Our opinion doesn’t count because we can’t be trusted


Our opinion doesn’t count because we can’t be trusted

South Africa is moving towards the periphery of relevance in the international political economy. The world cannot depend on us: not politically, and increasingly not when it comes to financial accountability, says PIET CROUCAMP.


SHORTLY after the Russian invasion of Ukraine, I spoke at Istanbul University in Türkiye with academics in the department of international relations. Subspecies of academics from almost every continent were present, but the Russian professor clearly had a more interesting grasp of world politics than his colleagues. There is always room in academic conversation for being troublesome, and I noted in passing that if nuclear weapons are left out of the equation, it will take the US more or less three months to banish the Russian army to Siberia.

This was before I and the rest of the world became aware of the archaic control and command structures in Vladimir Putin's military. The Russian remarked dryly: “Yes, but will America be able to deal with the universal fear and hatred after that?" His argument was that if a country is not trusted as a political and military power, all other international relations — including trade relations and diplomatic relations — are terminally damaged.

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He's right, and the best example is provided by the US and Britain, which are still struggling with the stigma of George Bush and Tony Blair's baseless motivations for removing the despot Saddam Hussein. The almost historic mistrust towards US intelligence and the White House leaves a raw scar on their relations with most countries.

In a conversation with colleagues this week, I made the point that South Africa is increasingly moving towards the periphery of international politics. The most recent example of this was during the inauguration of the president of Zimbabwe, Emmerson Mnangagwa. Of the 16  leaders of the Southern African Development Community (SADC), only three — including Cyril Ramaphosa — attended. Mozambique's Filipe Nyusi and the Democratic Republic of the Congo's Felix Tshisekedi were the others.

Stamp of approval

Ramaphosa put South Africa's national stamp of approval on the failed election of a corrupt president. The immense pressure that African leaders put on Ramaphosa in June to make it clear to the Russian president during their visit to St Petersburg that the children his regime kidnapped from Ukraine should return, is still fresh in the memory of the African Union. South Africa and Africa do not share a set of policies on Russia and the international political economy.

In the last few years, the Ramaphosa administration has succeeded in alienating Africa and the West. And not just politically; our national fiscal management deeply worries organisations such as the International Monetary Fund and the Financial Action Task Force (FATF). Since February 24, South Africa has been on the FATF's grey list with countries such as Yemen, Nigeria and Albania. The FATF is doubtful of South Africa's capacity and willingness to combat money laundering and the financing of international terrorism.

It's a myth that only your political relations are alienable. With the government's monetary and fiscal policies existentially threatening the economy, we are less and less trusted to maintain local and international supply chains. Just ask Argentina, which does not want to pay its international debt, and Türkiye, which refuses to use the logic of increased interest rates to combat inflation; it comes at the price of lost trust in a financial jurisdiction.

On February 24, 2022, a year to the day before South Africa was banished to the FATF grey list, Ramaphosa decided to align our country with a Russian despot and alienate us from our biggest trading partners. In June this year, four influential US senators called on the US to strip South Africa of the right to host the 2023 forum of the American Growth and Opportunity Act (Agoa) in Africa. This was after several threats from Washington that South Africa could be left out of the Agoa agreement after 2025. Our international policies have economic consequences. Joe Biden, an outspoken moral ambassador for the liberation struggle, has always hoped to establish a relationship with Ramaphosa similar to that between Bill Clinton and Nelson Mandela. This hope has been put to shame.

International irrelevance

The direst situation a prominent economy on the African continent can find itself in is when its opinion is no longer sought. Ramaphosa, in the past a regular guest at G7 summits, was not invited in May. This was after he attended G7 meetings in Canada, France, Britain and Germany in the previous four years. Our Department of International Relations and Cooperation (Dirco) had already invited media houses to accompany Ramaphosa when the news broke. International meetings such as those of the G7, G20 and Brics rarely change the way international relations and agreements work, but if your opinion is no longer desired or valued, it is an indication of your relevance in the algorithm of international relations.

Last month's Brics summit was anything but a political victory for South Africa and Ramaphosa. The South African president hosted the summit, but that's more or less where the benefits ended. Instead, the event was a political tour de force by the Chinese president, Xi Jinping, for whom it was vital that Brics incorporate more countries, because a power bloc can exist only if it has enough members. To the frustration of India's Prime Minister Narendra Modi, the new member states were admitted to Brics based on a wish list from Xi.

The South African government could not offer any principle or theory to explain or justify the criteria for Brics admission. The geopolitical expert Peter Zeihan writes that if a political counter to Western hegemony is the idea, then the political economies newly admitted to Brics represent the most unimaginable combination of jurisdictions. The reality is that the Brics countries are plagued by a dense network of political and economic contradictions.

Brazil exports to China but has no significant trade ties with any of the other Brics partners. China and India's relationship is colder than room temperature, to such an extent that Xi decided it was not worth attending the G20 summit in India this month. Argentina is relentlessly trying to escape its international debt obligations and is mostly interested in access to Brics development money. More than 90% of the capital in the Brics Development Bank comes from China.

Ethiopia's presence has no value for this attempt at an international power bloc. It is a hopeless political jurisdiction with almost no investment potential. Iran and Saudi Arabia's involvement in Brics has to do with their international security interests rather than a political drive to be a political counter to US hegemony.

ANC the only common factor

Russia and South Africa have only the ANC in common. According to economist Dawie Roodt of the Efficient Group, the most important reason for South Africa's limited trade relations with Russia is that they have similar export products. Like South Africa, Russia is an exporter of raw materials. The Russians have energy such as oil that could have been of value to us, but South Africa already buys oil from countries that are more accessible and closer. Like us, Russia does not have a strong manufacturing sector. Our agriculture has found a small market in Russia.

China, on the other hand, is an export economy and dumps the contents of its manufacturing chains into its Brics partners' fragile economies, leading to massive trade imbalances in favour of Beijing. With trade between the US and Mexican value chains recently surpassing the value of Chinese trade with the US for the first time since 2003, Xi is urgently looking for markets to keep his manufacturing chain alive.

Ramaphosa and Luthuli House's idea that Brics can develop an alternative currency to the dollar is simply comical. This will only further remove South Africa from our current entrenched interests in Western financial systems. Trust is crucial to the universalisation of a currency, and Western financial systems, markets and currencies are the only architecture associated with reliable certainty.

The amorphous philosophy of a new international world order needs a fundamental consensus or compromise, something that does not exist and certainly does not figure within Brics. Our finance minister, Enoch Godongwana, definitely does not share Ramaphosa's enthusiasm for a Brics currency. There is no substitute for the confidence that international financial institutions have in the American dollar.

As Charles de Gaulle said, “No nation has friends, only interests," but even vested interests need trust to be long-lasting. This may be a life lesson that Ramaphosa and international relations minister Naledi Pandor can also take to heart. South Africa is increasingly moving towards the periphery of relevance in the international political economy. With the more nuanced attitude of non-alignment that Ramaphosa and his cabinet have taken since African leaders visited St Petersburg, there is the intuitive expectation that South Africa's position in international politics has been restored.

But we cannot be trusted: not politically, and increasingly not in terms of the requirements for financial accountability. Our relevance in the world's financial systems is waning and we are increasingly isolated from established democracies. The US, Britain and various European economies will not easily trust Ramaphosa again, and Africa is clearly also extremely sceptical of the South African government. By implication, South Africa is paying the price for this mistrust. Our opinion is not that important any more.

♦ VWB ♦

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