasiliev, Russian President Dmitry Medvedev’s envoy to Africa, said on Dec. 22.

South Africa has an economy of $286 billion, which is less than a quarter of that of Russia, the smallest of the BRIC nations. Its population is also dwarfed by India’s 1.2 billion, Brazil’s 191 million and Russia’s 142 million.

Goldman Sachs Group Inc. economist Jim O’Neill coined the BRIC term in 2001 to describe the four nations that he estimates will collectively equal the U.S. in economic size by 2020.

“South Africa’s economy is very small,” O’Neill, who is now chairman of Goldman Sachs Asset Management International, said in an interview from London today. “For South Africa to be treated as part of BRIC doesn’t make any sense to me. But South Africa as a representative of the African continent is a different story.”

‘Big Boys’

At their first summit in Russia in June last year, the BRIC heads of state called for emerging economies to have a greater voice in international financial institutions and for a more diversified global monetary system.

“South Africa as a country is small, but if we go there as a regional market, that’s a different story,” said Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research and corporate finance services on emerging markets. “For South Africa, it’s nice to be associated with the big boys.”

South Africa is the only African nation represented in the Group of 20, and will take up a two-year seat on the United Nations’ Security Council along with India and Brazil next year, resulting in all BRIC nations being represented on the council. The African nation is also part of a trilateral group with India and Brazil, known as IBSA, created in 2003 to coordinate action between the three emerging economies in global forums.

“We bring the most diversified and most advanced economy on the continent,” said Nkoana-Mashabane. “We may not be the same size, but we can open up opportunities for them and through that, we can complete our economic integration on the continent.

South Africa’s rand gained against the dollar to its strongest level since Jan. 15, 2008, trading at 6.7308 to the dollar as of 5:13 p.m. Johannesburg time.

To contact the reporter on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net.

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg

http://www.bloomberg.com/news/2010-1...g-markets.html
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Old December 26th, 2010, 03:58 PM   #3
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Sweet. This will keep goverment on is toes, like FIFA did
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Old December 26th, 2010, 07:31 PM   #4
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If they add Kazakhstan then it would be BRICKS.
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Old December 28th, 2010, 09:37 AM   #5
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SA seeks trade and investor gains from joining Bric club

HOPEWELL RADEBE
Published: 2010/12/28 06:31:41 AM


SA EXPECTED to gain substantial trade and investment benefits when it joined Brazil, Russia, India, China in the Bric grouping of emerging economies, a top government official said yesterday.

SA appears set to join the bloc after an invitation extended last week by China, which holds the rotating chairmanship.

The invitation was made in a telephone call to International Relations and Co-operation Minister Maite Nkoana-Mashabane by her Chinese counterpart, Foreign Minister Yang Jiechi.

Although SA’s government has long aspired to be in the Bric league, most commentators feel its economy is dwarfed by those of the Bric countries, whose growth rates have been the envy of the developed world especially during the recession.

In a recent commentary, Prof Mills Soko of the University of Cape Town Graduate School of Business said SA should not be "obsessed" with joining.

Prof Soko argued that markets in the rest of Africa, the Middle East and other Latin American countries should not be neglected, and emphasised that the Bric grouping was not in fact an organisation, but the construct of an economist, and did not have a strategy, or clear objectives.

"We cannot engage in an ill- defined, ad hoc manner," Prof Soko said, emphasising SA should understand the trade policies of the Bric countries and how these would affect it, and what competitive pressures these would apply. While Bric countries represented markets for South African goods, they were also competitors in sectors such as steel, clothing and textiles and the automotive industry.

However, in an indication of SA’s foreign policy priorities, President Jacob Zuma has made state visits to each of the Bric countries since coming to office.

Goldman Sachs Asset Management chairman Jim O’Neill coined the term "Bric" in 2001 to describe the four countries whose joint output would, he said, equal that of the US by the year 2020.

China’s "invitation" to SA comes barely a week after Russian President Dmitry Medvedev’s envoy to Africa, Alexei Vasiliev, said his country expected SA to join as early as next year .

SA has argued that its accession would give it some economic and developmental advantage in Africa, while promoting the development of Bric and enhancing co-operation among these emerging market economies.

