South Africa’s Trade Partners: Navigating the BRICS Alliance and US Relations

South Africa’s international relations with its allies in the BRICS alliance and the United States play a pivotal role in shaping its political, economic, and strategic landscape. Its membership in the BRICS bloc offers opportunities for increased trade, market access, and global influence. Simultaneously, its bilateral relations with the United States foster economic cooperation and strategic alignment through African Growth and Opportunity Act (AGOA). This article delves into the complex dynamics between South Africa and its allies.

Navigating tensions between the BRICS alliance and the West requires careful diplomacy and a focus on economic adaptability. South Africa must demonstrate that its BRICS membership does not hinder its alignment with Western interests and values. The emerging multipolar world offers South Africa a chance to diversify its trade and investment portfolio, ensuring long-term economic growth and prosperity. By striking a balance between its BRICS and Western alliances, South Africa can maximize its economic potential and contribute to a more inclusive and equitable global order.

The Value of BRICS for South Africa

Since joining the BRICS alliance in 2010, South Africa has witnessed significant economic benefits and strengthened trade ties with its fellow member countries. The core objective of the BRICS countries has been to enhance economic and financial cooperation, and South Africa has actively participated in this endeavor. One of the key pillars of BRICS cooperation is the strengthening of economic and financial ties, which has resulted in increased market access, mutual trade, and investment opportunities for South Africa.

Trade between South Africa and other BRICS countries has been on the rise, with over 17% of South Africa’s exports in 2021 being destined for BRICS nations. Similarly, over 29% of South Africa’s total imports came from these countries. This trade relationship has been crucial for the growth and development of local industries, particularly as South Africa focuses on improving its economic capacity and competitiveness. By diversifying its trade portfolio to include more manufactured goods, South Africa has been able to reduce its dependence on raw commodities, leading to a more sustainable and robust economy. Total South African trade with other BRICS countries reached R702 billion in 2021 up from R487 billion in 2017.

One sector with immense potential for growth is tourism, which has been severely impacted by the COVID-19 pandemic. South Africa has traditionally welcomed tourists from other BRICS countries, with visitors from India and China accounting for 65% of all arrivals in 2018. The introduction of the new eVisa program has made it easier and more cost-effective for tourists from these countries to visit South Africa, thereby contributing to the recovery and revitalization of the tourism sector.

The Role of the BRICS Bank and Infrastructure Development:

As South Africa embarks on ambitious infrastructure development plans, the New Development Bank (NDB), also known as the BRICS Bank, has played a crucial role in providing financial and project preparation support. The NDB has already disbursed $5.4 billion to South Africa, primarily aimed at improving service delivery in critical sectors. This financial support has been instrumental in driving economic growth, enhancing public services, and addressing key developmental challenges.

Moreover, the NDB has demonstrated its flexibility and responsiveness during times of crisis. In response to the COVID-19 pandemic, the bank swiftly approved $2 billion for each BRICS member under the COVID-19 Emergency Loan Program. These funds have been utilized to combat the pandemic, support economic recovery, and strengthen healthcare systems. The NDB’s commitment to sustainable development and infrastructure projects aligns with South Africa’s own goals and provides a valuable avenue for financing and collaboration.

BRICS and Food Security Cooperation:

Food security has become a growing concern globally, exacerbated by the COVID-19 pandemic, conflicts, and the impact of climate change. The BRICS alliance recognizes the importance of maintaining sustainable agriculture production, ensuring the unhindered supply of agricultural inputs, and stabilizing the functioning of food value chains. To address these challenges, the BRICS Ministers of Agriculture adopted a Strategy on Food Security Cooperation.

This strategy aims to foster cooperation in various areas, such as seed supply, agricultural technology transfer, market access, and the development of resilient food systems. By working collectively, BRICS countries can mitigate the risks associated with food insecurity and advance sustainable agricultural practices. South Africa’s participation in this initiative contributes to its own food security objectives while fostering regional cooperation within the alliance.

BRICS and the Democratization of the International Order:

Beyond economic cooperation, the BRICS alliance seeks to democratize the international political economy and promote a more inclusive global order. The bloc has utilized platforms like the G20 to advocate for international financial stability, climate change mitigation, and sustainable development. By challenging the dominance of the US dollar as the world’s reserve currency, the BRICS countries aim to address the shortcomings of the existing monetary system.

The emergence of the BRICS alliance has also reshaped global governance dynamics. The bloc serves as a counterweight to the unilateral power and dominance exhibited by the US in global governance since the end of the Soviet Union. The BRICS countries’ efforts to democratize financial and governance institutions contribute to international accountability and address the concerns of the developing world.

The Economic Importance of BRICS and Market Access

The BRICS alliance, with its member countries accounting for approximately 31.5% of global GDP, offers South Africa significant economic opportunities and market access. China, in particular, has emerged as a vital trading partner for South Africa, with trade volumes surpassing those with the US. The size of China’s market, with a population of 1.4 billion, presents immense potential for emerging economies like South Africa.

Trade and investment links between South Africa and China have flourished, with significant Chinese investments in South African projects and infrastructure. These investments have not only created local employment opportunities but also fostered economic growth and development. Furthermore, the BRICS alliance provides South Africa with an opportunity to diversify its investment portfolio and explore new markets, reducing its dependence on traditional trade partners.

South Africa’s Trade Relations with the West

While the BRICS alliance has brought significant economic benefits to South Africa, the country’s trade relations with the West, particularly the United States and the European Union, remain crucial. South Africa is the largest trading partner of both the US and the EU in Africa, with the US totalling about R289 billion and the EU totalling a trade of R699 billion. The US and EU markets continue to be economically significant for South Africa, providing valuable export opportunities and foreign investment.

It is important for South Africa to maintain its relationships with the West while remaining a member of the BRICS alliance. Balancing its interests with both sides is essential to demonstrate that its BRICS membership does not make it anti-West. France and the UK have recently recognized the need to strike a balance between their relationships with China and their traditional alliance with the US. Similarly, South Africa must navigate Western anxieties and foster understanding of its economic adaptability and growth potential within the BRICS alliance.

Sources: EWN The Conversation


About the Author

Leave a Reply

Your email address will not be published. Required fields are marked *

You may also like these