Paying the BRICS Price

Johannesburg – South Africa could well be paying the price for being part of the BRICS bloc after Britain recently announced it would cut development aid to the country by 2015.
Last year, Britain said it would also end aid to India by 2015.
BRICS brings together Brazil, Russia, India, China and South Africa in a union of emerging economies.
At the Fifth BRICS Summit in South Africa in March, the bloc declared a new order to challenge the “prevailing global governance architecture”, led by Europe and the United States, and also called for the reform of institutions dominated by the same.
Justine Greening, UK’s International Development Secretary, pointed to South Africa’s growth and stature as reasons for weaning off the country.
Annual British aid to South Africa peaked at around US$60 million in 2003.
“South Africa has made enormous progress over the past two decades, to the extent that it is now the region's economic powerhouse and Britain's biggest trading partner in Africa.
“I have agreed with my South African counterparts that South Africa is now in a position to fund its own development.
“It is right that our relationship changes to one of mutual co-operation and trade, one that is focused on delivering benefits for the people of Britain and South Africa as well as for Africa as a whole,” Greening said.

Relationship Redefined

Tshwane has, however, claimed Britain took the decision unilaterally and that it “redefined relations” between the two countries.
Clayson Monyela, spokesperson for the South African International Relations Department, said: “This is such a major decision with far-reaching implications on the projects that are currently running, and it is tantamount to redefining our relationship.
“Ordinarily, the UK government should have informed the government of South Africa through official diplomatic channels of their intentions and allowed for proper consultations to take place, and the modalities of the announcement agreed on.”
Monyela said it had been expected that a review of UK-South Africa relations would take place later this year at a bilateral forum.
“This unilateral announcement no doubt will affect how our bilateral relations going forward will be conducted. We are, however, looking forward to the SA-UK bilateral forum later this year to clear up this matter, among others.”
Greg Mills, head of the think tank ‑ the Brenthurst Foundation, and author of “Why Africa is Poor”, was quoted in the media saying: “As a BRICS member, it is little surprise that South Africa will no longer receive aid, since it is quite capable of funding most aspects of government itself.
“No doubt it's also difficult for any UK government to aid South Africa given the state of the UK's own economy, not least given the sometimes tense foreign policy relationship between London and Pretoria.”
South Africa’s Finance Minister, Pravin Gordhan, denied they had an agreement with Britain to cut aid, saying the country still had much inequality that it needed assistance in resolving.
Jeremy Kuper of the Guardian Africa Service recently wrote that South Africa remained “a nation with two parallel economies co-existing side by side”.
“On the one hand, it has the infrastructure and economy of a successful developed country,” he wrote, “but on the other there are millions of – mainly black – poor, hungry and dispossessed people often lacking basic education, merely subsisting as they struggle to survive.”
He noted that nearly 20 years after the end of apartheid, the disparity between rich and poor was getting wider, “even though South Africa has been overtaken by Brazil as the most unequal society in the world.”
He called the decision to cut aid wrong, saying that though the money was not much, it represented “symbolic support” for South Africa’s poor.
Kuper said since 1979, Britain’s policies on the Southern Africa region were a litany of failures.
“Britain would do well to remember that (Prime Minister Margaret) Thatcher, through her support for the apartheid regime to protect British mining and banking interests, helped to perpetuate the inequality that persists in South Africa to this day. Ultimately this has damaged British interests in the region.”
Other analysts, however, say this is a blessing in disguise for South Africa, as it should set out development priorities without relying on foreign aid.
This, the analysts say, could make South Africa an example of self-reliance for other countries on the continent that rely on aid for as much as 60 percent of their national budgets.


May 2013
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