SA stands to benefit from the potential preferential trade pacts and economic co-operation agreements that could be concluded with Bric countries, whose combined population of 2,5-billion people shares between them an estimated annual gross domestic product of more than 9-trillion.

Sipho Nene, acting director- general of the Department of International Relations and Co- operation, said the department’s motivation to Mr Zuma about joining Bric was that it was for SA’s economic and political benefit. "Since Bric has no secretariat, the body does not yet have financial obligations for our country, but we anticipate huge trade and investment spin-offs from it."

On the economic front, he said SA stood a chance to negotiate positions that would enhance its trade and leverage the potential for direct foreign investment from Bric member states.

"By joining Bric we are not starting from scratch … we are merely building on already established trade agreements, standing binational commissions or bilateral relations and other diplomatic and economic links with Bric countries who are already SA’s strategic partners.

"This membership is aimed at keeping SA as an important player in various organisations outside the United Nations, which is supposed to remain the pillar of cooperation and collaboration for the world," Mr Nene said.

Mr Yang indicated that Chinese President Hu Jintao had also invited Mr Zuma to attend the third Bric leaders’ summit, to be held in China next year.

Ms Nkoana-Mashabane said SA was ready to step up communication and co-ordination with China and other Bric members.

"Our approach to intensifying our relations with emerging powers and other countries of the South is through bilateral engagement," she said.

"We also see the Nonaligned Movement and the Group of 77 as important for South-South interaction, especially in the framework of the United Nations.

"Our trilateral partnership with India and Brazil (Ibsa) will get a better balance, and become even stronger, with SA a member of the Brics. SA’s diversified foreign policy objectives and interests allow both groupings (Ibsa and Brics) to co-exist. The mandates of Brics and Ibsa are complementary," she said.

radebeh@bdfm.co.za


http://www.businessday.co.za/article...aspx?id=130374
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Old December 28th, 2010, 02:17 PM   #6
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Russia expects South Africa to join its BRIC alliance with Brazil, India and China as early as next year to give Africa’s largest economy a bigger say in global affairs, President Dmitry Medvedev’s envoy to Africa said.

“We can assume that South Africa will formally become a member of BRIC,” Alexei Vasiliev said in an interview in Moscow today. Vasiliev accompanied Medvedev last year on the Kremlin leader’s first official visit to Africa.

South Africa in February formally asked to be admitted to the bloc of nations, which held its first summit in June 2009 in Yekaterinburg in Russia’s Ural Mountains region. South Africa should join BRIC because of its strategic importance rather than its size, Trade Minister Rob Davies said in a Dec. 15 interview.

Goldman Sachs Asset Management Chairman Jim O’Neill coined the BRIC term in 2001 to describe the four nations that he estimated would equal the U.S. in joint economic output by 2020. Medvedev said on Nov. 12 that the BRIC group had reacted positively to South Africa’s request to join. BRIC leaders are due to meet in Beijing next year for their third summit.

South African President Jacob Zuma has lobbied for stronger political and trade ties with BRIC counties since coming to power last year. South Africa’s gross domestic product of $286 billion is less than a quarter of Russia’s, the smallest economy in the alliance. Its population of 49 million is also dwarfed by China’s 1.3 billion, India’s 1.2 billion, Brazil’s 191 million and Russia’s 142 million.

“South Africa represents a third or quarter of the continent’s entire GDP,” Vasiliev said. “It’s a powerful country, though of course it’s not comparable in size to other BRIC countries.”

The second BRIC summit was held in Brazilia in April.
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Old December 30th, 2010, 03:52 AM   #7
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An interesting perspective on this issue posted by a newspaper reader.


Thicker than BRICS
by George Annandale
2010-12-29

Poor children, hoping and dreaming of a better and more prosperous future than the life they have become used to: hungry for the good things will - in an attempt to get a piece of this wonderful perceived world of wealth and largesse - often try to attach themselves to groups of rich kids, often humbling themselves and suffering great humiliation in their vain attempts to be part of this world of money and bling.

Too often the poor kid ends up a skivvy to be cast aside when he becomes inconvenient or if he is not found to be expedient anymore.

