08 Mar The Ukraine Crisis and SA: Our Precarious Position

The Ukraine Crisis and SA: Our Precarious Position

On 21 February 2022, the world woke to reports that Russia officially recognised the Donetsk People’s Republic and the Luhansk People’s Republic as two independent states. While the shocking invasion of Ukraine which followed in the wake of this declaration on 24 February left many reeling, it’s a crisis which had been brewing for several years – it seems it was never a matter of if but when?

A complicated matter

Picking a side may seem obvious to most, but it’s important to bear in mind that this is politics: there is hardly ever just one party at fault. Take a look at our article Ukraine: More complicated than you think, which we’ll post in the next few days for more of the nuances and intricacies around this story.

For the purpose of this article we will focus primarily on South Africa’s place in all this. 

South Africa’s international relations

South Africa has been in a precarious position for quite a while. Having just recovered from the mess left to us by former president Zuma, we were struck by a global pandemic, and wracked up a debt bill the likes of which we’ve never seen in the process.

Covid-19 had also exposed or catalysed other fractures in our internal and  international relations. The ANC leadership has shown definite cracks, with individuals within Ramaphosa’s cabinet even linked to deliberate social unrest and looting orchestrated in 2021.

Internationally, blanket travel bans with limited foresight imposed by the likes of Boris Johnson and Joe Biden have soured our relations with their nations.

Then one has to take a look at our trade partners and creditors.

International Trade: our reliance on the West

According to the World Integrated Trade Solutions, South Africa’s main Import Partners are:

 – China (18,47%)
 – Germany (9,87%)
 – USA (6,57%)
 – India (4,91%)
 – Saudi Arabia (4,15%)

And our main Export partners are:

 – China (10,73%)
 – Germany (8,01%)
 – USA (7,00%)
 – Unspecified (5,59%)*
 – UK (5,24%)

*The platform does not specify whether the unspecified export partner includes various partners, whether they don’t have the data, or whether the data is not made available for some reason.

Given the ideological and current political divide between these nations, it’s no surprise that we are vacillating between different views. The matter is compounded by our national debt, which has increased dramatically as a result of Covid-19 initiatives, with an estimated 82,76% debt to GDP ratio as of October 2020 according to the IMF. While this ratio has decreased over time (69,90% as at Dec 2021), this was before the Ukraine crisis.

Our greatest creditor also happens to be the IMF, the very body which sparked the creation of BRICS. In July 2022, the IMF approved a loan of $4,3 billion to South Africa for our Covid-19 response 100% of our assigned loan quota at the IMF. What should be noted is that the IMF had previously delayed and/or denied loans to South Africa due to concerns over corruption and the government’s handling of various SOE misconduct. While the emergency loan wasn’t extended under the strict conditions which barred prior lending, it should still be noted that the IMF has the power to force South Africa to comply with certain conditions should they wish.

Another headache for South Africa is our status in the African Growth and Opportunity Act (AGOA). This unilateral trade programme is extended by the USA to offer favourable trade deals to African Nations who apply to a list of criteria set by the Office of the US Trade Representative (USTR).

Eligibility for AGOA membership is defined as follows:

“The Act authorizes the President to designate countries as eligible to receive the benefits of AGOA if they are determined to have established, or are making continual progress toward establishing the following: market-based economies; the rule of law and political pluralism; elimination of barriers to U.S. trade and investment; protection of intellectual property; efforts to combat corruption; policies to reduce poverty, increasing availability of health care and educational opportunities; protection of human rights and worker rights; and elimination of certain child labor practices.” – US International Trade Administration

Rand Rescue had previously reported on how AGOA was utilised to force South Africa into accepting (among other things), US poultry imports deemed sub-par by our health and safety standards during US President Barack Obama’s term. At the time South Africa had been threatened with expulsion from AGOA due to what the US deemed as ‘long standing barriers to US trade’. Essentially, the Obama administration demanded that South Africa amend our animal health and food safety rules which prohibited certain US imports due to outbreaks of bird flu in the USA. Given our exports to the USA stood at $178 million in agricultural goods for the year (2014), we had no option but to give in to their terms.

This move highlighted our reliance on AGOA and our absolute inability to control our own imports as well as health and safety standards as a result. It’s not surprising, given the USTR published a report (Beyond AGOA) which described the “need to develop new trade policies for the new Africa”, a move which many have seen as a gross misconduct and an indication of US coercion of emerging economy policies and politics. It’s no secret that countries like Russia, China, Saudi-Arabia, the UK, Libya, UAE, Australia and Brazil (among others) have imposed the same tactics in Africa and further afield, but how such actions are framed in the media is rather divergent.

