BRICS Summit in China: A Missed Opportunity
Patrick Bond, who held a keynote address at the BRICS counter-summit in Hong Kong says that critics consider the 9th BRICS summit in Xiamen, China, a missed opportunity to challenge corporate led globalization
Imperialism in Africa: China’s Widening Role
Lee Wengraf Review of African Political Economy
China’s presence in Africa has grown dramatically in the twenty-first century. Neoliberal privatization and trade agreements opened up investment opportunities not only for the West but also for China, heightening rivalries between the two. China has emerged as a dominant powerhouse in Africa, not only securing drilling and mineral rights across the continent, but cementing political allegiances with African regimes through development projects such as dams, roads and bridges. Chinese leaders have very actively cultivated these relationships with frequent high-profile visits since the start of the African “boom” in the early 2000s. Loans from China to poor countries, mainly in Africa, have surpassed those from the World Bank.
African oil-rich nations have been happy to embrace these alliances, welcoming “infrastructure for oil” deals. African leaders and business elites have sought out this foreign investment while attempting to secure favorable contracts requiring “local content,” that is, compelling manufacturers to invest locally, transfer technology and employ local staff. However, a number of reports describe Chinese companies importing Chinese labor and equipment, conveniently side-stepping “local content” provisions.
Demanding Zuma’s Resignation
Patrick Bond and Trevor Ngwane on the Real News Network 13 April 2017
ANC’s leadership called into question as Zuma’s corruption ridden Presidency is headed to an end, who will lead the country next, ponders Trevor Ngwane of the Johannesburg United Front and Professor Patrick Bond.
In South Africa, entering stage left: Jacob Zuma’s ‘Radical Economic Transformation’ alternative factoids
Patrick Bond 13 February 2017
South Africa’s two main warring political blocs – the forces of Fiscal Patronage (‘Zuptas!’ in local parlance, referring to the immigrant Gupta family’s curious influence over the president’s family and government) versus the forces of Fiscal Prudence (‘Treasury neoliberals!’ to critics) – are still represented by two men who have begun to stumble on terrain potholed by what a Donald Trump aid terms ‘alternative facts.’
After President Jacob Zuma’s State of the Nation Address (SONA) last Thursday, punctuated by intense protest and repression in parliament, the country’s leading political reporter (and former ‘Friends of Zuma’ insider) Ranjeni Munusamy predicted, “Radical economic transformation is going to be all the rage, apparently. Finance Minister Pravin Gordhan paid close attention to every word Jacob Zuma said. He has to operationalize this programme by allocating the requisite funding. Does he have the funds to fulfil these goals? Who cares? Zuma certainly does not.”
Perhaps, but even if it was just another move in the tired African National Congress (ANC) talk left, walk right dance-step, Zuma at least included a belated definition of the long-promised Radical Economic Transformation: “a fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female.”
South Africa labeled ‘junk’
Patrick Bond (Znet) 7 April 2017
South Africa is digesting the news of Standard & Poor’s April 3 downgrade of state debt to junk status following President Jacob Zuma’s March 30 cabinet reshuffle – 20 ministers and deputy ministers were fired or shifted including Finance Minister Pravin Gordhan – which dropped the value of the local currency, the rand, from R12.4/$ to R14/$ over the past week.
On Friday April 8, mass protests led by the outraged middle class and some progressive civil society allies aim to register dissent in all the major cities. The ruling African National Congress’ former military wing is mobilising hundreds of its veterans and supporters to ‘defend’ Zuma.
As political conflict grows more heated than at any point since 1994, an already stagnant economy is now teetering. Even if the credit rating agencies’ biases and competence should be questioned, further junk ratings by Moody’s and Fitch could well cause a ‘run on the bank’ similar to 1985 when apartheid leader PW Botha’s crazed ‘Rubicon Speech’ catalysed a new round of financial sanctions by Western banks. Botha was compelled to default on a $13 billion debt and impose exchange controls, as the foreign debt/GDP ratio hit 40%. Today it is nearly 50%, but in contrast, might the current crisis generate a long-overdue era of redistribution, racial justice and radical economic transformation?
