Much has been said about South Africa joining the BRIC. Detractors say that the country is punching way above its weight. One of the biggest critics of the inclusion has been Jim O'Neill, Chairperson of Goldman Sachs Asset Management, who originally coined the term BRIC in 2001.
O'Neill is on record as saying that he believes South Africa was invited for political reasons and not economical ones. He says South Africa's working population is too small, and therefore had plumped for Nigeria to be a better choice to join the BRIC. South Africa's total population is 50 million with Nigeria triple that at 150 million.
Other commentators say it is degrading the way South Africa went about lobbying for membership instead of being invited, and that the country could end up playing second fiddle to Russia, Brazil, China and India.
But the fact remains that before China had made the invitation to South Africa, no doubt much research had gone into this decision and other BRIC members had also been consulted.
South Africa is the business gateway to the continent, has a relatively low level of corruption and after hosting a widely acclaimed successful World Cup, is riding the crest of a positive image wave. It is politically stable and has sound social infrastructure. No doubt these were the attractive factors that helped seal the decision to be invited to join the BRIC.
It is also, of course, common knowledge that South Africa is the continent's biggest economy and already part of the G-20, despite growth figures that reveal the struggle to recover from a recession, increase productivity and find solutions to the high unemployment figures.
And that is what perhaps makes many see this invitation as a political move. One of these commentators is Martyn Davies, CEO of Frontier Advisory Services. He believes the politically astute move is what South Africa needs to thrust the country into the first tier of emerging markets, rather than the second tier it presently occupies.
"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," says Davies
He says South Africa could better earn a seat on economic merit if it can integrate the economies of the Southern African Development Community (SADC) - a 15-state regional bloc with a population of 250 million.
Countries like Indonesia, Mexico, South Korea and Viet Nam were all above South Africa on the pecking order for BRIC membership.
"What they don't have is a hinterland economy of 250 million people in Africa. If we can confidently market our region as an integrated market to the BRIC countries, then that's exactly what we need," says Davies.
Sub-Saharan Africa's total economy grew from $322 billion in 2000 to $931 billion in 2008, according to the International Monetary Fund. A clear sign that united, this region has clout.
Does South Africa deserve a place at the BRIC table?
Clearly Africa needs to be represented along with the world's new emerging nations and on the evidence at hand South Africa is that vehicle of representation.
What form this representation takes is sure to be high on the agenda when South African President Jacob Zuma attends the 3rd BRICS Leaders' Summit to be held in China later this year.
The Editor |