The Geopolitics and Economics of BRICS’ Resource and Market Access in Southern Africa: Aiding Development or Creating Dependency?

Abstract

What has been the impact of BRICS (Brazil, Russia, India, China, South Africa) on southern African states’ development policy, practice and outcomes? Have they allowed for the creation of development space and, potentially, the emergence of developmental states, or has their influence reinforced the extractive, neo-liberal nature of most southern African economies? Drawing on key informant interviews with policy analysts and shapers in South Africa, trade data and secondary sources, this article explores the BRICS countries’ relations with, and strategies towards, the region, with a specific focus on the impact of China and South Africa. It explores the nature and influence of BRICS countries’ engagement in the region and the potential for policy space opened up by this.

Keywords:

• South Africa
• BRICS
• globalisation
• China
• dependency
• development

Acknowledgements

Thanks to the University of Johannesburg for funding this research, to the research respondents, and to Chris and Jayne Rogerson, for their hospitality. Thanks also to John Morrissey, Michelle D’Arcy, Ian Taylor, Francis Owusu, Lyn Schumaker, Andrew Brooks and the journal referees for their comments, and the participants at the Journal of Southern African Studies Conference: ‘Southern Africa Beyond the West’, Livingstone, Zambia, August 2015. Any errors of fact or interpretation are mine.

Notes

¹ Both Brazil and Russia are, at the time of writing, experiencing severe recessions, and hence their economic rise is ‘on hold’, although Russia’s geopolitical influence arguably continues to grow, with Forbes magazine ranking Vladimir Putin as the world’s most powerful person in 2015 and 2016. It is also important to note that there are different types of actors from China, for example, operating in southern Africa, with different modalities and objectives. See G. Mohan, B. Lampert, M. Tan-Mullins and D. Chang, Chinese Migrants and Africa’s Development: New Imperialists or Agents of Change? (London, Zed Books, 2014).

² United Nations Conference on Trade and Development, South–South Integration is Key to Rebalancing the Global Economy, Policy Brief (Geneva, UNCTAD, 2011), p. 2.

³ Although South Africa has long been influential in the wider region.

⁴ Attempts were made to interview Chinese diplomats, but these were not successful. Given Russia’s relatively small ‘footprint’ in the region, the interviews focused on diplomats from Brazil, India and South Africa, in addition to knowledgeable academics.These were semi-structured interviews, where a short list of initial questions were developed. All interviews for this article were conducted by me, the author, and I retain notes from each for verification.

⁵ V. Shubin, The Hot Cold War: The USSR in Southern Africa (London, Pluto, 2008).

⁶ D. Geldenhuys, ‘The Comprehensive Strategic Partnership Between South Africa and Russia’, Strategic Review for Southern Africa, 37, 1 (nd), pp. 118–45, available at http://www.up.ac.za/media/shared/85/Strategic%20Review/Vol%2037%20(2)/geldenhuys-pp118-145.zp74595.pdf, retrieved 3 December 2016.

⁷ K. Ighobor, ‘China in the Heart of Africa’, Africa Renewal, January 2013, available at http://www.un.org/africarenewal/magazine/january-2013/china-heart-africa, retrieved 19 January 2017.

⁸ International Monetary Fund, ‘Direction of Trade Statistics’ (2016), available via http://data.imf.org/?sk=9D6028D4-F14A-464C-A2F2-59B2CD424B85&ss=1409151240976. The exceptions are Zambia (Switzerland), Seychelles (France), Malawi and Mauritius (India), and Botswana, Lesotho, Namibia and Swaziland (BLNS) (United States). There is controversy about exports of Zambian copper to Switzerland, with some suggesting that much of this ends up in China, and that there is transfer mispricing taking place (Zambia Institute for Policy Research and Analysis, ‘Zambia: What Happens to Zambia’s Copper Exports?’, Times of Zambia, 13 May 2015, available at http://allafrica.com/stories/201505131309.html, retrieved 3 December 2016). If Zambia received the same price for its copper exports as Switzerland, it has been estimated that its gross domestic product (GDP) would almost double (H. Osborne, ‘Stealing Africa: How Copper Industry Leaves Zambia in Poverty’, International Business Times, 26 November 2012, available at http://www.ibtimes.co.uk/stealing-africa-mining-zambia-poverty-glencore-mopani-408563, retrieved 4 December 2016.

