South Africa has to first get its house in order before it is able to compete on the global stage and maximise its partnerships with fellow emerging market economies in the BRICS bloc.
Standard Bank CEO Sim Tshabalala told Newzroom Afrika that it is perfectly rational for South Africa to be a part of BRICS, particularly when the world appears to be fragmenting.
The world is increasingly multipolar, with many groupings of nations positioning themselves to facilitate the global movement of capital, goods, and ideas.
“It makes sense for South Africa to look for ways of improving its ability to trade and invest between itself and its partners,” Tshabalala said.
However, this will not help South Africa succeed in a multipolar world unless it improves its infrastructure, enhances the performance of its logistics systems, and stabilises its electricity supply.
The country will also have to make it easier for people to get visas to travel to South Africa and, in particular, ensure skilled professionals can enter the country.
“The way to be able to compete and partner appropriately is to make sure that you have got your house in order,” Tshabalala said.
It has to be made easier to do business in South Africa and for people to be economically active.
“It is very important for South Africa to partner with like-minded states, but it is also important to be competitive. We are competing for resources out there, and the competitors are not going to do us favours. We have to get competitive.”
The easiest way for the country to do this is to reduce the cost of doing business in the country and make it easier to move capital into and out of the country.
Tshabalala also warned that South Africa is losing to its African peers, with its competitive advantage quickly disappearing.
“We are competing on the continent and with emerging markets for this capital. So if they have decreased the risk of investing in their country and generated greater returns, the money will then rather go to those places than South Africa.”
The key is economic growth. “We are growing at 0.8%. Other countries are growing much faster. Where do you think that money is going to go? It is going to go to other countries and not South Africa.”