This is the renewed rhetoric of many ruling party ideologues, and was also the promise of Gordhan’s replacement as Finance Minister, Malusi Gigaba last Saturday, April Fool’s Day.
Taking down Trumpism from Africa: Delegitimation, not collaboration, please
THE BRICS BANK EMERGES IN RUSSIA
The main point of the summit of leaders from Brazil, Russia, India, China and South Africa this week was host Vladimir Putin’s demonstration of economic autonomy, given how much Western sanctions and low oil prices keep biting Russia. In part this sense of autonomy comes from nominal progress made on finally launching the bloc’s two new financial institutions.
But can these new banks address the extraordinary challenges in world finance? For example, more than 60% of Greeks voting in last Sunday’s referendum opposed the neoliberal dictates of Brussels-Berlin-Washington, thus raising hopes across Southern Europe and among victims of “odious debt” everywhere.
Meanwhile, bubbly Shanghai and Shenzhen stock markets were crashing by $3 trillion from peak levels in just 17 days, a world-historic meltdown, at a time Chinese housing prices were also down 20% over the prior year. Beijing’s emergency bail-out measures represent vast subsidies to financiers, just like those used in Washington, London, Brussels and Tokyo since 2007.
Change is urgently needed yet the BRICS’ finance bureaucrats – especially two leading appointees from South Africa – won’t deviate from orthodoxy. Ongoing financial turbulence should offer a gap for the $100 billion Contingent Reserve Arrangement (CRA), which is anticipated to open its doors next month. However, it carries not only a strange name that even many insider experts often get wrong, but is dollar-denominated and structurally hard-wired to support the International Monetary Fund (IMF).
To illustrate, according to CRA rules agreed at last year’s BRICS Fortaleza summit, after 30% of a country’s quota is borrowed – based on double the amount of its own contributions (China at $41 billion, and Brazil, Russia and India at $18 billion each, and South Africa at $5 billion) – then the borrower must next sign a neoliberal IMF agreement.
For South Africa this could prove painful in the period ahead, after Pretoria finds itself borrowing from the CRA to repay the country’s soaring foreign debt. Inheriting $25 billion in apartheid odious debt in 1994, Nelson Mandela’s government worked diligently to repay. But over the past decade, outflows of profits, dividends and interest soared as the largest Johannesburg-based firms (Anglo American, DeBeers, etc) shifted their financial headquarters to London.
The foreign debt ballooned to its present $145 billion, the same level compared to the size of the economy that was hit thirty years ago when PW Botha’s apartheid regime declared a default. To repay short-term debt in a crisis would soon exhaust the $3 billion Pretoria is permitted to immediately access from the CRA, and then the IMF will march in.
BRICS cook the climate
As they meet in Durban on March 26-27, leaders of the BRICS countries – Brazil, Russia, India, China and South Africa – must own up: they have been emitting prolific levels of greenhouse gases, far higher than the US or the EU in absolute terms and as a ratio of GDP (though less per person). How they address this crisis could make the difference between life and death for hundreds of millions of people this century.
South Africa’s example is not encouraging. First, the Pretoria national government and its Eskom parastatal electricity generator have recently increased South Africa’s already extremely high emissions levels, on behalf of the country’s ‘Minerals-Energy Complex’. This problem is well known in part because of the failed civil society campaigns against the world’s third and fourth largest coal-fired power plants (Eskom’s Medupi and Kusile), whose financing in 2010 included the largest-ever World Bank project loan and whose subcontractor includes the ruling party’s investment arm in a blatant multi-billion rand conflict of interest.
