We’re in the eye of a geopolitical storm, at the centre of the most unforgiving realpolitik to come to our shores for more than 30 years. This time round it’s about trade, the shape of global economic order and governance.
The elephants are sizing each other up, and with the Brics summit imminent they’re coming to our little patch of grass to stamp about.
SA loomed large on the Western liberal agenda in the late 1980s as SA’s role as a bulwark against Soviet expansion in Africa clashed with public opposition to collaboration with the apartheid regime. Fortunately, things changed; the Soviet empire collapsed and apartheid did not hold. To the Western mind, a great miracle occurred, and the rainbow nation was born. It’s languidly risk-free to scoff at this in the face of the challenges we face today, and so I remember my rule that one should spend as much time and effort rebuffing arguments as their original proponents did creating them.
But none of this means that SA is not poorly understood by many in the West. In the sharper world we live in today, SA has surprised many overseas be appearing to be an increasingly problematic partner in the global order. It is our misfortune to be at the heart of a giant battle for geopolitical dominance.
The contest is taking place at every level. Russia’s invasion of Ukraine had the opposite of its original intent — to push back against democracy on Russian borders and make the West look weak. But the war for intellectual property, the dominance of future technologies and the management of financial systems is raging.
A clear picture is beginning to emerge of what’s on the agenda in August at the Brics summit, at COP28 in Dubai and at the WTO next year. It’s about the EU’s Carbon Border Adjustment Mechanism (CBAM), and a big global South pushback. CBAM is a tax regime designed to stop “carbon leakage”, by which industries avoid heavy carbon taxes in the EU by manufacturing in more lax regulatory environments and then importing the completed products into the EU. The US, UK and Canada are preparing similar laws.
China doesn’t like it. “CBAM ... violates WTO principles ... and (will) seriously undermine mutual trust in the global community and the prospects for economic growth,” Reuters reported Liu Youbin, a spokesperson for the ministry of ecology and environment, as saying in 2021. Beijing has unleashed a campaign against CBAM not only because of its impact on Chinese exporters, but because it is a front in its contest with the US. Academic reports from Chinese universities on the impact on Africa abound, and suddenly there is a phalanx of local critics of varying competence who are vigorous in their condemnation of the EU’s carbon tax plan.
SA’s government has only just caught on to CBAM, and is up in arms as it realises the effect it could have on some of our key industries that are exposed to Eskom coal power. Just two weeks ago, the department of trade, industry and competition submitted a response to the EU, saying the bill will “transfer the burden of climate action onto developing economies” and place “undue and unjust burdens” on SA.
Pumping carbon
The sheer economic heft of China and India means that this matters, especially considering our government’s performative pivot away from important trading partners. But we in SA need to be more honest. We pump out carbon like a developed-world emitter, the 13th biggest since 1750 according to Statista. Our inability to convert that to some kind of prosperity is almost unique. (The biggest historical carbon dioxide emitter by far is the US, followed by China, Russia, India, Germany, the UK and Japan.)
So, when we try to hitch a ride on the “developing world” train it won’t hold much sway in the West, especially when a concessionary finance plan to fund SA’s move to a carbon-light economy is on the table, known as the Just Energy Transition (JET) Investment Plan.
But debt is geopolitical power and can be tied to conditions. That the JET is underwritten by Western countries and institutions seems to be a problem. Public enterprises minister Pravin Gordhan spoke about this recently in the first of several indications that not only CBAM but the JET project may come under fire. He conjured the idea of “green nationalism”, which is “where a country such as the US with ‘lots of money’ to advance technological developments uses it for its own benefit and doesn’t ‘treat this as a public good …”’, we reported.
Later, electricity minister Kgosientsho Ramokgopa — in a shocking deceit — said the closure of the Komati power station was “because someone gave us money and told us to decarbonise”. International relations and co-operation minister Naledi Pandor also spoke obliquely about “oppressors” and “neocolonialists” recently. “No oppressor will change the situation of oppression, but it is we who can do that. I think we need to develop a different relationship with our resources,’’ she told a Russian television station.
This fast-changing narrative appears to lay the ground for a Brics summit that will be vigorously anti-Western and will rail against CBAM and even the JET deal. For those not interested in the contestations of the big powers and more focused on our electricity crisis, SA’s move away from a comparatively quick and cheap solution will be infuriating.
• Parker is Business Day editor in chief.
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