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Graphic Truth: BRICS economies eclipse the G7
In 2001, a Goldman Sachs economist coined an acronym for the four largest and most promising “emerging market” economies: Brazil, Russia, India, and China became known as the “BRIC” countries.
Five years later, reality imitated art when the countries decided to begin meeting regularly at “BRIC summits,” with the latest occurring in Kazan, Russia, this week. The subsequent inclusion of South Africa upgraded the “s” to a capital letter: the BRICS.
The group, which lacks formal treaties or binding obligations, has always been united more by what it opposes — US dominance of global financial systems — than by what it supports.
After all, it’s a hodgepodge: energy exporters (Brazil and Russia) and importers (China and India), democracies (India and Brazil) and non-democracies (China and Russia), allies (Russia ❤️China) and adversaries (India x China).
But the economic clout of the group is, on paper, formidable. With the addition of Iran, Egypt, Ethiopia, Saudi Arabia, and the United Arab Emirates this year, the BRICS+ economies account for 36% of global GDP – while the G7 group of wealthy democracies amount to just 29%. But, of course, there’s a catch: China and the US each contribute more than half of their respective group’s GDP.
Here’s a look at the economic size, and breakdown, of the BRICS+ and the G7 group it hopes one day to eclipse — not only economically but also geopolitically.
South African President Cyril Ramaphosa interacts with the leader of the opposition party, John Steenhuisen ahead of National Assembly members' questions in parliament in Cape Town, South Africa, November 3, 2022.
Another shot at the Rainbow Nation dream?
This unexpected alliance between South Africa’s long-ruling ANC and the Democratic Alliance has shown early signs of promise. One hundred days into the country’s Government of National Unity – made up of the erstwhile archrivals – voters are more positive about the country’s direction, and investors are bullish about its economic prospects. President Cyril Ramaphosa has even called the GNU South Africa’s “second miracle” – the first being the peaceful transition from apartheid to multiracial democracy in 1994.
Ramaphosa isn’t overplaying it: His African National Congress, once led by Nelson Mandela, campaigns on its history of Black liberation, while the Democratic Alliance is seen as the party of the white minority. Their odd marriage resulted from the ANC losing its parliamentary majority earlier this year – for the first time since 1994. Frustrating coalition talks in June prompted ANC Secretary-General Fikile Mbalula to describe the parties as “oil and water.”
And yet, they’ve made progress. The rand has strengthened 6% against the dollar since July, and the stock market has rallied by 20%. Ramaphosa says South Africa aims to triple its GDP growth to 3% this year.
Saffers are noticing. A 58% majority think the GNU is doing well and – rather incredibly – 62% of Black voters approve of the DA’s job performance (fewer than 5% supported the DA in the election). Some 40% say their country is now on the right track, double the figure from June.
Too early to declare success. Still, the GNU’s ad-hoc style is likely to come up short when tackling the big issues, such as corruption, crime, decrepit infrastructure, and poor energy and water supplies. Daunting, but in the words of Mandela, “It always seems impossible until it’s done.”Cyril Ramaphosa attends the oath of office ceremony for his second term as South African President at the Union Buildings in Pretoria, South Africa, 19 June 2024.
South Africa gets a new cabinet
President Cyril Ramaphosa unveiled South Africa’s new cabinet on Sunday, ushering in a new era of coalition governance for the Rainbow Nation. The move comes after the African National Congress lost its majority for the first time in 30 years in the May election, forcing Ramphosa’s party to enter a coalition government with its historic rival, the white-majority Democratic Alliance.
Ramaphosa announced that 32 positions were awarded across seven parties. The ANC retains the majority of seats, with 20, and has kept key ministries, including finance, foreign affairs (crucial in allowing continuity in their pro-Palestinian agenda and ICJ case), trade, and defense. The DA, after demanding 11 slots, was only assigned six, including key ministries like education and infrastructure, and DA leader John Steenhuisen was appointed agriculture minister. The remainder were divided among smaller parties.
