BRICS and Africa

David-H-Shinn-01
Photo: David H. Shinn

BRICS and Africa
Next Generation of African Security Leaders
Africa Center for Strategic Studies
National Defense University
Fort McNair
Washington, D.C.
19 March 2013

Remarks by David H. Shinn
Adjunct Professor, Elliott School of International Affairs
George Washington University

Introduction

Brazil, Russia, India, China and South Africa, the so-called BRICS, will hold their 5th summit in Durban, South Africa, 25-27 March 2013. The theme of the summit is “BRICS and Africa— partnerships for integration and industrialization.”

Russian President Vladimir Putin and Chinese President Xi Jinping will join the presidents of Brazil and South Africa and the prime minister of India. This meeting will showcase South Africa and give the other leaders opportunity to learn more about Xi Jinping. The Chinese and Russian presidents will also make separate state visits to South Africa.

The BRICS have met annually since 2009, although South Africa only joined the group at the end of 2010. One of the items on the agenda in Durban is the creation of a $240 billion development bank and bailout fund, which could serve as an alternative to the International Monetary Fund. Lack of agreement on the currency for use in the fund may delay a decision.

In January 2013, this summit was preceded for the first time by a stand-alone meeting in New Delhi of the national security advisors of the five BRICS. At previous summits, the national security advisors met on the sidelines. According to press reports,terrorism, cyber security, piracy and the situation in Syria dominated this session. Brazil emphasized the security situation at the 2014 World Cup and 2016 Olympics. South Africa focused on extremism in North Africa and the Sahel.

The BRICS now account for 43 percent of the world’s population and about one-quarter of the world’s GDP. But the 2012 GDPs ranged from South Africa’s $390 billion to China’s $8.3 trillion. Brazil’s GDP is about $2.4 trillion while Russia and India each have a GDP of about $2 trillion. The 2011 GDP growth rate ranged from a high of 9.3 percent in China to a low of 2.7 percent in Brazil. India had a 7.1 percent growth rate,Russia 4.3 percent and South Africa 3.1 percent. Russia and Brazil have the highest per capita GDP at more than $12,000. India has the lowest per capita GDP at $1,600. China is next lowest at $6,100 and South Africa at $7,600. Except that each of the five economies is the largest in its market area, the BRICS are strange bedfellows.

China

China has four principal interests in Africa. First, it needs access to energy,minerals, timber and agricultural products. China imports about one-third of its total oil imports from Africa. China also imports large quantities of cobalt, manganese, tantalum, bauxite, iron ore, and coal from Africa. These imports of raw materials from Africa and other parts of the world sustain China’s rapidly growing economy. Without strong economic growth, the current leadership of the Chinese Communist Party would be hard pressed to remain in power. China has a long-term strategic interest in African natural resources.

Second, China counts on the political support of African countries in international forums. Africa’s fifty-four countries constitute well over one-quarter of the United Nations’ 193 members. While China holds a veto power in the Security Council, Africa has three non-permanent seats on the Council. Africa is also well represented in organizations of interest to China like the UN Human Rights Council and the World Trade Organization. China makes every effort to cultivate the maximum number of African countries on all issues of interest to Beijing that arise in international forums. In some cases, like-minded African governments use the Chinese just as the Chinese use them, for example when contentious issues affecting China or a particular African nation arise in the Human Rights Council. When Tibet became an issue in 2008, China leaned on the Africans to remain silent or even make supportive statements. They did. African countries can depend on China to avoid raising controversial African human rights issues in the Human Rights Council and perhaps even to support them when they are criticized by western countries.

Third, China wants all countries to recognize Beijing and not Taipei. Beijing has never retreated from its insistence on the “One China” policy. Equally important, China has never forgotten that African states were instrumental in 1971 in replacing Taiwan with the People’s Republic of China on the United Nations Security Council. Only four African countries — Swaziland, Burkina Faso, Gambia and Säo Tomé and Principe — still have diplomatic relations with Taiwan. Near the end of 2008, following the election of anew president in Taiwan, Taipei and Beijing reached an unofficial truce whereby they agreed not to actively solicit countries that recognize one country to switch to the other.Fourth, China seeks to expand exports to Africa. In 2009, China passed the United States and became Africa’s most important trade partner. It retains that title; in 2011, China-Africa trade totaled $166 billion. Nevertheless, only about 4 percent of China’s global trade is with Africa while 14 percent of Africa’s trade is with China.

China-Africa trade has generally been in balance over the past decade. There are,however, large country-by-country disparities. Some fifteen African oil and mineral exporters have large surpluses with China, while more than thirty African countries,including the poorest ones, have significant deficits. Five African oil and mineral exporting nations account for about 78 percent of Africa’s exports to China.

China pursues these interests in several ways. While the West still accounts for most of the foreign direct investment in Africa, China has been more aggressive than western countries in recent years. China’s FDI in Africa probably exceeds $40 billion,most of it in oil, banking, services, manufacturing and extractive industries. Historically,this constituted only about 4 percent of China’s global FDI.

In 2011, 10 percent of China’s new FDI went to Africa. The main recipients of Chinese investment are South Africa, Nigeria, Zambia, Algeria, DRC and Sudan. Chinese companies are also more willing than western companies to take risks in Africa.

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