There is something pathetic about President Cyril Ramaphosa’s efforts to spin the way he is handling Russia’s invasion of Ukraine, and his apparent naivete is ever more disturbing as Russia ratchets up its aggression against military and civilian targets alike.
Not that it matters in a global context: SA is a bit player and any notion that it could play any meaningful role in mediating a vicious conflict launched unilaterally by Russia simply reflects delusions of grandeur. SA may once have mattered in the era of Nelson Mandela, and it still sometimes punches above its weight in global forums such as the Group of 20, but it’s a small, shrinking and faraway economy and it matters little to the world now. Yet its economy will be hit, just as the world economy will be, by the consequences of the war against Ukraine. That war now looks like it could last for some time, whatever delusions of mediation SA’s president might have, and could cause huge human tragedy and major macroeconomic damage.
Visiting North West on Friday, Ramaphosa confirmed that it was SA that asked for his March 10 meeting with Russian President Vladimir Putin, and gushed again about how “grateful” he was that Putin had taken his call. He also tried again to explain why SA was one of just 35 countries to abstain in the UN’s vote against Russia, which was supported by 141 countries. “We abstained because the resolution did not address all the issues that would encourage mediation and peaceful negotiation,” Ramaphosa told journalists on Friday.
It is not just that multiple attempts by the US to get Russia to talk have already failed, or that Russia has not budged an inch in the talks it has had with Ukraine — nor indeed that it made it clear to Israel, which also had a go at mediating, that Ukraine’s total surrender is the only outcome that might get it to halt the war.
International stature
For SA, surely, the really humiliating moment was the March 10 response from the Kremlin to Ramaphosa’s call. It was a response that simply swatted him off, making clear Putin didn’t regard him as a mediator at all. Rather, Putin simply informed Ramaphosa about the talks between Russia and Ukraine, reads the statement, according to which Ramaphosa “supported the ongoing political and diplomatic efforts”.
This is hardly likely to enhance SA’s international stature, or to do much for its relationships with its major trading partners, the single largest of which is the eurozone. But no-one outside SA really cares right now. War and unprecedented sanctions are shaping up to result in another big shock to the global economy, just as the shock of the pandemic is receding. Russia is only the world’s 11th-largest economy and Ukraine’s economy is small. But Russia looms large in global energy markets as a major exporter of oil, gas and coal. It matters too as a producer of metals such as platinum, copper and nickel. And the two countries really matter in global food markets: together they account for almost 80% of the world’s sunflower seed oil exports and almost 30% of its wheat exports.
The war could have far-reaching implications for global energy markets. It has already sent energy, metals and food prices spiralling. The macroeconomic effect will be felt in supply chain disruptions and widely in higher inflation and inflation expectations, which will push central banks to raise interest rates, curbing growth. The uncertainty itself is also likely to hit sentiment and growth. S&P Global has cut its global growth forecast by 0.7 percentage points to 3.4% for 2022, and raised its inflation forecast by 2.1 percentage points to 5.9%.
SA will be buffered by high commodity export prices, but the global fallout is likely to drive the growth rate for this year below 2%, with inflation heading over the top of the 3%-6% target range. The economic outlook could be even worse if the war lasts longer and the oil price goes even higher. And as last week’s GDP figures showed, the economy has yet to recover from the Covid-19 pandemic. Perhaps our president should worry more about getting SA’s economy to grow and less about cosying up to his Russian counterpart.
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