South Africa

ECONOMIC DEVELOPMENT OP-ED

The truth? It’s been downhill for South Africa since we joined BRICS

The truth? It’s been downhill for South Africa since we joined BRICS
South Africa's President Cyril Ramaphosa speaks during the BRICS Summit on 22 August 2023 in Johannesburg, South Africa. (Photo: Per-Anders Pettersson / Getty Images)

It doesn’t help if you desperately need to reform corrupt old state enterprises into modern, competitive entities to while away the time with countries that hold old-world statist views on economic development.

Conventional wisdom – and there’s a lot of it going around since the BRICS Summit in Sandton a couple of weeks ago – has it that South Africa benefits tremendously from its association with BRICS.

It is apparently self-evidently true that membership of this body unlocks economic growth and opens the doors for economic development. So much so that it is worth shelving differences over trivia like democracy and human rights to join the rush for economic benefits.

President Cyril Ramaphosa, addressing the nation, laid out the benefits associated with BRICS membership as follows:

“As we have said before, our international work cannot be separated from our efforts to end poverty, to create jobs and to reduce inequality in South Africa.

“Through stronger investment and trade relations with other countries, we are able to grow our economy, create more opportunities for new businesses and reduce unemployment.”

These are all wonderful-sounding words. But has South Africa actually benefitted from joining BRICS or is this all just showmanship and virtue signalling? Does it justify the financial cost of hosting the summit and the opportunity cost of alienating nations that share South African values?

We don’t have to guess. South Africa joined BRICS in 2010, so we have a 13-year track record to look back on. The numbers don’t lie and, unfortunately, they tell a very different story to that being peddled by Ramaphosa.

By almost every metric, South Africa has gone downhill fast since it joined BRICS in 2010. Our GDP – the prime measure of national output – has actually declined from $417.4-billion in 2010 to $406.9-billion in 2023. And this is without adjusting for inflation.

GDP per capita – the average portion of GDP for each South African – has declined even more precipitously from $8,737 in 2010 to $6,795 in 2023. 

The value of the currency has deteriorated from R7.90 to the dollar in 2010 to R19.22 at the last measure.

Debt has spiralled out of control, leading to what many are describing as a debt crisis. It stood at 31.2% of GDP in 2010 and is now 72.3% of GDP and rising fast.

Unemployment has skyrocketed from 24% in 2010 to 32.6% in 2023.

 

You might think that this is the way of the world and the past 13 years have been bad for everyone. You would be wrong. 

Countries which today have a similar GDP to South Africa in 2023 have been on a very different and much more potent growth trajectory. Let’s look at our neighbours in the global GDP rankings, for example. The Philippines ($404-billion GDP today) has risen from $176-billion in 2010. Malaysia ($406-billion GDP today) has risen from $202-billion in 2010.

Let that sink in. Both these countries, which share violent colonial histories, and which were substantially poorer than South Africa in 2010, have more than doubled their GDP while SA’s has gone down over the same period.

They appear to have managed economic growth and lifted millions of their citizens out of poverty just fine without the help of BRICS.

You might argue that South Africa’s membership of BRICS is not the proximate cause of its rapid economic decline. There may be some merit in that. Other countries have not suffered the grotesque corruption of the state capture years or the disembowelment of their public service through cadre deployment. 

But BRICS doesn’t help. It doesn’t help when you are fighting a corruption plague to make friends with countries that suffer from endemic corruption which is ingrained in their body politic. Adding the likes of Argentina, Iran and Egypt to BRICS does not exactly send a signal that BRICS is about a war on graft.

It doesn’t help to shelve your country’s national identity, which is deeply tied to human rights and democracy, so that you don’t offend your new friends who don’t share these values. It’s easy if you label these values “Western” and if you ignore the inconvenient truth that nearly three-quarters of Africans across the continent prefer democracy to other forms of government.

It doesn’t help if you desperately need to reform corrupt old state enterprises into modern, competitive entities to while away the time with countries that hold old-world statist views on economic development.

