Pambazuka News

South Africa joins Group of Emerging Economic Powers (GEEP)

Rise of African economy to international prominence

Adams Bodomo

2011-01-06, Issue 511

http://pambazuka.org/en/category/features/69855


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Following South Africa’s acceptance as a full member of BRIC, a group of prominent emerging economic powers, Adams Bodomo considers why the country was selected over other candidates, and what the news might mean for the rest of Africa.

FROM BRIC TO GEEP, A CACOPHONY OF ACRONYMS

On 25 December 2010, South Africa (SA) received a Christmas present from the BRIC, a group of prominent emerging countries that are economic trail-blazers in their own regional blocs, including Brazil, Russia, India and China, as stated by Xinhua News: ‘Chinese Foreign Minister Yang Jiechi Thursday said BRIC has accepted South Africa as a full member of the group, which currently includes Brazil, Russia, India and China’.[1]

Goldman Sachs, a global investment company, coined the term BRIC in 2003 as the designation for this group, making use of the first or significant letters of the component country names. With South Africa's presence then, one would think that the name would change to incorporate SA, and indeed the South African minister of International Relations and Cooperation Maite Nkoana-Mashabane, among others, has confirmed that it will now be known as the BRICS.

However, this choice of BRICS would not be correct, and the right name should be BRICSA – Brazil, Russia, India, China, and South Africa, if we stay with this paradigm of choosing first letters of country names to designate economic groups. ‘SA’ would be more representative of ‘South Africa’ in this acronym, as the country is not simply ‘Southafrica’ but South AFRICA! Beyond making better linguistic sense, BRICSA would emphasise the emergence of an AFRICAN economy into international prominence and this must be recognised with the presence of Africa in all aspects of the name. Indeed the South African minister of International Relations and Cooperation emphasised this African inclusion with the following statement: ‘Joining the group is “the best Christmas present ever,” South Africa’s Minister of International Relations and Cooperation Maite Nkoana-Mashabane told 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.”’

I believe, however, that we need a different paradigm of designating these blocs beyond the original Goldman Sachs choice of first letters of country names. Unfortunately, the Goldman Sachs strategy is characterised by lack of foresight to take account of future expansions to include new members. As its stands now, we are already struggling to get a better name, with just the inclusion of only one new member, South Africa. What happens if other members join? Currently, Mexico, Indonesia, and Turkey have also expressed interest in joining BRICSA. What would happen if they joined? Shall we call it BRICSMIT or even BRICSAMIT? Even if we succeeded in choosing one of these names what happens if more countries like Nigeria and South Korea succeed in joining the group in the future? Indeed, worse attempts to propose other acronyms for various economic groupings, such as CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) are on the way.[3] Because of this problem, I propose in this article to call this group, the Group of Emerging Economic Powers, or the GEEP. Since they are now five members, I propose to call the current BRICS, the GEEP5 instead, with possibilities of calling it GEEP6, GEEP7, GEEP8, etc depending on how many countries are in the group. The proposed acronym, GEEP, is presumably superior to the existing acronym, BRIC, because it is not only more amenable to future expansions, but because it indeed describes more aptly what these countries really are in comparison to other existing groups such as the Group of industrialised nations with acronyms such as G7, G8 and G20.

WHY SOUTH AFRICA?

At a more substantial and critical level, however, at least, two crucial questions must be answered to put South Africa's entry into the GEEP in perspective. Why was South Africa chosen over other non-African nations like Mexico, Indonesia, and Turkey, and why did South Africa triumph over other African competitors, especially Nigeria and Egypt, to be selected from the Africa regional bloc to join GEEP4, making it the GEEP5 now?

GEOPOLITICS SUPERCEDES ECONOMICS

In this article, I claim that the answer to the first question is that South Africa was chosen over Mexico, Indonesia and Turkey more for geopolitical reasons than for economic reasons. Here is why: Compared to other non-African applicants to the GEEP4, South Africa pales in comparison to Mexico, Indonesia and Turkey which occupy the 12th, 16th and 17th positions respectively in terms of the countries with the highest GDPs in the world in 2009, according to the CIA World FactBook, one of the most updated websites of economic statistics.[4] With GDPs of approximately US$1.5 trillion,US$1 trillion and US$900 billion, Mexico, Indonesia and Turkey respectively far outpace South Africa with only about US$500 billion in 2009 and standing far below at 26th in the world in terms of GDP. Moreover South Africa pales in comparison to Mexico, Indonesia and Turkey in terms of population. While Mexico had approximately 112 million people in 2010, Indonesia 250 million, and Turkey 77 million, South Africa only had approximately 50 million people in 2010. So why was South Africa chosen ahead of these? The reasons cannot only be economic. Certainly, South Africa was chosen more for geopolitical than for economic reasons. Geopolitical reasons sometimes over-ride the purely economic reasons because of the need for representation from all significant geographical regions of the globe. Africa is a highly significant region in terms of population and in terms of politics at global fora such as the United Nations (UN) where the sheer number of nations and thus voting power from Africa alone make it hard for anyone to ignore Africa. Legitimacy is an important issue in global affairs and any global grouping must seek to be as inclusive as possible to be legitimate. Thus GEEP4 needed desperately to be inclusive and couldn’t have ignored Africa, hence the choice of South Africa over Mexico, Indonesia, and Turkey.

