Tagged: Russia

BRICS dilemma, folly or curse?

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Master of Junk

IT WAS never meant to be anything more than a political union, similar in status to the non-aligned states. Economically, only two of the five BRICS nations, China and India are doing well, the rest are all currently in junk status. Russia was junked in 2015, followed by Brazil in 2016 and South Africa in 2017. In many respect it is Russia which has tilted BRICS in favour of junk, and has lead the pack in this regard, with the result, there is now a Good BRICS and a Bad BRICS story.

Goodness BRICS

Let’s take a look at what is good here. So far as the China is concerned, the need to create markets for its overproduction of goods has meant that it is forced to continue investing in overseas markets, and the result is largely of benefit to us.

South Africa, an outlier so far as size is concerned, has seen several deals involving, variously, the creation of an entire city in Modderfontein, the relocation of a Hisense television factory to our shores, and the latest investment of 11Bn Rand towards a new car factory in PE. So in addition to our ample resources and export market, there is now significant beneficiation of goods within the country, in an evolving relationship, all producing goods which in turn end up in the West.

India, another global leader, has taken a slightly different tack. The past decade has seen successive major investments by Asian-based entrepreneurs in the South African economy. Beginning with Lakshmi Mittal, who bought former state-owned ISCOR shortly after democracy, to create ArcelorMittal. More recently the Indian billionaire Anil Agarwal bought a substantial stake in Anglo American, a traditional dual-listed South African business, which has relocated its headquarters to London. The pattern is thus one of picking up bargains, arguably to the benefit of stakeholders. Though trade between the two countries is booming, this is often however at the cost of local clothing and textile workers.

Badness BRICS

Where trade with the two Asian economic giants of BRICS has tended to benefit South Africa. The reverse is true when it comes to Russia. Instead of buying out state-owned enterprises (SOEs) as in Mittel, relieving taxpayers of an unnecessary drain on the treasury, or simply just investing money, the Russian strategy has been instead to hijack the remaining SOEs whilst foisting projects upon us of dubious merit. In effect it is Russia which has engaged in what can only be called a form of state capture, and neocolonialism.

The proposed Rosatom nuclear deal along with its many intrigues under Malusi Gigaba is very bad for South Africa, both economically and politically. Apart from the fact that the deal will result in an unnecessary 1Trn Rand expenditure from the treasury on nuclear technology already past its sell-by-date, — bringing to a halt and seriously compromising a highly successively renewable energy programme — it will not only relieve the country of taxpayers money, but will also remove scarce foreign exchange.

If implemented the Rosatum deal would commit South Africa to paying forward for its electricity in Dollars for the next 60 years — a currency that Russia desperately needs in order to balance its own books. In effect no money is being invested by Russia as such. Instead, the country would borrow money on the open market against its forward production, in order to buy moribund technology from Russia in a similar deal already concluded with Saudi Arabia. The ‘sukuk deal’ financed Medupi and Kusile in this way, and albeit local technology which benefitted, the resulting finance model is no doubt to the ultimate detriment of the economy. See how Saudi money dried up.

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Will Brexit give way to a Brixit?

THE EXIT of the United Kingdom from the European Community is not solely a result of economic forces (who would vote for market turmoil?), but is rather an abject political lesson in democratic power relations. Will Brexit give way to a Brixit, the dissolution of BRICS?

If it wasn’t the constant flow of immigrants from the continent that riled the British voter, then it was the growing centralisation of power in Brussels, the plethora of EU legislation, the imposition of European laws and legal precedents and the resulting erosion of the powerful common law in Britain, which appears to have put paid to the European union for the meantime.

As Larry Kudlow writing for CNBC online put it: “For a country which has routinely acted to limit the power of royalty, which holds stock in documents such as the Magna Carta … Britain will regain its political freedom, its autonomous self-government, and its independence from an European Union that is spinning out of control under the power of establishment elites, unelected and unaccountable socialist bureaucrats, and a court that is increasingly making legal decisions that replace Britain’s powerful common law.”

The same uneasy indictment could easily apply to other economic blocs such as SADC, the AU and its much vaunted rival and successor, BRICS. In the short space of two decades, South Africa’s political leaders have taken our nation into a number of regional and international, monetary and economic unions. The introduction of the Rand-based Southern African Development Community (SADC) on 17 August 1992 was quickly followed by the African Union (AU) 26 May 2001, and then BRICS on 16 May 2008.

By all accounts South Africa is thus a serial unionist. Having arisen like the United Kingdom as an aggregation of several states, including the Boer Republics, Cape Colony and Natal. The country’s first experience as an economic and political union was as a member of the British Empire, followed by the Commonwealth, a block of 52 nations. Then another bout of Republican nationalism followed, with successive periods of relative isolation resulting from apartheid.

