In the early part of December last year, South Africa was formally invited to join the BRIC group of nations. Brazil, Russia, India and China were recognized in a Goldman Sachs report in 2001, “Dreaming with BRICs: The path to 2050”, as the most important emerging economies in the world today and the ones, which possibly overtake many of the developed economies by 2050. South Africa’s introduction to this elite group would change BRIC to BRICS as the new acronym.
Some of the initial reaction to South Africa’s invitation was that the country didn’t deserve a place among the leading tier of emerging economies. Those criticisms were mostly aimed at South Africa’s small growth rate when compared with the BRIC members and South Africa’s small population and potential market capacity. South Africa’s recent admission though to BRIC, would not only benefit both sides, but boost the African continent’s voice across the world, analysts say.
TradeInvestSA talked to CEO of Frontier Advisory (Pty) Ltd – a capital advisory, strategy and research company which deals with emerging markets, Dr Martyn Davies, about South Africa’s inclusion and contrary to some of the criticisms, he is positive about the new development. BRIC’s acceptance of South Africa as a full member was a mutually beneficial and strategic choice, and would make the organization’s mechanism better representative of emerging economies, analysts and officials said.
Davies was not surprised by South Africa’s invitation to join the BRIC group. President Zuma made a very deliberate effort to lobby members of the group by embarking on state visits to all four countries during 2010. Davies also points out that the BRIC members have identified the importance of having a partner in Africa, where all four countries have and continue to invest a lot of time and resources. Due to the global financial crisis, South Africa’s economic growth has slowed down over the past two years. Although the country’s financial minister Pravin Gordhan recently said South Africa’s entry into BRIC would bring the country a better environment to boost economy, experience in realizing rapid economic increase, more advanced knowledge and technology, and trade volume expansion.
Davies also notes that the size of one’s market is not necessarily a requirement of economic success and points to the Asian Tigers as example of countries that successfully developed and grew their economies at a rapid rate. Meantime, Martin Davis, a well-known South African expert on China-Africa ties, said that the entry would promote BRICS’ international prominence and its voice in international affairs. South Africa’s Business Day newspaper also said the participation would be conducive to the rise of South Africa, a country with a population of 49 million, in the international arena, and help boost the political and economic ties between South Africa and the other four BRICS countries. Analysts said the entry of South Africa, Africa’s biggest economy, would also lift up Africa’s voice in the world community.