South Africa may not match the growth rates of the other four economies, but to help further diversity and trade within the bloc, it is all set to be a member.
Brazil, Russia, India and China (BRICs) have decided to appoint South Africa as an observer in their next annual summit to be held in April. The path has, therefore, been cleared for the inclusion of S Africa as a member of the grouping.
South Africa has been lobbying for its membership for sometime, and the recent outcome has been welcomed in the country.
The media has observed that South Africa was now being recognised as a significant developing country in its own right and as a gateway to the continent of Africa.
The change in the acronym will be limited to the enlargement of the small ‘s', whose purpose in the original was not quite clear in the first place. The consonant will now fit more integrally into the acronym, with India continuing to provide the sole connecting vowel.
More importantly, in terms of geography the continent of Africa will find its representation in the grouping. With South Africa already in the G20 and in climate negotiations in the BASIC, its induction would significantly enlarge the space for multilateral dialogue.
NOT FITTING THE BILL
The creator of the concept of BRICs, Goldman Sachs, had clearly excluded South Africa. BRICs were identified as a distinct category of nations that would become important by virtue of their being the four largest emerging economies with high rates of growth. South Africa did not even figure in the list of the 20 largest economies at the time.
Later, in 2003, Goldman Sachs specifically considered Africa's absence in the BRICs and the potential of South Africa as the largest economy in the region, but made two important points.
First, real GDP growth of South Africa from 1992 to 2002 averaged only 2.3 per cent, placing the country in the middle tier in the regional growth trends. Secondly, with longer-term projections of around 3.5 per cent growth over the following 50 years, South Africa's economy in 2050 would be smaller than the smallest BRIC, making it difficult for the country to become a global economic heavyweight.
In fact, South Africa did not find a place even in another category formulated by Goldman Sachs: the next layer of emerging economies after BRICs, or the Next Eleven, comprising countries such as Indonesia and Nigeria. The decision then, to include South Africa is based more on geopolitics than economics.
A significant starting point was the first BRIC summit hosted by Russia in 2008 at Yekaterinburg. The declaration issued on that occasion had invoked an equitable, democratic and multi-polar order.
In a subsequent statement from Russia, BRIC was described with a touch of exaggeration as part of “the formation of a polycentric, fair and democratic world order”.
A notable factor that can contribute to the richness and dynamism of the BRICs process is links with other groupings, regional and international, like the Shanghai Cooperation Organisation, IBSA (India, Brazil and South Africa) and above all, G-20.
With South Africa's addition, BRICS' status as a unique concert of regional and emerging continental powers will be enhanced. But it is not so much the singularity of its origin but the elective affinity of the members that has provided the cementing influence for the grouping.
BRICS' smaller membership can be its prime source of strength. In tasks like restructuring the international financial system and facilitating the mission of the WTO, BRICS could be a source of valuable initiatives and ideas. Among BRICS themselves, the possibilities of cooperation in several fields are enormous. An example is former Brazilian President, Mr Lula da Silva's proposal for use of national currencies in intra-BRICS trade.
Free trade agreements are another policy measure that BRICS could consider as a means to promote trade and investment flows among themselves.
China has already become the largest trade partner of Brazil, South Africa and India; on India's part much remains to be done to realise the potential of trade and economic exchanges with other member countries.
BRICS-wide cooperation and partnership among business and industry offers boundless possibilities, but it has a long way to go.
(The author, a former Indian envoy, is now Professor at XIME, Bangalore. email@example.com)