It is for this reason that South Africa in the shape of Jacob Zuma has been crawling at the feet of the “rich kids”, Hu Jintao (China), Medvedev (Russia), Singh (India) and Silva (Brazil). The analogy are clearly illustrated by the GDPs of the respective members of this group with China’s GDP greater than that of the three similar sized economies (Brazil, India and Russia) whilst the poor kid, South Africa has an economy, less than a quarter the size of the smallest economy in that group, Russia - a situation that are being exacerbated by the day as those economies grow at rates in excess of 7% per annum whilst the South African economy, thanks to the headless and confused Economic Cluster of Disaster (Ebrahim Patel, Manuel and Davis) bumbling around in the gloom of revolutionary Alliance rhetoric.

It is clear that the gracious invitation by Hu Jintao for South Africa to join this selected club has nothing to do with our economic ability but rather our willingness and even eagerness to be used and abused at the expediency of the so-called BRIC countries.

It is clear that South Africa has very little to offer to this grouping, which exist for one purpose only; to expand the influence sphere of China in the first place and, to a lesser extent that of Russia. The objectives of China is the creation of markets for their goods and services; obtaining sources of raw material to feed their industries and supply job opportunities for their millions of citizens; skills and technology they can replicate and most importantly, political influence.

South Africa provides that better than anybody else, they don’t need coercion to the bidding of China, they will prostitute themselves willingly as clearly indicated by our attitude towards Myanmar, North Korea, the Dalai Lama and the plight of Tibetans and the cold shoulder given the Nobel Peace Laureate, Liu Xiabo.

South Africa has already shown its willingness to provide discounted iron ore and ferrochrome resources to China, India and Russia. The country is also critical in the provision of financial services at China’s terms, clearly illustrated in the Standard Bank deal which clearly contributed to the woes of that bank, to access African markets.

China are also using South Africa as a useful fool, willing to ensure Mugabe - having shown his willingness to sign his country’s treasures over to Chinese entities, at a great discount in exchange for a handy commission - stays in power. Countries like South Africa are expedient in the world according to China, whilst they attack and castigate the guilt ridden Imperialists, begging bowl in hand, choking them with demands for aid, China are covertly slipping the choke chain over their heads and, like an obedient dog, South Africa will be too happy for scraps from the table of the new master.

In the end there will be more jobs for South Africans; jobs in industries and sectors now scorned; jobs on mines and farms, jobs frowned upon and not worthy of entitled South Africans, but the Chinese will not pay the prices South African workers want, they will want more efficient output than we can give; they will expect their raw material at a competitive price (a bargain) and consequently the South African worker will have to produce at the price of his Chinese, Indonesian or Indian counterpart.

The “Bricification” of South Africa, like the Soccer World Cup, will no doubt make some very proud, but like the WC - an economic non-event according to some and a disaster according to others - which brought South Africa economically nothing whilst enriching FIFA, it will be an economic non-event, costing South Africa dearly.

All this does not particularly bother the ruling elite. They will benefit and prosper; like the tribal kings and chieftains centuries ago they will sell their people into slavery without blinking an eye and, like the rulers of today blaming the western imperialists for their part in slavery, so will rulers; a hundred years hence look back and blame Zuma, Mugabe and their likes for the slavery brought about by the “Bricification” of the black continent.
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Old December 30th, 2010, 05:29 AM   #8
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SA, not just another Bric in the wall
JON HERSKOVITZ
JOHANNESBURG, SOUTH AFRICA
Dec 29 2010 16:55

South Africa's ascension to the Bric group of major emerging economies was more about politics than economics and reflects expectations it will be the gateway for investment in the fast-growing continent.

South Africa, with a $285-billion economy, a much smaller population and tepid growth of about 3%, pales in comparison to Bric states Brazil, Russia, India and China.

"It's not a natural fit," said Razia Khan, Africa head of research at Standard Chartered.

South Africa's economy is less than a quarter of the size of Russia's, which is the smallest in the original grouping. While it may be the largest in Africa, it is only a bit bigger than China's sixth-richest province.

South Africa's biggest backer for Bric has been its largest trade partner, China. Last week, Beijing extended an invitation for Pretoria to join and asked President Jacob Zuma to attend a summit of Bric leaders it will host next year.

