FirstRand CEO Alan Pullinger says SA’s failure to condemn Russia’s invasion of Ukraine is morally “despicable” and the decision to stage joint naval exercises with the Eurasian military power could be potentially “catastrophic” for the local economy.
“My personal view around SA’s stance on that invasion — I think it’s despicable that we can’t find it within ourselves to call it out,” Pullinger told Business Day after FirstRand’s interim results presentation on Thursday.
“Increasingly, the progressive world is going to start looking around at countries that are friendly to or are enabling Russia and they’re going to say maybe we need to weaken them as well. We’re playing with fire here.”
The government has been widely condemned in the Western world, and from critics within its own borders, for adopting a neutral stance on Russia’s February 2022 invasion of Ukraine. SA has also abstained from UN votes and resolutions condemning the invasion, as well as Russia’s annexation of Ukrainian territories in the conflict, which is estimated to have caused as many as 300,000 military casualties.
About 14-million Ukrainians are also thought to have fled their homes, while civilian casualties could be as high as 100,000.
“I don’t understand how a country invades another country unprovoked and we say nothing,” said Pullinger. “I just don’t understand it — true friends call out friends.”
Notwithstanding the moral arguments against the invasion of Ukraine, Pullinger says there are also very real economic implications for SA’s tacit support for Russia.
However, it was the country’s decision to host joint naval exercises with Russia and China in February that has arguably put the greatest strain on SA’s international relations with Western powers.
“This is not in the interests of the country,” said Pullinger. “Very powerful countries are watching us — they can hurt us.”
Pullinger said his chief concern is that Western powers, led by the US, UK and the EU, might retaliate by potentially imposing trade barriers or restricting SA’s access to the SWIFT global payments system or other market settlement and clearing mechanisms.
He also cautioned the US could revoke SA’s duty-free access to its market under the African Growth and Opportunity Act (Agoa), which is due to expire in 2025.
“The way you sanction a country like Russia is with tanks and banks,” said Pullinger. “Look at what they did to Russian banks — it was catastrophic. You can simply get locked out of international markets. No cross-border payments, no settlements, no-one wants to deal with you. If that happens to us it poses a catastrophic risk.”
A draft resolution was recently introduced in the US House of Representatives by Republican legislators that denounced SA’s joint naval exercises with Russia and China and called on US President Joe Biden’s administration to review bilateral relations with Pretoria.
“What do you think they’re going to do when we’re having navy war games with a pariah nation?” said Pullinger. “They are starting to say SA is a problem. They don’t like the way this country is leaning.”
However, there may be more to SA’s dalliance with Russia than meets the eye. Information from the Electoral Commission of SA (IEC) shows the ANC received R15m in donations in the third quarter of the 2022/2023 financial year from United Manganese of Kalahari (UMK), a company partly owned by sanctioned Russian oligarch Viktor Vekselberg.
The ANC’s investment vehicle, Chancellor House, holds an indirect stake in UMK.
The government’s seeming nonchalance about the potential diplomatic fallout with the US, the UK and Europe is even more perplexing when one considers that these economies have pledged to help finance the energy transition away from coal. The US, UK, EU, Germany and France pledged $8.5bn in just energy transition funding at the COP26 summit in Glasgow in 2021.
“The economic interests of our country are not aligned by moving ourselves closer to a Russia-China story ... and alienating ourselves from that particular bloc of progressive nations,” said Pullinger. “It’s a dangerous path we’re going down and it matters a lot more than people think. It needs a proper debate.”
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