While the ANC government likes the idea of an externalist development paradigm – that the world must change before we can – this is more of a convenient excuse than a development fact. After all its BRICS partners, notably China but also Brazil and India, have done rather well out of the world just as it is. If anything, while there is merit always in shaking things up, the fragmentation of the global economy and rules-based order by the likes of BRICS could be disastrous for growth and prosperity, especially for developing countries attempting to keep ahead of the curve of demography and citizen expectations. 

While it does not harm to host BRICS summits with hotels filling up, reduced load shedding (as it turns out, temporarily) and the streets secured and cleaned up, we should not kid ourselves that BRICS is the panacea we desperately need to bring about economic growth and development. The fact that it took the BRICS Summit to keep the lights on, literally and figuratively, is, if nothing else, an indication of the extent to which the government listens to its domestic audience. 

Our problems will not be solved by diplomatic posturing and the mirage that we are suddenly important on the world stage. We will only progress when we understand our unique problems and deal with them. It’s time to stop the posturing and make the tough decisions that lead to economic growth. DM

Ray Hartley and Greg Mills are with The Brenthurst Foundation

Gallery

Comments - Please in order to comment.

  • jcdville stormers says:

    We’ve been downhill since Zuma started the rot

    • Pieter van de Venter says:

      I disagree – The rot started in 1994. If we could find the minutes of the ANC smoke filled meetings before 1994, I am sure we will find that the large scale distribution of SA wealth was discussed before the 1994 election.

      Even if it is not acceptable to state the overwhelming argument to keep the ANC/SACP out of power, is exactly what was predicted by PW Botha and cabinets, Dr Albert Hertzogh and ene Eugene Terblance.

  • Ben Harper says:

    The anc are in it for the handouts and to steal what the can from corrupt deals, the russian nuclear deal was the first indicator it was all a farce

  • Daniel Cohen says:

    Cogent comment, as always, from Mills and Hartley. Anyone in National Government or traditional ANC voters listening?

  • cathy.wardle says:

    Succinct and to the point. Brics has done absolutely nothing for SA but ostracize the country from its true trading partners

  • Cornay Bester says:

    BRICS+ where sovereignty is king and where an Apartheid South Africa would’ve fitted right in.

  • rswedlake says:

    The ANC and ‘hard decisions’ is an oxymoron.

  • William Kelly says:

    The people have spoken. This is what they want. And they will get it. Good and hard.

  • Jeff Robinson says:

    Excellent article and spot on.

  • Peter Oosthuizen says:

    Don’t worry we’ll get a game farm!!

  • A.K.A. Fred says:

    Excellent observations by Ray & Greg. Those GDP numbers between 2010 & 2023 are staggering. Others have doubled while we have reduced (even before inflation). However, the ANC cabal running RSA, and their supporters, are too thick skinned and too dim to take stock of the situation. The World Population Review (Average IQ by Country info) may give a hint as to why this may be the case. Phillipines and Malaysia have mid 80 average IQ’s, South Africa has below 70 average IQ’s. The problem is South Africa is not selecting its leaders carefully enough to install a government with vision, insight and understanding of how to grow an economy. Populist support and revolutionary agendas are not going to do it. We have one last chance to correct this in the 2024 polls. If we don’t, the damage from another cycle of inept government will be irreversible.

  • Hari Seldon says:

    Excellent analysis but unfortunately it wont be read or understood by the 50 to 60% of the population that vote ANC / EFF. And these are the citizens that need to internalise the facts that the ANC has been a rolling disaster for South Africa for more than 13 years now and its time for change. Would be nice to put these facts on massive billboards across every township and rural village in South Africa. With a positive message at the end like “Vote for an Opposition Party in 2024 to Create a Successful Country”.

    • Hermann Funk says:

      I am getting sick and tired having to read or listen to blaming those who don’t read or understand articles like this. How many conversation did the complainer conduct to understand their reasons and eventually make them understand that the situation we are in is because of them either not voting or voting for the wrong party?