"This is something that China sees in its own interest with its aim of understanding the future of Africa and becoming an ever bigger presence there," said Marvin Zonis, professor emeritus at the University of Chicago Booth School of Business.

"It is really smart on the part of China to do this and it is also really good for South Africa. It legitimises South Africa as a future global power and as an investable country," Zonis said.

China has invested heavily in Africa for years, seeing it as a source of commodities to power its economic engine and an export destination for its products that will grow over time.

China's official media last week said trade between China and Africa would hit a record this year and stood at $115-billion as of the end of November.

China emerged as Africa's largest trading partner in 2009, outpacing the European Union and the United States, China's People's Daily said.

Shifting power
Bric has been seen as moving economic activity away from the established powers in Europe and North America and erecting a wall that limits their global power.

With sub-Saharan Africa's total economy growing from $322-billion in 2000 to $931-billion in 2008, according to the International Monetary Fund, it seemed that an African state would eventually join the group.

"This is more about perception and projecting Africa as the frontier market that it is, rather than the one that is ignored when talking about Bric," said Martyn Davies, CEO of Frontier Advisory and a specialist on African-Chinese economic ties.

"This will help South Africa project itself as a first tier emerging market rather than its current second tier status."

South Africa has been lobbying for some time behind the scenes to be granted Bric membership, officials have said.

Davies said South Africa could better earn a seat on economic merit if it can integrate the economies of the Southern African Development Community -- a 15-state regional block.

South Africa's rand has strengthened since it was invited to join Bric, partly in expectation of an inflow of funds from realigning Bric portfolios.

Zonis said the impact from capital inflows will be limited, and long-term gains will come from how well South Africa can use its Bric status to make itself more attractive for investment.

Eagles and nest
The Bric countries have sought greater clout for their grouping, holding a summit in Russia in 2009. "Bric" is a term invented in 2001 by Jim O'Neill, the chairperson of Goldman Sachs Asset Management.

O'Neill has said South Africa should not be included.

"How can South Africa be regarded as a big economy? And, by the way, they happen to be struggling as well," he said this month.

There are worries that as Bric takes on a life of its own, the listing of South Africa could prompt others to invite their friends to join, swelling membership and perhaps dooming the grouping to irrelevance.

Some have suggested the hard-charging economy of Indonesia may be a better fit, while global investment group BBVA has said the Bric concept itself has become outdated.

It has proposed a group called Eagles, short for "emerging and growth leading economies" it predicts will contribute about 50% of global growth over the next decade.

Its Eagles, as sorted by relevance, are China, India, Brazil, Indonesia, South Korea, Russia, Mexico, Egypt, Taiwan and Turkey.

South Africa was on a watch list of 11 other up and coming states dubbed the "Eagles Nest". - Reuters


http://www.mg.co.za/article/2010-12-...ic-in-the-wall
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Old December 30th, 2010, 05:35 AM   #9
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South Africa's accession to BRIC good for emerging economies: China

English.news.cn
2010-12-28 17:13:20

BEIJING, Dec. 28 (Xinhua) -- China on Tuesday said South Africa's accession to the BRIC, which currently includes Brazil, Russia, India and China, will boost cooperation between emerging economies.

"We believe that South Africa's accession will promote the development of the BRIC and enhance cooperation between emerging economies," Chinese Foreign Ministry spokesperson Jiang Yu told a regular briefing on Tuesday.

Jiang's comments came as the BRIC countries accepted South Africa as a full member of the group last week. China now holds the rotating chairmanship of the group.

Chinese President Hu Jintao had issued an invitation letter to South African President Jacob Zuma, inviting him to attend the third BRIC leaders' meeting to be held in Beijing next year, Jiang said.

She said cooperation among BRIC countries was stable, mutually beneficial, open and transparent.

BRIC is a term coined by Goldman Sachs economist Jim O'Neill in 2001 to describe the growing influence of large emerging economies


http://news.xinhuanet.com/english201...c_13667838.htm
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Old December 30th, 2010, 11:01 AM   #10
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We benefit the most so ag why not
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Old December 31st, 2010, 12:46 PM   #11
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It's bollocks.

I largely agree with the analysis of SA being essentially manipulated by China for African influence in turn for security and price of raw materials; much less so for markets - Africa is too poor and who else would Africa buy their cheap imports from anyway.

