By thumbing our nose at the West, things can only go south

You might be a little embarrassed by Cyril Ramaphosa’s new role as Putin’s parrot, blandly repeating all the Kremlin lines and lies allegedly justifying Moscow’s unprovoked invasion of a sovereign country and firing deadly missiles at hospitals, theatres and shopping centres.

Or you might wonder, beyond the imagined links of “struggle solidarity”, why SA in 2022 — or its government anyway — backs an imperialist adventure attempting to redraw boundaries that were settled decades ago, and replace by brute force a democratically elected government.

US President Joe Biden is not given to flights of hyperbolic extremism, unlike his predecessor. Yet last week he branded Vladimir Putin a “war criminal”. Given this amping up of the new Cold War rhetoric and the likely prospects of a long war in Ukraine, or a bloody stalemate outcome, it is fair to ask why SA aligns itself with aggressor Russia. It can’t be that the bullying and revanchist Moscow accords with any definition of the human rights which were celebrated here on Monday. On the contrary.

On the one hand, as parliament was informed last week by the leader of the opposition, our trade with Russia is about 1% of our combined trade with Nato member countries.

Actually there is a more fundamental issue than the terms of trade and the minuscule role — beyond funding the ANC and spewing millions on Jacob Zuma for alleged assistance in a nuclear deal that didn’t happen — played by Russia in our economy.

In early 2000, the US Congress enacted the Africa Growth and Opportunity Act (AGOA), which allowed SA to increase its trade with the giant US economy from R56bn back then to a whopping R150bn today. It is no exaggeration to note that our entire automotive industry, by virtue of AGOA’s tariff-free access for a range of SA cars exported to the US, is entirely dependent on AGOA.

And the point about AGOA is that it is a unilateral trade agreement — its renewal depends on the graces of the US Congress and the next renewal date is in 2025. By then, barring some electoral miracle for the Democrats, both houses of Congress are likely to be in Republican hands and possibly the White House too.

One of the leading Republicans in the race for the White House in 2024 is Nikki Haley, who has strong support among non-Trump members of her party. Previously governor of North Carolina, during the Trump administration she served — with cabinet rank — as US ambassador to the UN for two years from 2017 to 2019.

It was on her arrival at the UN that Haley issued the starkest warning to members of the global body. She said the administration would hold to account those who did not back the US. “For those who don’t have our back, we’re taking names; we will make points to respond to that accordingly.”

This all seems brutally transactional and of course it is. But Putin has now changed the calculus by reanimating the Cold War and brutalising his neighbour.

Haley’s world view is likely to be the dominant one in the US administration when AGOA is up for renewal in 2025 and we could — as a country, and across a belt of industries and export sectors – end up paying a huge price for our siding with the Kremlin at a time of war.

Now it is perfectly correct that SA was not alone in declining to condemn Russian aggression at the UN recently, or even to call out the invasion for what it is. Thirty-four other countries did so. But of the countries which matter in the world, the major abstainers have degrees of hard power which to some extent insulates them from consequence. Pakistan has nuclear weapons, ditto for India plus its importance in the US pivot to Asia, and Saudi Arabia and the UAE have prized oil reserves and are the regional counter forces to Iran.

With our ever declining economy — now ranking us just 35th in the world and dropping – our low growth, high unemployment and borrowing-fuelled economic model, likely to become prohibitively expensive with surging interest rates hikes, our offer to the world is very modest. All we really had, beyond our private sector against which government sets its face most days, was our example of “soft power” in terms of our 1994 transition, and more of that below. It is a declining asset.

We have no defence force to speak of and FW de Klerk decommissioned our nuclear weapons. True we are the world’s number one producer of platinum group metals needed for clean energy transition, but investment in new exploration, due to over regulation and departmental inefficiency, has pretty well dried up.

It is unlikely, given the nature of such encounters, that our business leaders will share any of these home truths with Ramaphosa at Thursday’s investment summit. Nor that Ramaphosa will offer any of the hard reforms needed to encourage meaningful new investment.

In her handsome tribute to Mike Spicer, the business leader who died suddenly last week, Claire Bisseker of the Financial Mail wrote that business confidence here is at its lowest ebb. She cited that SA’s fixed investment has now fallen to a “disastrous” 14.2% compared to 21.6% before the 2008 global financial crisis. She correctly cited the explanation for this dire situation which Thursday’s conflab is about, but which it is unlikely to change much.

“Business is not investing,” she writes, “because the hurdle rate that must be overcome is so high given SA’s ageing port and rail infrastructure, the skills and energy shortage, a rigid labour market, complex industry regulations, policy uncertainty, fiscal risk, corruption and state inefficiency.”

For a better description of our economic malaise, that one paragraph list is hard to beat.

We can add to this the war in Ukraine, not so much for what its likely outcome will be which is unknowable, but for what it reveals about where SA has chosen to stand in the world.

In 1994 through to 1999, for the brief golden moment of democratic constitutionalism here, SA with its new constitution and market sensible economic policies chose to align itself with what master scholar and Stalin biographer Stephen Kotkin defines as “the West”.

In a riveting interview with the editor of the New Yorker, David Remnick, Kotkin expanded on this idea.

“The West is a series of institutions and values. The West is not a geographic place. Russia is European, but not Western. Japan is Western but not European.”

“Western” means — in his view — “rule of law, democracy, private property, open markets, respect for the individual, diversity, pluralism of opinion, and all the other freedoms we enjoy”.

Volodymyr Zelensky and his people in Ukraine stand — and are dying right now — for these freedoms.

If you go back in time here to the mid-1990s, SA via its constitution and its economic outlook aligned itself similarly.

But in the decades since then, and in the absence of any meaningful government reforms, the open markets have started to close (see “localisation”), the rule of law is on life support, the state shuts out diverse opinions, and the ANC wants to rip up property rights. It’s a long and depressing list and the results are all about us in the unemployment queues and the increased impoverishment of many South Africans. And, crucially, the lack of investment.

Backing Russia in 2022 in its pitiless war of aggression is the latest milepost of our slide downward. And our pivot against the West, both the states that comprise it and the ideas embedded in it, will cost us even more over time.