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Sunday Times STLive By Sunday Times Editorial, 2011-01-15

Is SA up against a Brics wall?

Sunday Times Editorial: China's invitation to South Africa to join the loose alliance of nations under the Brics umbrella presents this country with opportunities for economic growth and influence.

Brics - an acronym for Brazil, Russia, India, China and South Africa - does not derive its influence from being a formal trading bloc or a political alliance.

But it is, nonetheless, a forum that provides its members with opportunities to network and to initiate economic arrangements.

In a paper published in May last year, Goldman Sachs said: "Our baseline projections envisage Brics, as an aggregate, overtaking the US by 2018. In terms of size, Brazil's economy will be larger than Italy's by 2020; India and Russia will individually be larger than Spain, Canada or Italy.

"In the coming decade, the more striking story will be the rise of the new Brics middle class. In the last decade alone, the number of people with incomes greater than $6000 and less than $30000 has grown by hundreds of millions."

Some have expressed surprise at South Africa's invitation to join this club of emerging nations at the expense of faster-growing economies such as South Korea and Mexico, but there is a ready explanation.

Two of the five nations - China and India - are substantial manufacturing economies, while Brazil, Russia and South Africa are large suppliers of raw materials.

China's long-term stability hinges on its ability to continue to improve the standard of living of its population by growing employment in manufacturing.

The key to this is securing the supply of raw materials needed to fire up production. South Africa's potential uranium, coal, iron ore and platinum resources are likely to be vital to meeting both energy and infrastructure needs.

South Africa is also strategically positioned to provide regional financial and services infrastructure to these two economies as they seek opportunities to exploit resources from other African countries.

Like all good opportunities, this one comes with a new set of threats. For one, the democratic governance records of Russia and China do not chime with South Africa's progressive democracy.

For another, South Africa will be expected to pay a price for the privilege of a seat at this table. It may have to burn more of its credibility with the highly industrialised world by voting in lock-step with China and Russia on global security issues.

When it comes to the advancement of human rights, this is not the company that polite states keep. Because it is the smallest of the Brics countries in every respect - geographical area, population, armed forces and GDP - South Africa will be in a weak position to push back. Brace yourself for a rocky ride.