But if South Africa was chosen ahead of these non-African applicants, why at all was it the chosen African country? South Africa is the largest economy on the African continent but it is not by far the largest, so it is not like South Africa doesn’t have credible competitors on the African continent. In Africa two other economies that have expressed interest in joining the BRIC are Nigeria and Egypt. With a GDP of US$470 billion in 2009 Egypt is right on the heels of South Africa as the world's 27th largest economy. Indeed in terms of GDP, Nigeria, with a GDP of US$350 billion in 2009 and occupying the 33rd position globally, is not far below South Africa and Egypt. Moreover, both Nigeria and Egypt with 150 and 80 million people respectively are more populous than South Africa with only 50 million people according to 2010 population estimates. So, again, why was South Africa chosen over Nigeria and Egypt? The reasons are neither purely economic nor purely geopolitical this time; we need to look at what role China is already playing in the GEEP for an answer.

CHINA RULES THE GEEP

The claim in this paper is that the choice of South Africa over Nigeria especially points to the influential role China is already playing and is poised to play in the GEEP, and in the developing world as a whole, especially with regards to its involvement in Africa. The December 2010 admission of South Africa into the GEEP with China as the incoming chair of the group is clearly a clever game of balancing act played by China for people who observe Africa-China relations deeply. Here is why: If we go back in time, since October 2004, we note that China has controversially backed Nigeria in the heated race for an African country to gain a permanent seat at the UN Security Council. Currently South Africa, Nigeria, and Egypt are the declared competitors in Africa. China's position to back Nigeria may have worried South Africa, so it is not surprising that this time China has chosen to back South Africa in this other race. It thus achieves a clever balancing act of satisfying both Nigeria and South Africa. It would definitely be Egypt's turn on another occasion.

SOUTH AFRICA, NIGERIA, EGYPT, KENYA AND THE DRC…IT'S TIME FOR AFRICA

In sum, South Africa's 2010 Christmas Day present from BRICS, now rechristened GEEP5 in this paper, was also a present for all of Africa. This is because it acknowledges Africa’s rising prominence, and it is indeed only the beginning of Africa's rise to international prominence. Despite continuing political, social, and financial instability in some African countries (and it is not uncommon to find political, social, and financial problems even in the already industrialised countries), the coming decade, which may be called the ‘twenty teens’ (2010 to 2019), will mark the rise of several major African economies as emerging economic powers in their regional blocs and, indeed, globally. Beyond South Africa, more African economies are capable and destined to improve their GDPs and per capita incomes, thus playing important roles in global economic blocs such as the GEEP. This African renaissance will most likely begin with the prominent economies in each of Africa's five main geopolitical blocs: South Africa in Southern Africa, Nigeria in West Africa, Egypt in North Africa, Kenya in East Africa, and the Democratic Republic of Congo (DRC) in Central Africa. It's time for Africa!

BROUGHT TO YOU BY PAMBAZUKA NEWS

* Prof Adams Bodomo is director of the African Studies Programme at the University of Hong Kong, China where he teaches courses on Africa-China relations and Africa's experiences with globalisation. He's currently completing a book manuscript to be published as follows: Bodomo, A. forthcoming in 2011. The Globalization of Foreign Investment in Africa: China, Europe and India in Tandem. Casa Africa/Los Libros de la Catarata, Madrid, Spain.
* Please send comments to [email protected] or comment online at Pambazuka News.

NOTES

[1] Xinhua News website: (http://news.xinhuanet.com/english2010/china/2010-12/24/c_13662138.htm - retrieved December 28, 2010)
[2] CIA World Factbook Website: (https://www.cia.gov/library/publications/the-world-factbook/ (retrieved, December 28, 2010).
[3] “…But recently, economist Jim O’Neill of Goldman Sachs, the man who originally coined the initial term BRICs, has designated what he thinks are the next great emerging market opportunities — Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa. The CIVETS for short.” (http://www.skyscrapercity.com/showthread.php?t=1209661 - retrieved: December 28, 2010). Indeed Jim O’Neill has further cooked up another term: The N-11, standing for the New or the Next 11 emerging countries, and comprising South Korea, Mexico, Turkey, Egypt, Iran, Pakistan, Indonesia, Nigeria, Philippines, Bangladesh, and Vietnam.
[4] CIA World Factbook Website: (https://www.cia.gov/library/publications/the-world-factbook/ (retrieved, December 28, 2010).