⁹ Although only by 5.7 per cent, according to IMF data for 2014, when Hong Kong and Macau are included in the statistics for China.

¹⁰ This encompasses Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland, but not other members of SADC.

¹¹ P. Carmody, The Rise of the BRICS in Africa: The Geopolitics of South–South Relations (London, Zed Books, 2013).

¹² Calculated from International Monetary Fund (IMF), ‘Direction of Trade Statistics’ (2016), available via http://data.imf.org/?sk=9D6028D4-F14A-464C-A2F2-59B2CD424B85&ss=1409151240976, retrieved 8 December 2016.

¹³ H. Yeung, Strategic Coupling: East Asian Industrial Transformation in the New Global Economy (Ithaca and London, Cornell University Press, 2016).

¹⁴ M. Nkoana-Mashabane, ‘South Africa’s Chairpersonship of BRICS – from Durban to Fortaleza’, speech at the Institute for Global Dialogue, reported by Tralac, 7 August 2014, available at http://www.tralac.org/news/article/6009-south-africa-s-chairpersonship-of-brics-from-durban-to-fortaleza.html, retrieved 9 September 2016.

¹⁵ Interview with Randir Jaiswal, Johannesburg, 11 August 2014.

¹⁶ Nkoana-Mashabane, ‘South Africa’s Chairpersonship’.

¹⁷ Interview with Pedro Luiz, Pretoria/Tshwane, 14 August 2014.

¹⁸ While Angola is sometimes not considered to be part of the region, it is part of SADC, so is discussed here. Chinese engagement in lusophone southern Africa has, in part, been spearheaded by a company called Geocapital, which is headquartered in Macau (C. Alves,‘Chinese Banking in Mozambique: The Macanese Connection’, in C. Alden and S. Chichava (eds), China and Mozambique: From Comrades to Capitalists (Auckland Park, Fanele, 2014).

¹⁹ Y. Linhua, ‘South Africa: Joining the BRICS and Benefit to Africa’ (unpublished paper, Nanfei, n.d.) cited in W. Yong, ‘South Africa’s Role in the BRICS and the G-20: China’s View’, South African Institute of International Affairs, occasional paper 127 (2012), p. 7.

²⁰ Yong, ‘South Africa’s Role … China’s View’.

²¹ P. Gordhan, ‘Budget Speech’, 27 February 2013, available at http://www.treasury.gov.za/documents/national%20budget/2013/speech/speech.pdf, retrieved 9 December 2016.

²² Interview with Christopher Wood and Elizabeth Sidaropoulos, Johannesburg, 13 August 2014.

²³ Interview with Christopher Wood, Johannesburg, 13 August 2014.

²⁴ C. Alden and M. Schoeman, ‘South Africa in the Company of Giants: The Search for Leadership in Transforming Global Order’, International Affairs, 89, 1 (2013), p. 112

²⁵ S. Allison, ‘SA on North Korea: Realpolitik Trumps Human Rights, Again and Again’, Daily Maverick, 19 November 2014, available at http://www.dailymaverick.co.za/article/2014-11-19-sa-on-north-korea-realpolitik-trumps-human-rights-again-and-again/#.VoqILPmLSUk, retrieved 3 December 2016. While there are tensions between North Korea and China, particularly over the former’s nuclear programme, they are close allies.

²⁶ Yong, ‘South Africa’s Role … China’s View’.

²⁷ Quoted in Alden and Schoeman, ‘South Africa in the Company of Giants’, p. 116.

²⁸ Interview with Dr Sookal, South African Department of International Relations and Cooperation, Pretoria/Tshwane, 13 August 2014.

²⁹ I. Taylor,‘South African “Imperialism” in a Region Lacking Regionalism: A Critique’, Third World Quarterly, 12, 7 (2011), pp. 1233–53.

