Wednesday, March 27, 2013

Seat at top table confers a status beyond money

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26 Mar 2013 | Tony Leon | Original Publication:  BDlive

South Africa joining Brics despite its modest economic size is a bit like getting a good seat at a top table in a fashionable elite restaurant, writes Tony Leon

THE five developing world leaders gathering in Durban on Tuesday for the fifth Brics summit are politicians with divergent agendas and different domestic challenges to address.

They do, however, conform to the more-or-less universal laws of political leadership — when you face pressing problems at home, do one of three things: blame someone else, or change the subject, or go travelling/hold a summit. In the case of the Brics jamboree, all three boxes can be ticked simultaneously.

President Jacob Zuma’s recent interview in the Financial Times provided a master class in blame-avoidance. He blamed the apartheid legacy and the eurozone crisis for South Africa’s low-performing economy and deflected interviewer Alec Russell’s diagnosis of "four troubled years in office and a disastrous six months for South Africa’s image" by awarding his government 70% for its achievements to date.

Still, spare a thought for summit host Zuma. Insiders have criticised his foreign policy achievements as being a case of "care and maintenance" for the grandiose African Renaissance project nurtured by his predecessor, Thabo Mbeki. Yet, it was on Zuma’s watch that South Africa joined the Bric quartet of developing world leaders, despite our modest economic size, around one-fifth of the next-smallest member, Russia. It’s a bit like going to a fashionable elite restaurant: getting a good seat at a top table confers the sort of status that goes beyond money. Undoubtedly this thought has also struck other economic leaders of the developing world, who have yet to be invited and each of whom has a characteristic not represented: Mexico (Spanish and second-largest Latin American economy); Turkey (pivotal state at the bridge between Middle East and Europe); and Indonesia (high-growth Muslim Asian state).

Part of South Africa’s attractiveness to the Bric founders, who owe their provenance to the pen and acronymic ability of the very western-centric Jim O’Neill of Goldman Sachs, is as proxy for the rest of Africa.

However, Nigeria is, on some estimates, on the cusp of overtaking South Africa as the continent’s largest economy. Its central bank governor, Lamido Sanusi, recently offered his thoughts in the same forum as Zuma, the Financial Times. Both men commented on the role of China in Africa, hardly surprising since, over the past decade, African trade with China has risen from $11bn to $166bn.

Whatever Zuma’s private doubts, as host to new Chinese leader Xi Jinping, for whom the Durban summit will be one of his first foreign outings since his installation as president of China earlier this month, Zuma offered this comfort: he told western companies to stop warning against China’s embrace of Africa, advising: "We think we can see the benefits." Nigeria’s Sanusi took a far different tone. He wrote that: "China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism." Actually, this was not very different from the recent remarks of another absent guest at the Durban shindig, Mbeki.

But where Sanusi struck a very different and refreshing chord from African leaders past and present was in this dose of candour: "We cannot blame the Chinese, or any other foreign power, for our country’s problems. We must blame ourselves for our fuel subsidy scams, for oil theft in the Niger Delta and for our limitless tolerance of incompetence."

There is, of course, a link between the "limitless tolerance of incompetence" and the faith that all five leaders place in the virtues of the "development state". Although, to be perfectly fair, given the European Central Bank’s cack-handed response to the latest financial crisis on one of its islands, Cyprus, the alternative and more traditional Anglo-American model is creaking at the seams.

But it is from the other Asian giant at the summit, India,that a warning voice of the limits of the state-centric approach recently emerged. While none of the summit participants could be accused of being liberal, each of them faces metastasising corruption across their body politics.

Indian author and former corporate CEO Gurcharan Das, whose latest work is splendidly entitled India Grows At Night, believes the answer to blighted governance in the world’s biggest democracy lies in the "liberal case for a strong state". He derived the book title from the fact that "India grows at night while the government sleeps". In other words, a story of private success and public failure.

But even more striking is the distinction he draws between governments that are "pro-business" and those "pro-market". The rising income disparities and embedded corruption in all five Brics countries can be partly explained by the phenomenon. Pro-business attitudes lead to crony capitalism. In contrast, a pro-market approach would meet this need: "Where the state is needed — to provide law and order, education, health and water — it performs poorly. Where it is not needed, it is hyperactive, tying people up in red tape."

Don’t expect such lashings of candour in Brics leaders’ final summit communiqué.
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