While South Africa may have thought the EU and US would give us a break, they made it patently clear that they do not accept our slack stance on matters and want us to take a hard line on the matter.

And yet the president is between a rock and a hard place. His party has various historic ties with Russia and other communist nations. While he may want to appease the side which opposes Putin’s actions, he also stands to lose even more footing and credibility in the ANC if he does. What we should consider is what the outcome for SA would be if the president loses his seat as party head. Who will follow in his footsteps? If he is dethroned for a hard stance on Russia, chances are that the next in line could be decidedly anti-West.

Of particular worry for many African leaders is that the US seems to be specifically focused on eliminating other players in the African market through AGOA, and has left Africa dependent on them. With each renewal of AGOA, the US has enacted major provisions which have eliminated trade for up to two years, according to Paul Ruberg, President of the African Coalition for Trade in Washington.

South Africa’s BRICS membership

One of the most problematic parts for SA in choosing sides is undoubtedly our BRICS membership.

The acronym represents the names of the five nations involved: Brazil, Russia, India, China and South Africa.

Between these five nations, they share a combined 26,7% of the world’s land surface, 41,5% of the world population, 23,3% of the gross world product  and 32% of the world’s GDP PPP.  Or at least this was the case before the global pandemic and current Ukraine crisis.

BRICS was formed in an effort to foster independent international commercial, political and cultural cooperation among the nations. Part of the BRICS agreement is the BRICS Contingent Reserve Arrangement (CRA) which is specifically aimed at easing currency issues when either of the member states are experiencing global financial pressure.

In order to make and accept payments not facilitated by the SWIFT financial system, both Russia and China had developed their own equivalent systems, SPFS and CIPS respectively.

It is understandable then that it’s fairly difficult for nations within BRICS to oppose the very thing BRICS was built for. Surprisingly though, Brazil voted against Russia on 2 March 2022 for a draft UN Security Council resolution to condemn Russia’s invasion of Ukraine. It was the only BRICS nation to vote.

President Bolsonaro doesn’t seem to support the vote, and has criticised his Vice President Hamilton Mourao for condemning the invasion. Brazil’s foreign ministry seems at odds with its leadership and this is echoed by events in South Africa, where President Ramaphosa backtracked on statements released by our Minister of International Relations and Cooperation, Naledi Pandor, which condemned Russia’s invasion of Ukraine. South Africa subsequently abstained from voting.

South Africa’s UN ambassador, Mathu Joyini, expressed concern for our stance and is of the opinion that the lack of international interest in the UN resolution is not conducive for diplomacy. President Ramaphosa, however, feels that this is a matter for the UN to resolve given that it is an armed conflict between two nations in the UN.

South Africa-Russia relations

In addition to BRICS, South Africa has quite a big economic link to Russia. Business Insider claims that South Africa has around R77 billion in investments tied up in Russia, while Russia has R23 billion in investments within our country.

Some companies who bargain on Russian investment, shareholding and imports include Naspers, Zest Fruit, SABMiller (with 50% of its joint venture in Russia), Bell Equipment and Barloworld.

The South African Embassy in Russia held a South African promotion event in January 2022, focused primarily on South African wines; the visit was said to be a success and will see the execution of several commitments and cooperation between the two nations.

It’s therefore understandable that certain businesses and delegates are weary of criticising Putin as this could have dire economic consequences.

South Africa’s relationship with NATO

Another problematic relationship is that between South Africa and the North Atlantic Treaty Organisation (NATO). As explained by the NATO Association of Canada, NATO, the USA and the South African Apartheid regime maintained a clandestine relationship with a mutual interest in fighting communism.

NATO’s mandate requires the promotion of democratic values and allows the consultation and cooperation on defence and security-related problems. Where diplomatic efforts fail, NATO has authorised itself to undertake military crisis-management operations under their founding treaty (Article 5 of the Washington Treaty). Such intervention by NATO members is allowed for individual members or in cooperation with other countries and international organisations.

In the 1970s, NATO had agreed to protect and defend shipping lanes around the Cape Route. US President Ronald Reagan had considered South Africa a key regional ally against communism. Reagan had also attempted to veto the Comprehensive Anti-Apartheid Act in 1986. When President Mandela came into power he was quite outspoken about his ire for NATO. He had remarked often that NATO was merely a vehicle for the USA to police the world. While Mandela was much loved throughout the world, his tenure as president of a democratic nation with ties to Muammar Gaddafi and Fidel Castro (as well as SA’s leaders who followed thereafter), was seen as problematic by the US in particular.