So they give us a pointless acronym and we grovel our thanks.

The only thing that should matter in SA economics is lifting the long term economic growth rate from 3 to 8+% and I see no relevance of this on that.

Happy new year!
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Old December 31st, 2010, 04:46 PM   #12
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To be manipulated(if we can use that logic for a second) by a Superpower in waiting,can only be good for the country.Go on SA make the most of it,I think history is on your side.
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Old January 1st, 2011, 05:57 PM   #13
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Quote:
Originally Posted by clive3300 View Post
It's bollocks.

I largely agree with the analysis of SA being essentially manipulated by China for African influence in turn for security and price of raw materials; much less so for markets - Africa is too poor and who else would Africa buy their cheap imports from anyway.

So they give us a pointless acronym and we grovel our thanks.

The only thing that should matter in SA economics is lifting the long term economic growth rate from 3 to 8+% and I see no relevance of this on that.

Happy new year!
Clive3300, I dont think they need SA for that, they already buy all the raw materials too fuel their ever growing needs from Africa anyway.
China has some pressing issues, but at least its investing and trading with Africa, something the US or EU have failed too do so for many decades.
SA has too keep its eyes on the prize, and search for its own growth targets.
This decision promotes SA as Africas Superpower, and can only be beneficial.
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Old January 2nd, 2011, 04:44 PM   #14
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Analysts sceptical over Bric invite
Jan 1, 2011 10:00 PM | By TSHEPO MASHEGO

The decision this week by the Chinese government to invite SA to join the Bric (Brazil, Russia, India and China) group of emerging countries has caught many analysts off-guard.

'China is after the country's resources, but another thing the Chinese covet is SA's political clout'

According to Chinese Foreign Ministry spokesman Jiang Yu, Chinese President Hu Jintao has invited President Jacob Zuma to attend the third Bric leaders' meeting to be held in Beijing this year.

Yet many analysts are sceptical about SA's suitability as Bric material.

First, the country's economy is only a quarter the size of the next-smallest Bric economy, Russia; second, SA's growth rate is pedestrian compared with the Bric average; and third, SA does not have the population of the other members.

"It's not a natural fit," said Razia Khan, Africa head of research at Standard Chartered.

Goldman Sachs Asset Management's chairman, Jim O'Neill, who coined the Bric phrase earlier this decade, was reported to have said: "While this is clearly good news for SA, it is not entirely obvious to me why the Bric countries should have agreed to ask SA to join.

"How can SA be regarded as a big economy? And, by the way, they happen to be struggling as well."

Lyal White, director at the Centre for Dynamic Markets at the Gordon Institute for Business Science (GIBS), was even more doubtful about the benefits of Bric membership.

"SA must not misunderstand the nature of Bric - it is an acronym dreamt up by orthodox banks based in the global north. Bric does not have development initiatives emanating from it, unlike the Ibsa (India, Brazil and SA) forum; rather it is a grouping about market and economic access.

"The reality is that there is very little consensus within Bric. For example, each country has a different growth path or policy, and there is no political will to deal with global issues such as the ensuing currency war.

"SA should realise that Africa is the future. We should focus on our competitive strengths and position ourselves as the 'gateway country' in Africa," he said.

Politicians, however, are adamant that SA's ascension to the big league of emerging markets is a portend of the new world order that is unfolding in the wake of the severe recession of recent years.

The SA government believes the decision is the key to unlocking further investments into the local economy, as well as solidifying the country's ambitions to be a central player in the emerging global landscape.

Department of International Relations and Co-operation Minister Maite Nkoana-Mashabane said: "The rationale for SA's approach was in consideration of a matter of crucial importance to Bric member states, namely the role of emerging economies in advancing the restructuring of the global political, economic and financial architecture into one that is more equitable, balanced and rests on the important pillar of multilateralism."

On Wednesday, Russian foreign minister Sergey Lavrov justified the decision saying: "The entry of SA, an active participant in the G20 and the largest economic power in Africa, will not only increase the total economic weight of our association, but also will help build opportunities for mutually beneficial co-operation within Bric."