³⁰ R. Davies and I. Taylor, ‘“Africa Rising” and the Rising Powers’, in J. Gaskarth (ed.), Rising Powers, Global Governance and Global Ethics (London, Routledge, 2015), p. 153.

³¹ Calculated from IMF, ‘Direction of Trade Statistics’ (2016).

³² With exports accounting for 59 per cent of the value of imports from China.

³³ J-P. Rodrigue, ‘Maritime Transportation Rates for a 40 Foot Container between Selected Ports, 2010’, The Geography of Transport Systems, available at https://people.hofstra.edu/geotrans/eng/ch7en/conc7en/map_container_shipping_rates.html, retrieved 2 December 2016.

³⁴ F. Ilheu, ‘The Role of China in the Portuguese Speaking African Countries: The Case of Mozambique’, part 2, Centre for African and Development Studies, Technical University of Lisbon, 2010, cited in M. Bunkenborg, ‘Ethnographic Encounters with the Chinese in Mozambique’, in C. Alden and S. Chichava (eds),China and Mozambique: From Comrades to Capitalists (Auckland Park, Fanele, 2014).

³⁵ See Environmental Investigation Agency, Appetite for Destruction: China’s Trade in Illegal Timber (London, EIA, 2012), available at https://eia-international.org/wp-content/uploads/EIA-Appetite-for-Destruction-lo-res.pdf, retrieved 19 January 2017.

³⁶ T. Fuller, ‘China’s Trade Unbalances Shipping’, New York Times, 29 January 2006, available at http://www.nytimes.com/2006/01/29/business/worldbusiness/china-trade-unbalances-shipping.html, retrieved 3 December 2016.

³⁷ Interview with Dr Sookal.

³⁸ A. Brandenburger and B. Nalebuff, Co-opetition (New York, Doubleday, 1997).

³⁹ D. Harvey, A Brief History of Neoliberalism (Oxford and New York, Oxford University Press, 2005).

⁴⁰ M. Bevir and J. Gaskarth, ‘Global Governance and the BRICS: Ideas, Actors and Governance Practices’, in J. Gaskarth (ed.), Rising Powers, Global Governance and Ethics (London, Routledge, 2015).

⁴¹ I am using ‘China’ here to refer to the Chinese government and state-owned corporations.

⁴² C. Alden, ‘China and Africa: From Engagement to Partnership’, in M. Power and A.C. Alves (eds), China and Angola: A Marriage of Convenience (Cape Town, Dakar, Nairobi and Oxford, Pambazuka, 2012).

⁴³ D. Brautigam, The Dragon’s Gift: The Real Story of China in Africa (Oxford and New York, Oxford University Press, 2009).

⁴⁴ There has thus been a re-scaling of conditionality, rather than its abolition.

⁴⁵ H. French, China’s Second Continent: How a Million Migrants are Building a New Empire in Africa (New York, Knopf, 2013).

⁴⁶ D. Woodley,Globalization and Capitalist Geopolitics: Sovereignty and State Power in a Multipolar World (London and New York, Routledge, 2015).

⁴⁷ Bevir and Gaskarth, ‘Global Governance and the BRICS’, p. 80.

⁴⁸ P. Carmody, The New Scramble for Africa, second edition (Cambridge, Polity, 2016).

⁴⁹ S. Chari, ‘African Extraction, Indian Ocean Critique’, South Atlantic Quarterly, 114, 1 (2015), pp. 83–100.

⁵⁰ Such as G.Mohan and B. Lampert, ‘Negotiating China: Reinserting African Agency into China–Africa Relations’, African Affairs,112, 446 (2013), pp. 92–110.

⁵¹ P. Carmody and P. Kragelund, ‘Who Is in Charge? State Power and Agency in Sino-African Relations’, Cornell International Law Journal, 49, 1 (2016), pp. 1–24.

⁵² Interview with Christopher Wood. For a critique of the New Development Bank, see P. Bond, ‘BRICS Banking and the Debate Over Sub-Imperialism’, Third World Quarterly, 37, 4 (2016), pp. 611–29.