Upon the emergence of the new era, a majority government,the Bill of Rights and an inclusive democracy, South Africa embarked on an outward path, which lead to a regional 15 member economic block in Southern Africa including Botswana, Namibia, Lesotho and Swaziland. This was quickly followed by the rise of the 54 member African Union under Mbeki. By all purposes, an attempt to emulate the emergence of the EU.

The result inside the country was a long boom, as South Africa became the gateway of choice to the rest of Africa. But then things began to unravel somewhat. Not content with being a regional superpower within the AU, South Africa, ever much the Casanova of politics, jumped into bed with Brazil, Russia, India and China to form BRICS. All of which, except for India, have atrocious levels of public debt and weak currencies. Brazil was recently given junk status.

It is this awkward attempt to create an alternative to the Post-WW2 Bretton Woods structures such as the IMF and World Bank, which has presented huge problems. The grouping is not simply a marriage of convenience, predicated on the numbers, like the G20, but has come to dominate foreign policy, to the detriment of both the SADC region and the increasingly insignificant AU. Under the Zuma administration, one could be forgiven for thinking that both SADC and the AU no longer exist. The result can be seen in the re-emergence of regional conflict, such as the political turmoil in Mocambique and continental instability.

Time to think the unthinkable. Time for a Brixit?

Latest fibs by South Africa’s Jingoistic Press.

READERS who enjoy spotting lies, may entertain themselves with today’s offering of blarney from South Africa’s jingoistic “yellow-press”

First up, there’s a paid-for-by-the-nuclear-industry piece by Mathew le Courdeur, published by News24, which just proves that if you fly a group of journalists on an all-expenses paid holiday to Russia, you can get easy coverage on nuclear reactor technology. Technology which has yet to solve the problem of waste. The cost alone of dealing with nuclear waste makes the industry prohibitive.

The news site published by Media24, recently closed down its comments section, to avoid criticism of its apartheid past following a recent reversal, in which it suddenly offered a half-apology after defending corporate failure to appear before the Truth and Reconciliation Commission for the past decade.

If the the rave reviews of Russia by a journalist without any credibility isn’t your cup of tea, then try a more nuanced Pro-Putin piece in the Mail & Guardian. What is surprising about the Russian reality is how images on the ground, are disconnected from the content of a news piece which ignores atrocities such as Aleppo and Ghouta. Syrians were gassed by Assad, with the full support of the Russian government.

Thus the image of a poster with the words: “Rassia (sic) is the enemy of Syrian people” published right next door to the article with the charming but misleading title: West ‘ignored Russian offer to have Assad step aside’ appears to contradict each other (evidence perhaps that you can try to lie, but your conscience might just get the better of you?)

The content of the obviously Pro-Russian propaganda piece, appears to implicate the West and not Russia for supporting Assad. The revision of history via the culture of published lies is demonstrable.

The Mail & Guardian started out as an all-white newspaper publishing propaganda for the anti-apartheid movement. It now appears to offer similar services to Oligarchs and dictators around the world.

South Africa fails to attend Russian Victory Day celebrations

The massive VE day celebrations in Moscow have put the rest of the world to shame. While the UK was experiencing election drama of a hung parliament, and the USA was still mulling over the collapse of Bears Sterns, Greek Contagion and banking reform, Russia held one of the largest VE day celebrations in the world in Red Square.

That there is something incredibly significant about the 65th anniversary of the defeat of Nazism in Germany and Facism in Italy could be seen by the unprecedented sight of a US battalion and a UK regiment marching side-by-side Russian troops, so all was not lost as one of the largest shows of military force since the Cold War era flung Vladimer Putin into the international spotlight.

South Africa, which was a part of the allied forces which pushed the Nazis out of North Africa towards the end of WWII was however, nowhere to be seen, and Medialternatives has been unable to confirm whether or not any local politicians were in attendance. If they were not, then it was a poor show indeed as far as South Africa is concerned.

Have we nothing to celebrate in the defeat of the Nazis? Is there nothing to be learnt by the siege of Leningrad (now Volgagrad)? Are we not a nation which remains unbowed by tyranny and which still has a Bill of Rights expressing freedom?

Unfortunately, Julius Malema’s visit to Zimabwe could have played a part in the embarrassing shunning of overtures by Russia which is in the process of redefining its role in the world.

No longer the Cold War pariah, Russia is picking up where it left off but Malema’s feting of Mugabe, a staunch support of Hitler’s race supremacist thinking appears to have dampened the ANC ruling party enthusiasm for all things Soviet and our country’s support for freedom around the world.

It is therefore time for the ANC to move into the ranks of the opposition. Enough is enough, we need a ruling party which supports freedom and equality.