The decision clearly makes more sense politically than economically. For SA it is seemingly part of a larger plan to join key global decision-making bodies, with the UN Security Council being the ultimate prize.

Dawie Roodt, chief economist at the Efficient Group, said: "China is after the country's resources, but another thing the Chinese covet is SA's political clout - the country, due to its history and its transition, commands a lot of global respect. SA definitely punches above its weight and this ascension to Bric will definitely add to SA's growing political clout.

"Bric represents the second tier of the most important countries. SA and Russia represent the commodity-producing countries, China is the manufacturing centre of the world, Brazil is the agricultural giant and India is the software and IT specialist. Therefore the countries each have their unique competitive advantages," he said.

Marvin Zonis, professor emeritus at the University of Chicago Booth School of Business said: "It is smart on the part of China to do this and it is also good for SA. It legitimises SA as a future global power and as an investable country."

Economically, the impact is already being felt in view of the significant strengthening of the local currency since the Chinese announcement.

The rand touched three-year highs against the US dollar on Thursday morning, trading below R6.60 to the US dollar. This brings its total gains against the dollar to over 30% since the beginning of 2009.

http://www.timeslive.co.za/business/...er-Bric-invite
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Old January 2nd, 2011, 05:44 PM   #15
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any view on this Jerome????
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Old January 2nd, 2011, 05:48 PM   #16
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Personally i dont get what people are whinging about. Being left out of the group China would still be doing what it likes across Africa. With SA being in it it increases recognition of country and at least puts us at the same table. We already have our 3 way "alliance" with Brazil and India, this was merely a natural extention of that.
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Old January 2nd, 2011, 10:58 PM   #17
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My take? Ok…

The world is made up of various economic and geopolitical tiers / poles / spheres of influences (and alliances, in some instances), some with overlapping membership. BRIC is not a political alliance. Nor is it an economic alliance. Rather, it's about creating a new geopolitical force / voice / sphere of influence to counter the traditional big economic players that have dominated the world post-World War II and post-Soviet Union break-up era: USA, Western Europe (and relatively recently, the EU), and Japan.

Excluding military alliances such as NATO and formal economic trade zones such as NAFTA, Eurozone, ASEAN, etc, in my opinion, these tiers comprise as follows:

TIER 1: USA (on its own); EU (as a collective); the UN Security Council (UNSC) [the permanent members in their collective capacity as UNSC members (i.e., US, Russia, China, UK, France)]; and most recently, BRIC (although BRIC lacks any cohesive policy as a bloc unlike the EU, its membership comprises 40% of the world's population, 25% of its landmass, and a combined PPP GDP of more than $18 trillion, which is greater than that of the US and EU individually; Its thus a significant grouping of nations that will represent an increasingly important geopolitical voice in the future).

TIER 2: G7 countries, G8 (G7 and Russia) + 5 (China, India, Mexico, SA, Brazil) countries, G20 countries

TIER 3: Regional superpowers (and exclusive geopolitical alliances): South America / Latin America: Brazil; South Asia: India; East Asia: China; Europe: Germany; Africa: South Africa; G77 countries, the NAM, [and arguably IBSA (India, Brazil, South Africa), and BASIC (Brazil, South Africa, India, China), both of which are formal alliances on a range of issues]

TIER 4: Regional powers: South / Latin America: Brazil, Mexico, Argentina; Southern Africa: South Africa; West Africa: Nigeria; North Africa: Egypt; East Africa: Kenya; Europe: Germany, UK, France; Asia: China, India, Japan

TIER 5: Sub-regional powers (but, in some instances, growing rapidly in influence): Asia: South Korea, Pakistan, Indonesia, the Philippines, Thailand, Australia (if you consider Oz as part of a greater Austral-Asian region; Oceania is too small to exist as its own bloc, in my opinion); Africa; Algeria, Morocco, Tanzania, Ethiopia; Europe / Middle East: Italy, Spain, Turkey, Saudi Arabia, Iran; South / Latin America: Venezuela, Columbia, Chile.

TIER 6, 7 ETC...


Not being part of BRIC leaves is where we are: at best, a Tier 3/4 power (a Tier 2 power, if you include our diluted G8+5 or G20 status). Jim O'Neill, the man who coined the term 'BRIC' may even argue that we're a Tier 5 power (or lower!).