Gaddafi is well known as being one of the forefathers of the African Union (AU), and yet NATO has been cooperating with the AU since 2005. As with the UN, it’s evident that the relationships among NATO members and foreign nations are riddled with complexities and contradictions.

The African Union

Despite all the catastrophes we’ve seen in the past few years, South Africa has pushed one agenda quite aggressively for the past few years – our collaboration with other African nations.

To be fair – this agenda is one which is beneficial to South Africa and Africa as a continent. One cannot deny that the ‘developed world’ tends to portray Africa as backwards, primitive and incapable of managing our own affairs. This was quite clear when South Africa identified two of the major Covid strains and was subsequently treated like pariahs for our medical research capabilities.

Consider, for instance, that many of the  leaders who looted Africa’s natural, mineral and cultural wealth refuse to return looted African artifacts under the guise that they can better safeguard it. The irony is lost on no one, given that the dishevelled state of most African nations at present is the very result of colonial plundering, subjugation and bias. A report by the French government in 2018 indicates that up to 90% of Sub-Saharan Africa’s material cultural legacy is kept by current and previous colonial powers outside the continent.

These artifacts are predominantly in the hands of Europe. Individual loot and collections aside, the five top museums in Europe hold the following number of African artifacts – most all of it looted during colonial pursuits:

 – Musee Royale de l’Afrique Centrale, Belgium: 180 000
 – Humboldt Forum, Germany: 75 000
 – Musee du Quai Branly Jacques Chirac, France: 70 000
 – British Museum, Britain: 69 000
 – Weltmuseum of Vienna, Austria: 37 000

One particular argument put forth by world leaders is that many of these artifacts were ‘given’ to them. One must ask yourself, however, if a country under colonial rule with colonial oversight and no autonomy can be logically perceived as giving up its greatest wealth ‘willingly’. It is the argument for why the British Royalty owns SA’s biggest and most valuable diamonds. Moreover, the UK believes that they have rightful ownership of African items since they can more adequately showcase them to a greater number of people. Somehow they have not considered that the only reason people have greatest access to it there is because they are forced to. Nor do they consider how ownership of our own wealth could boost our economies and enable us to create even better museums and showcase our own heritage.

Legal barriers in these countries have made it quite impossible to force them to comply – and it is for this reason that Africa is wary of the West’s bullying tactics which seek to force them into decisions, but are not applied to the West itself.

Africa is quite tired of the booming narrative of purported war crimes by world leaders while they themselves do not ascribe to these notions or hold themselves accountable for their actions.

If South Africa chooses to choose a side while other African nations have mostly abstained from it, then we risk losing our credibility among our peers.

Another factor which many have frowned upon is the Zelensky presidency handing out weapons to civilians and criminals. African critics have stated that the cost of arming civilians have long-term repercussions and are prone to enabling militias (this has been the stance of the Red Cross for more than three decades). The Kyiv Independent reported that unverified persons are rummaging through boxes of ammunition on Kyiv streets after Zelensky barred all men 18-60 from leaving the country and called on civilians to be armed.

A report by an unverified source in Ukraine has stated that this callous arming of civilians has only managed to create chaos through arming gangs and criminal factions who are targeting civilians. Rand Rescue does not want to report on unverified media, but it seems the prominent act of the media of late – we will discuss this in more detail in our next article.

Secondary repercussions

South Africa’s stance on the crisis aside, there will undoubtedly be other repercussions for us which are beyond our control.

With our petrol price already sky-high, the crisis in Ukraine has already created massive quakes in fuel prices the world over. As with the pandemic, whatever projections we had in place for the state of our nation are bound to be wrong.

Speaking to IOL, Professor Emeritus of International Law Andre Thomashausen noted that the crisis could see our electricity prices increase by up to 40% and liquid fuel prices to increase to R40 per litre.

Given our current economic state, South Africa certainly can’t stand to pay even more for electricity, fuel, food and transport. Such a blow would be devastating.

Time to move abroad?

South Africa’s precarious position on the global map, both geographically and in terms of our alliances and trade partners clearly highlight the difficulties in truly acting autonomously. We are beholden to too many nations under trade or due to overspending, and this situation is not likely to end anytime soon.

Our stance around the Ukraine situation highlights just how vulnerable we are to outside influence and our relations with other nations as well as past trade agreements indicate how easily we can be bullied into playing someone else’s puppet.

If you’re looking to find some stability elsewhere, talk to Rand Rescue about options for moving your money abroad so you can start your new life financially free from the shackles of SA’s economic blunders.

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