The economists Daan Steenkamp and Jacques Quass de Vos make an important observation about the shortfalls in South Africa’s geoeconomic approach in their latest Business Day article (“SA’s geoeconomic gamble is not paying off”, September 15).
Among other things, they argue correctly that the BRICS grouping has provided limited economic benefit to South Africa. The exception is China, with which South Africa has deeper trade relations, though more could be done in agriculture and other sectors of our economy if we had a free trade agreement.
However, the path forward in this challenge is not necessarily to abandon the BRICS bloc but to elevate its economic ambition. BRICS remains a loose, informal grouping with no sound economic or trade approach that keeps the countries together.
In fact, when one considers the intra-BRICS trade, it quickly becomes clear that little is happening in the grouping beyond political matters, with China again being an exception for many countries on trade matters. The constraining factor, as a result of the lack of a BRICS free trade agreement, is the observation that Steenkamp and De Vos make about the low exports and investment in this region.
Much of South Africa’s economic relationships and investments are with the Western world. But South Africa doesn’t have the luxury to choose either or. Our approach should be to balance and retain our existing trading partners in Europe, the Americas, and other parts of the world, while simultaneously pushing for an ambitious trade agreement within BRICS and exploring ways to attract investments.
Our focus should be on bettering South Africa by skilfully navigating the complex geoeconomic environment of the day.
In essence, we should (economically at least) reach out to and be friends with all who want to do business with us. India, by the way, is likely to be a global engine of growth for the next two decades or so, as its per capita GDP catches up. So, deepening trade is key to long-term progress.
If you enjoyed this post, please consider subscribing to my newsletter here for free. You can also follow me on X (@WandileSihlobo)