Absent, but not silent. The uMkhonto weSizwe party, led by former President Jacob Zuma, came in third in the election but refused to join the coalition. The party has since found its voice as the outspoken leader of the Parliament’s opposition alliance.
Tensions remain high. The ANC has been systematically trying to dilute the DA’s influence by expanding the governing coalition to include 10 opposition parties, assigning them minimal portfolios. The difficult negotiations signaled converging economic policies, particularly on health care and Black economic empowerment, as well as deep distrust, with Ramaphosa accusing the DA of attempting to form a “parallel government.”
Will they play nice? As seen by the weeks of deadlocked cabinet negotiations, the parties still struggle to set aside decades of animosity, which could lead to instability, but the ANC and DA – at least for now – are committed to working together. We’ll be watching to see whether the coalition is stable enough to survive Zuma’s dedicated political instigation.
South African President Cyril Ramaphosa and Pemmy Majodina of the ANC attend a swearing-in ceremony into the National Assembly in Cape Town, South Africa June 14, 2024.
South Africa forms historic unity government, reelects Ramaphosa
South Africa officially has a unity government, marking a historic shift in the political makeup of the Rainbow Nation.
The African National Congress, which lost its 30-year outright majority in last month's election, reached an agreement Friday to form a coalition with the Democratic Alliance, its primary rival. The lawmakers also reelected South Africa’s President Cyril Ramaphosa.
“Today, South Africa is a better country than it was yesterday. For the first time since 1994, we've embarked on a peaceful and democratic transfer of power to a new government that will be different from the previous one,” said DA leader John Steenhuisen.
The coalition also includes the Inkatha Freedom Party, but former President Jacob Zuma’s uMkhonto weSizwe, or MK party, despite winning 15% of the vote, boycotted negotiations – as did the left-wing Economic Freedom Fighters.
Given the makeup and opposition to this fragile coalition, this is the dawn of an uncertain political era for the country. We’ll be keeping an eye on whether these unlikely legislative partners manage to hold the coalition together.
South African president Cyril Ramaphosa casts his vote during the South African elections in Soweto, South Africa May 29, 2024
Can the ANC make new friends and keep the old (president)?
For the first time in 30 years, South Africa’s African National Congress failed to win a majority in this month’s election, forcing it to turn to opposition parties in hopes of forming a coalition.
The most likely option now seems to be a multiparty coalition, similar to Nelson Mandela’s post-apartheid transitional government. This would allow the ANC to maintain its power by partnering with smaller, less established parties and, notably, the Economic Freedom Fighters, which underperformed in the election. According to Eurasia Group analyst Ziyanda Stuurman, this government is most favorable to the ANC as it would “keep Cyril Ramaphosa as president and provide at least some stability across the political landscape.”
A coalition with former president Jacob Zuma’s newly formed uMkhonto weSizwe party appears highly unlikely because its leader refuses to cooperate unless Ramaphosa steps down, which is non-negotiable for the ANC. Early predictions saw a likely coalition forming between the ANC and the Democratic Alliance, the leading opposition party thatwon almost 22% of the vote. But the two diverge on economic policies and affirmative action, and racial tensions between them are high.
South Africa is in uncharted waters, as the ANC is forced to make new friends for the first time. The uncertainty is making hard times in Africa’s biggest economy even worse, with the randweakening by another 1.3% on Wednesday. The ruling party is running out of time to form a coalition, as the Parliament must sit by June 16 to pick the next leader of this young democracy.
Johannesburg, South Africa - People are pictured voting at a polling station in Soweto in Johannesburg, South Africa, on May 29, 2024.
South Africa’s ruling party faces coalition conundrum
South Africa’s ruling African National Congress, led by President Cyril Ramaphosa, scored its worst election result in 30 years last week, forcing the party into tricky coalition talks. The ANC took just 40% of the vote, down from 58% in 2019 and below the party’s worst-case projections, as support waned due to high corruption, unemployment, and crime. Nelson Mandela’s former party now faces a choice between potential partners for building a coalition, all with a heavy price.