Other climate campaigns have made little dent against the guzzling mining and smelting industries which chew up South Africa’s coal-fired electricity and export the profits. The same is true for the high-polluting industries of the other BRICS countries, even in China where environmental protests are rising and where it is
Why the West still rules
Review: The Art of Power Maintenance: How Western States Keep the Lead in Global Institutions by Robert Wade (Challenge, vol. 56, no. 1, January/February 2013, pp. 5–39)
The West is in decline and the world is becoming more multipolar. As a consequence, emerging powers such as China, Brazil and India are claiming for more power within international institutions. The questions of how existing institutions can adapt to new realities, and whether we need new structures to respond to recent changes, are among the defining puzzles of our time.
MORE BRICS RELATED MATERIAL FROM THE CCS WEBSITE
S Kimenyi, Mwangi & Zenia, Lewis (2011) The BRICS and the New Scramble for Africa The Brookings Institution : 19-21.
Böhm, Steffen & Ceci Misoczky, Maria & Moog, Sandra () Greening Capitalism? A Marxist Critique of Carbon Markets Organization Studies : 1-22.
Bond, Patrick ( 2008) Global Uneven Development, Primitive Accumulation and Political-Economic Conflict in Africa: The Return of the Theory of Imperialism Journal of Peacebuilding & Development Vol. 4, NO. 1: 1-15.
Bond, Patrick (2004) Bankrupt Africa: Imperialism, Sub-Imperialism and the Politics of Finance. Historical Materialism : 144-172.
Bond, Patrick (2013) Bond BRICS report-back in Clairwood slides Sarah Bracking & Patrick Bond at SDCEA workshop, Clairwood, 20 April : 1-28.
Bond, Patrick (2013) The BRICS Bank and Shifts in Multilateral Finance: A view from South Africa ‘Rising Powers’ workshop, Fudan University, Shanghai, 12 September : -.
Bond, Patrick (2013) How are the BRICS responding to the capitalist crisis? Breaking the chains – or polishing the chains? Centre for Civil Society Seminar: Financial crises and social resistance, from household to global scales : 1-55.
Bond, Patrick (2014) The BRICS “New Development Bank” Promoting equality and socioenvironmental justice in BRICS : 1-32.
Bond, Patrick (2013) So where to, brics-from-below? and also, where from, in contestations of BRICS sub-imperialism? People’s Dialogue BRICS strategy session : 1-78.
Bond, Patrick (2013) Bond BRICS critique for Amandla (Power Point). : 1-41.
Bond, Patrick (2013) The BRICS come to Durban what we can expect from the March 2013 summit of subimperial powers UKZN Development Studies seminar : 1-92.
BRICS / DBSA Press Clippings (2013) BRICS / DBSA Press Clippings. : 1-107.
Chase-Dunn, Christopher (2006) Contemporary Semiperipheral Development: the Regimes and the Movements Paper to be presented at the Santa Barbara Global Studies Conference session on Rising Powers: Reproduction or Transformation? February 22 – 23, 2013 : 1-19.
Ferrando, Tomaso (2013) BRICS and Land Grabbing: Are South-South Relationships Any Different? : 1-32.
Ghosh, Jayati (2012) India in the BRICS Presentation for workshop on “Strategies of development in India and other Asian countries: IIE, UNAM, Mexico City, 27 November 2012 : 1-14.
Lysa John (2012) Engaging BRICS Challenges and Opportunities for Civil Society. Oxfam India : 1-36.
Moyo, Sam & Yeros, Paris (2011) Rethinking the Theory of Primitive Accumulation: Imperialism and the New Scramble for Land and Natural Resources Paper presented to the 2nd IIPPE Conference, 20−22 May 2011, Istanbul, Turkey : 1-31.
Notshulwana, Mxolisi (2012) South Africa’s national interest and BRICS: Towards bandwagoning or balancing? Development Bank of South Africa : 1-12.
Panitch, Leo (2011) American Empire, Capitalist Crisis and the Global South Keynote speech to the Society for Socialist Studies : 1-10.
Petras F, James (1975) New Perspectives on Imperialism and Social Classes in the Periphery Journal of Contemporary Asia : 291-308.
Petras, James (2010) Anti-imperialist politics: Class formation and socio-political action Journal of Contemporary Asia : 1-22.