    • Impie Mann says:

      Agreed. Opposition parties need to find a simple, graphic way to illustrate these alarming statistics of South Africa’s economic decline to hammer home the facts to potential voters, otherwise we are truly fawked!

  • Max Ozinsky says:

    This is the same as saying that Nato started loosing the war in Afghanistan after Greg Mills was appointed adviser to the Nato commander.

  • Brian Doyle says:

    An excellent analysis of where our country is now. It is a pity that this cannot be highlighted in such a way that the message gets taken to the masses who support the corrupt and incompetent ANC. If we cannot get these facts widely published or highlighted on all media, the lies that the President and ANC will spew forth on the election trail will result in many still voting for the ANC

  • D'Esprit Dan says:

    The ANC argues that being in the club gives us great access to these great, emerging powers and gives us excellent leverage and the opportunity to grow new markets. I’d like the ANC (and Ramaphosa specifically) the following:
    1) How did grovelling embarrassingly in front of Xi solve our rail crisis? It’s estimated to be costing us R1bn a day in lost opportunity because a Chinese, state owned, company is holding us over a barrel because they don’t want to pay tax in South Africa? Where’s your damned leverage there, Cyril?
    2) Did batting his eyelids at Modi (when he eventually got off the plane) secure South Africa adequate, reasonably priced rice after the Indian government banned its export?
    3) Has Russia, with all of our support since the brutal invasion of Ukraine, returned the quid pro quo with cut-price oil or wheat? Basic commodities that the poorest South Africans are being plunged further into poverty by because it now costs an extra R2,74 for a litre of diesel.
    4) Have South African engineering companies been invited to build roads, railways, ports and airports in Brazil as a way of offsetting the ANC-induced (artificial) surplus of capacity in South Africa?

    Just like the brazen lies about the US$100bn in investment into SA that Ramaphosa trots out every year, you can point to almost every development metric in our country and see rapid decline since we joined BRICS. Not that the ANC cares, one iota.

  • Wayne Gabb says:

    Article is spot on showing BRICS is a big spin bubble for the sheep to gloat on.

  • Rae Earl says:

    What hope is there when Ramaphosa is only one of 3 SADC leaders to attend the Mnangagwa inauguration? Along with his vomitorious SG Fikile Mbalula and the ever servile Naledi Pandor, Ramaphosa saluted Mnangagwa’s ‘harmonised’ election victory. What utter bullshit. It was another election theft fest by ZANU-PF and Ramaphosa’s presence simply underlines why we are in bed with BRICS instead of maintaining and building up our trade with economic giants like Germany, the UK, USA, Italy and other countries in the West. Ramaphosa is a born loser and arse-kisser of leaders who are of no use to South Africa. We can’t afford to see him in power again next year.

  • A.K.A. Fred says:

    Excellent observations by Ray & Greg. Those GDP numbers between 2010 & 2023 are staggering. Others have doubled while we have reduced (even before inflation). However, the ANC cabal running RSA, and their supporters, are too thick skinned and too dim to take stock of the situation. The World Population Review (Average IQ by Country info) may give a hint as to why this may be the case. Phillipines and Malaysia have mid 80 average IQ’s, South Africa has below 70 average IQ’s. The problem is South Africa is not selecting its leaders carefully enough to install a government with vision, insight and understanding of how to grow an economy. Populist support and revolutionary agendas are not going to do it. We have one last chance to correct this in the 2024 polls. If we don’t, the damage from another cycle of inept government will be irreversible.

  • Commenting is fruitless as only those on this forum will read them. To not comment is like burying your head in the sand. The ideology of BRICS sounds great in essence it’s farcical and akin to desperation on the part of our corrupt Government. What are we as citizens going to do about the diabolical state South Africa is in ? People are starving ! People don’t have jobs ! Loadshedding is affecting productivity! The facts are there. There are no Dreamers here saying – things will improve. How ?

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.