⁵³ S. Adem, ‘The Paradox of China’s Policy in Africa’, African and Asian Studies, 9, 3 (2010), p. 340.

⁵⁴ Forbes magazine, ‘The World’s Biggest Companies, 2016’, available at http://www.forbes.com/global2000/list/, retrieved 3 December 2016.

⁵⁵ R. Cox, Production, Power and World Order: Social Forces in the Making of History (New York and Chichester, Columbia University Press, 1987).

⁵⁶ J-F. Bayart, ‘Africa in the World: A History of Extraversion’, African Affairs, 99, 395 (2000), pp. 217–67.

⁵⁷ Y. Tandon, Trade Is War: The West’s War Against the World (New York, OR books, 2015).

⁵⁸ P. de Wet, ‘SA and China: A Love Founded on State Control’, Mail and Guardian, 21 August 2015, available at http://mg.co.za/article/2015-08-22-sa-and-china-a-love-founded-on-state-control, retrieved 4 December 2016.

⁵⁹ Telephone interview with Dr Jaya Josie, BRICS Programme at Human Sciences Research Council, South Africa, 8 August 2014.

⁶⁰ Interview with Christopher Wood.

⁶¹ While Chinese policy makers issue pronouncements that they will never accept restrictions on China’s external trade, China put in place in 2006 temporary ‘voluntary export restraints’ on textile and clothing exports to South Africa, demonstrating South Africa’s strategic importance to China.

⁶² Yong, ‘South Africa’s Role … China’s View’.

⁶³ E. Sheppard, The Limits to Globalization: Disruptive Geographies of Capitalist Development (Oxford and New York, Oxford University Press, 2016).

⁶⁴ Quoted in de Wet, ‘SA and China’. However, in response to sharply falling steel prices, the South African government did impose a 10 per cent duty on steel imports; see, P. Bond, ‘China’s Path into Africa Blocked by Growing Potholes’, TeleSUR, 13 December 2015, available at http://www.telesurtv.net/english/opinion/Chinas-Path-into-Africa-Blocked-20151213-0004.html, retrieved 6 October 2016.

⁶⁵ N. Wenzel, O. Graefe and B. Freund, ‘Competition and Cooperation: Can South African Business Create Synergies from BRIC+S in Africa’, African Geographical Review, 32, 1 (2013), p. 15.

⁶⁶ G. Hart, Rethinking the South African Crisis: Nationalism, Populism, Hegemony (Athens and London, University of Georgia Press, 2014).

⁶⁷ B. Fine and Z. Rustomjee, The Political Economy of South Africa: From Minerals–Energy Complex to Industrialisation (London, Hurst, 1996).

⁶⁸ The infamous Marikana massacres in 2012 took place after a wildcat strike at one of Lonmin’s mines in South Africa.

⁶⁹ G. Davis, ‘China SA’s Biggest Trade Partner – Cyril’, iafrica, 6 November 2015, available at http://business.iafrica.com/news/1011411.html, retrieved 5 November 2016.

⁷⁰ Hart, Rethinking the South African Crisis.

⁷¹ N. Obiarah, ‘Who is Afraid of China in Africa’, in F. Manji and S. Marks (eds), African Perspectives on China in Africa (Cape Town, Nairobi and Oxford, Fahamu, 2007), cited in M. Power, G. Mohan and M. Tan-Mullins, China’s Resource Diplomacy in Africa: Powering Development? (Basingstoke, Palgrave Macmillan, 2012), p.181.

⁷² E. Olander and C. van Staden, ‘South Africa’s Inexplicable Love Affair with China’, The World Post (n.d.), available at http://www.huffingtonpost.com/eric-olander/south-africa-love-affair-china_b_8107474.html, retrieved 12 December 2016.

⁷³ J. Njal, ‘The “Chinese Connection” in Mozambique’s Hosting the 2011 All Africa Games’, China Monitor, 72 (2012), cited in C. Alden, S. Chichava and P. Roque, ‘China in Mozambique: Caution, Compromise and Collaboration’, in C. Alden and S. Chichava (eds), China and Mozambique: From Comrades to Capitalists (Auckland Park, Fanele, 2014).