Being part of BRICS elevates our status to a Tier 1 player, i.e., amongst the most influential countries in the world.

In short, I think we're better off with our new status, than without it. It elevates us to 'global player' status, and augers well for SA's aspiration to permanent UN Security Council membership, if the UN Security Council were to ever be reformed to include additional permanent members. Proposed reforms to the UN Security Council include Africa getting 2 permanent seats [probably without veto power though]. Currently, SA, Egypt, and Nigeria are lobbying / fighting behind the scenes for these possible seats. With SA's ascension to BRICS, our claim to one of these two seats is strongly reinforced, leaving Egypt and Nigeria to fight for the remaining one.

With BRICS membership, SA will also play a key role in reforming the world's financial system (which will hopefully translate to us getting more clout in the IMF and World Bank), and negotiating new global treaties (such as on climate change; in this regard, I hope we step up and provide actual leadership instead of largely going along with the untenable positions of other BRIC countries). However, whether SA's new BRICS status translates to more investment and jobs, we'll only know over the next 2 years. However, international fund managers already invest more in BRIC countries, so that could auger well for the JSE, and by extension, SA's economy.


Re: whether SA’s membership in BRICS is justified…

I think SA can make its BRICS membership count (and silence its detractors / critics) if it involves / represents its fellow 5-country Southern African Customs Union (SACU) and 15-country Southern African Development Community (SADC) members, the latter grouping of which represents roughly half of Africa’s landmass, a population of 234m (more than Russia and Brazil). In regard to the SACU, SA should push for the rand to become the formal common currency (it’s already the de facto legal tender in Lesotho, Swaziland, Namibia; also in Zimbabwe, which is not a member of SACU but a member of SADC, although Botswana will push back purely on grounds of national pride, not financial logic).




The SADC already formed a free trade agreement with the 5-country East African Community (EAC - population: 125m; PPP GDP of $105bn) and 20-member Common Market for Eastern and Southern Africa (COMESA – population: 406m; PPP GDP of $736bn) to form the Africa Free Trade Zone (these economic blocs have over-lapping membership). SA is easily the giant, by a long shot, of this combined zone and, by extension, its de facto leader. As such, in my opinion, SA’s membership in BRICS is justified.

Other BRIC wannabes (such as South Korea, Turkey, Indonesia, and Mexico) can’t claim to represent anything close re: population and geographic area. In time, the Africa Free Trade Zone, through SA, should reach out to join forces with the Economic Community of Western African States (ECOWAS), the Economic Community of Central Africa States (ECCAS), and ultimately, seek to encompass the entire 53-member African Economic Community (EAC - estimated population: 1 billion; PPP GDP $2 trillion).


Africa deserves a presence at a Tier 1 level and BRICS is a means to this end. Currently, SA is the best country to represent COMESA, and arguably, the rest of Africa too. Thus, our BRICS membership is fully justified.

In summary, I think BRICS will herald (it already is doing so) a multi-polar world vs the current unipolar (US/Western Europe) or bi-polar (US and EU).

Sorry for the somewhat long post but you asked for my views on this issue.

Last edited by romanSA; January 2nd, 2011 at 11:19 PM.
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Old January 3rd, 2011, 10:17 AM   #18
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I also believe one of the key considerations for the BRIC countries in inviting SA has to do with the repidly devaluing dollar. In the near future calls to replace the dollar as reserve currency will grow more and more shrill as the US government continues debasing their currency, countries cannot conduct international trade in a continously devaluing currency.

Any new replacement reserve currency (basket of currencies) will require the rand in it, the Rand is rapidly becoming a 'Hard Currency' and it will be the de facto African currency or the basis of any 'Afro'. Thus having a curency such as the Rand being part of any replacement reserve currency will give the new 'Bric Curency' legitemacy and depth.

The implications are quite profound, a strong Rand, i.e R3 to the dollar will change South Africa from being a resource exporting economy to an industrialised advanced economy...
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Old January 3rd, 2011, 10:19 AM   #19
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The Rand has reached parity with the once powerful Botswana Pula
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Old January 3rd, 2011, 01:22 PM   #20
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So we are now teh strongest currency in Africa?
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