Leading contenders are the Democratic Alliance with 22% of the vote and the uMkhonto weSizwe party, aka MK, with 15%. However, ANC chairperson Gwede Mantashe indicatedan alliance with the DA is difficult due to policy differences, particularly on affirmative and universal healthcare. The DA wants toend the ANC’s racial quota system for employers and opposes the recently-passed universal healthcare act but says it is willing to work with the ANC.
The MK is also prepared to work with the ANC, but not if it’s led by Ramaphosa – a difficult starting position for talks. In addition, both the MK and a third possible partner, the Economic Freedom Fighters, campaigned on putting all land under state control and nationalizing mines and banks, issues that make foreign investors and many South Africans nervous.
The EFF is not a viable coalition party by itself since it obtained only 9% of the vote, which would fall just short of a majority for a coalition with the ANC. It is also considered “too erratic in its orientation, too in your face, and too unreasonable in its policy demands,”according to political analyst Susan Booysen.
Eurasia Group analyst Ziyanda Stuurman says she’s now watching provincial-level leaders, whose support or opposition to a coalition with the DA will prove determinative.
“Ramaphosa and his camp will need support from them for an ANC-DA governance model, or he could face a fast-moving rejection of his plans to form and lead a new government, and his allies may be swept out of power in a revolt against their leadership of the party,” she explained.
The new parliamentmust be sworn in within two weeks, and the president will then be chosen. Sources say that Ramaphosa is unlikely to resign despite the historically poor results, but we’ll be watching to see what deal he cuts to try and survive.South African president Cyril Ramaphosa casts his vote during the South African elections in Soweto, South Africa May 29, 2024
South Africa hangs in the balance: ANC leads but may lose majority
As the votes are being counted in South Africa’s most competitive election since the African National Congress came to power 30 years ago, the ANC is currently leading with 44% of the vote followed by the Democratic Alliance with 25%.
If the ANC fails to capture a clear majority but can scrape out at least 45% of the vote, it will likely be able to reinstate current President Cyril Ramaphosa and only need to make minimal policy compromises.
“If the ANC come in just under a majority, they are likely to approach smaller, ideologically aligned parties … to put together a stable coalition where they would be the dominant party,” says Eurasia Group’s senior Africa analyst, Ziyanda Stuurman.
Meanwhile, former President Jacob Zuma’s uMkhonto weSizwe Party — which has received just 14% of the vote — is calling for an opposition coalition to be formed to rival the ANC. But the second- and the third-largest opposition parties aren’t interested in joining the ranks.
It’s still too soon to call. “We are still early in the counting process, with only 34% of the country’s voting districts reporting results,” Stuurman cautioned. “The two largest provinces in the country have reported less than 30% of their results, and many of the larger rural regions in the country are only reporting about half of their results at this point.”
We’ll be watching through the weekend to see how the soetkoekie crumbles.
A man walks past election posters of the ruling African National Congress (ANC), as South Africa prepares for the May 29 general elections, in Soweto, South Africa, May 24, 2024.
Africa’s largest economy votes
The polls are open in South Africa, in the country’s most pivotal election of the post-Apartheid era. Dogged by corruption scandals, power grid failures, high unemployment, and poverty, the African National Congress, once headed by Nelson Mandela, is at risk of losing power for the first time since white-rule ended in 1994.
The left-ish ANC goes into the vote polling at about 43%. Its biggest rivals are the Democratic Alliance (polling at 19%), a largely white-led pro-business party with support among South Africa’s urban middle class; the newly formed uMkhonto we Sizwe party of former ANC leader Jacob Zuma, who is banned from running himself due to graft convictions (14%); and the quasi-Marxist Economic Freedom Fighters (11%).
Could the ANC really lose the throne? Not so fast, says Ziyanda Stuurman, Eurasia Group’s top South Africa expert. She thinks strong rural support will help it squeak over the 50% line. If the ANC gets between 45% and 50%, it will team up with smaller, ideologically aligned parties. A result below 45% would likely force an uncomfortable alliance with either the DA or the EFF. Polls close Wednesday night, and final results will be published on Saturday.