⁷⁴ This is a somewhat relative concept for Chinese companies, as the CCP requires a representative in every company with more than 50 employees (R. Abrami, W. Kirby and F. McFarlan, ‘Why China Can’t Innovate’, Harvard Business Review, 92, 3 (2014), pp. 107–11.

⁷⁵ S. Chichava and C. Alden,‘Reflections on a Changing Relationship’, in Alden and Chichava (eds), China and Mozambique, Conclusion.

⁷⁶ AidData, ‘China Contributes Political and Equipment to SWAPO Party’, available via http://china.aiddata.org/projects/1228, retrieved 9 December 2016. I am grateful to Gregor Dobler for this source.

⁷⁷ L. Corkin, Uncovering African Agency: Angola’s Management of China’s Credit Lines (Farnham and Burlington, Ashgate, 2013), p. 41.

⁷⁸ Indeed the BRICS grouping itself is a form of globalisation that is state-instigated and led.

⁷⁹ South African Department of Trade and Industry, ‘Industrial Policy Action Plan Economic Sectors and Employment Cluster IPAP 2014/15–2016/17’ (Pretoria, DTI, 2014), available at http://www.gov.za/sites/www.gov.za/files/IPAP2014.pdf, retrieved 6 December 2016.

⁸⁰ Interview with Pedro Luiz.

⁸¹ Ibid.

⁸² C. Hicks, Africa’s New Oil: Power, Pipelines and Future Fortunes (London, Zed Books, 2015); R. Soares de Oliveira, Magnificent and Beggar Land: Angola Since the Civil War (London, Hurst, 2015).

⁸³ There is a debate as to what constitutes de-industrialisation. It is defined here as a falling share of manufacturing in overall economic output.

⁸⁴ P. Kragelund, ‘The Making of Local Content Policies in Zambia’s Copper Sector: Institutional Impediments to Resource-Led Development, Resources Policy, 51 (2017), pp. 57–66.

⁸⁵ Alden and Schoeman, ‘South Africa in the Company of Giants’.

⁸⁶ P. Kragelund, ‘“Donors Go Home”: Non-Traditional State Actors and the Creation of Development Space in Zambia’, Third World Quarterly, 35,1 (2014), pp. 145–62.

⁸⁷ J. Fessehaie and M. Morris, ‘Value Chain Dynamics of Chinese Copper Mining in Zambia: Enclave or Linkage Development?’, European Journal of Development Research, 25, 4 (2013), pp. 537–56; P. Kragelund and P. Carmody, ‘BRICS’ Impacts on Local Economic Development in the Global South: The Case of a Tourism Town and Mining Provinces in Zambia’, Area Development and Policy, 1, 2 (2016), pp. 218–37.

⁸⁸ This is a term coined by James Sidaway, in conversation; gratefully acknowledged and used with permission.

⁸⁹ P. Carmody and F. Owusu, ‘Neoliberalism, Urbanization and Change in Africa: The Political Economy of Heterotopias’, Journal of African Development, 18, 1 (2016), pp. 61–73.

⁹⁰ Power, Mohan and Tan-Mullins, China’s Resource Diplomacy in Africa.

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⁹² A. Ong, ‘Graduated Sovereignty in South-East Asia’,Theory, Culture and Society, 17, 4 (2000), pp. 55–75.

⁹³ S. Michel, M. Beuret, P. Woods and R. Valley,China Safari: On the Trail of China’s Expansion in Africa (New York, Nation Books,2009).

⁹⁴ Quoted in Southern Weekly (2010), cited in D. Brautigam and X. Tang, ‘African Shenzhen: China’s Special Economic Zones in Africa’, Journal of Modern African Studies, 49, 1 (2011), pp. 27–54.

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⁹⁶ C.K. Lee, ‘The Spectre of Global China’, New Left Review, 89 (2014), p. 65.

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⁹⁸ Lee, ‘The Spectre of Global China’.

⁹⁹ Centre for Trade Policy and Development, Action Aid Zambia et al., ‘Joint Civil Society Statement on the State of Economic, Social and Political Governance in Zambia’, 6 August 2015, p. 1, available at http://www.actionaid.org/zambia/news/joint-civil-society-summary-press-statement-state-economic-social-and-political-governan, retrieved 30 May 2017.

¹⁰⁰ C. Jamasmie,‘It’s Official: Zambia Scales Back Mining Royalties to 9%’, mining.com, 20 April 2015, available at http://www.mining.com/its-official-zambia-scales-back-mining-royalties-to-9/, retrieved 12 December 2016; Kragelund, ‘The Making of Local Content Policies’.

¹⁰¹ R. Jenkins and L. Edwards, ‘Is China “Crowding Out” South African Exports of Manufactures?’, European Journal of Development Research, 25, 5 (2015), pp. 903–20.

¹⁰² Interview with Shoprite manager, Livingstone, Zambia, 12 August 2015.

¹⁰³ F. Söderbaum, The Political Economy of Regionalism: The Case of Southern Africa (Basingstoke and New York, Palgrave MacMillan, 2004).

¹⁰⁴ Calculated from Zambia Data Portal, ‘Textile, Clothing and Leather 1980–2015’, available via http://zambia.africadata.org/en/DataAnalysis/, retrieved 8 October 2015. Some manufacturing sub-sectors – particularly those based on natural resources – have seen growth.

¹⁰⁵ C.K. Lee, ‘Raw Encounters: Chinese Managers, African Workers and the Politics of Casualization in Africa’s Chinese Enclaves’, The China Quarterly, 199 (2009), p. 666.

¹⁰⁶ Lee, ‘The Spectre of Global China’.

¹⁰⁷ E. Mawdsley, From Recipients to Donors: Emerging Powers and the Changing Development Landscape (London and New York, Zed Books, 2012).

¹⁰⁸ Alden and Schoeman, ‘South Africa in the Company of Giants’, p. 119.

¹⁰⁹ Quoted in I. Taylor, Africa Rising? BRICS – Diversifying Dependency (Woodbridge, James Currey, 2014), pp. 17–18.

¹¹⁰ C. Alden, China in Africa: Partner, Competitor or Hegemon?(London, Zed Books, 2007).

¹¹¹ P. Carmody and I. Taylor, ‘Flexigemony and Force in China’s Resource Diplomacy in Africa’, Geopolitics, 15, 3 (2010), pp. 495–515.

¹¹² I. Taylor, Global Governance and Transnationalizing Capitalist Hegemony: The Myth of the ‘Emerging Powers’ (London, Routledge, 2017).

¹¹³ P. Kragelund, ‘Towards Convergence and Cooperation in the Global Development Finance Regime: Closing Africa’s Policy Space?’, Cambridge Review of International Affairs, 28, 2 (2015), pp. 246–62.

¹¹⁴ D. Sanchez, ‘Mozambique’s Controversial ProSavana Project Moves Toward Approval’, AFK Insider, 20 May 2015, available at http://afkinsider.com/96652/mozambiques-controversial-prosavana-project-moves-toward-approval/#sthash.YtoiyLeV.dpuf, retrieved 12 December 2016.

¹¹⁵ P. Bond, ‘Which Way Forward for the BRICS in Africa, a Year after the Durban Summit?’ Pambazuka News, 9 April 2014, available at http://www.pambazuka.net/en/category.php/features/91297, retrieved 12 December 2016.

¹¹⁶ J-P. Rodrigue, C. Comtois and B. Slack, The Geography of Transport Systems, fourth edition (Abingdon, Routledge, 2017).

¹¹⁷ Bond, ‘Which Way Forward …?’

¹¹⁸ K. Moghalu, Emerging Africa: How the Global Economy’s “Last Frontier” Can Prosper and Matter (London, Penguin, 2014). Some of this may be from formerly South African companies, such as Anglo-American, which have moved their headquarters to London. I am grateful to Victor Shubin for this point.

¹¹⁹ X. Li, ‘Conceptualizing the Nexus of “Interdependent Hegemony” Between the Existing and the Emerging World Orders’, Fudan Journal of the Humanities and Social Sciences, 7, 3 (2014), pp. 343–62.