G20 Summit and its impact on SA

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FIFI PETERS: We are wrapping up the show with a discussion or discussions that wrapped up at the weekend. Of course, the G20 meetings in India concluded with several outcomes, including a joint declaration that agreed to tone down the criticism of Russia’s invasion of the Ukraine, and also perhaps the highlight for the continent – the inclusion of the African Union as a permanent member of the global forum.

We’ve got Dr Azar Jammine, chief economist at Econometrix, for more on this. Azar, thanks so much for your time.

Going into the past weekend summit, quite a lot was said about the absence of the Chinese President Xi Jinping at the summit, and whether this would delay or prevent important decisions by the G20 from being made. Just your reflections on this and what were some of the key highlights of the weekend’s events that stood out for you?

Dr AZAR JAMMINE: Without a doubt the absence of Xi Jinping and Vladimir Putin from the event. Firstly, the absence of Xi Jinping reflects the tension that exists between India and China. We already saw that at the Brics Summit here a couple of weeks ago, where [Indian President] Droupadi Murmu was quite put out that the red carpet had been put for Xi Jinping, and not for himself to the same extent.

India’s role in the world economy and the world political environment is increasing all the time, in line with the fact that it’s become the most populous country in the world. We already know that there have been border tensions in recent years between India and China. I would look to those two economies naturally growing into being the second or first largest economy in the world, and probably the third-largest economy in the world. Within the next decade or two we are likely to see more and more of those tensions surfacing. Then Putin also not being there shows how isolated he has become.

Then you had President Biden going to Vietnam straight after the G20 summit, highlighting the way in which America is trying to court the Pacific nations, the Southeast Asian nations, Japan and Latin America. And clearly the American intention is to try and isolate China.

So you really are seeing a move by the United States and the West to isolate Russia and China, and to render them less effective than would appear to have been the case if you looked at the Brics Summit and the agreement to include a number of rogue states – if one could call them almost rogue states – as members of Brics, which was clearly aimed at appeasing China’s demands.

So we are in a very, very interesting geopolitical space at the moment, one that is not terribly reassuring for a world economy that wants to grow. These tensions also cut across the climate-change attempt at trying to get Russia and China to be more responsive to attempts to control climate change. That appears to have taken a secondary role in the G20 communique.

FIFI PETERS: Quite ironic, given that the world has just witnessed the tragic events that have unfolded recently in Morocco, and the death toll there that unfortunately keeps ticking higher. Just clear evidence there of the importance of climate change actually needing to take a front seat and not the back.

But I want to circle back to the point that you were making about the changing global landscape, the changing geopolitical landscape that is evolving to now include a voice for Africa, a voice that it perhaps didn’t have prior to this weekend’s announcements of the inclusion of the AU in the G20. What do you make of that, and how will that change the dial?

Dr AZAR JAMMINE: You’ve got to recognise that Africa accounts for a quarter of the world’s countries, and there’s no other continent with as many countries. It also has the fastest growing population growth rate of any continent, and the forecasts are that a large chunk of the world’s population within the next 20, 30 years will be African.

Unless the world actually looks after Africa there’s going to be more and more pressure on Africans to go as refugees to penetrate other areas of the world, most notably Europe, which has a negative growth in population and which, if it wants to grow its economy, is going to require more and more low-level skills which will be drawn from Africa.

So there’s no question that there is a recognition that Africa’s role in the world economy and political system is bound to increase over the coming few decades, and it would be foolhardy to stick with South Africa as the only representative of the G20 from Africa.

FIFI PETERS: I see Nigeria wants its own individual seat at the table like South Africa has, not necessarily through the AU. I reckon that makes sense. It is the largest economy in Africa. What do you make of that, and how far do you think Nigeria will get?

Dr AZAR JAMMINE: I think Nigeria could get quite far. It is now the largest economy in Africa and by far the most populous country in Africa. It has I think close on 200 million people, so it is becoming extremely important.

But it’s so interesting – why wasn’t it chosen to become part of Brics? Clearly there is an agenda here, where I think Nigeria and some of the West African countries fall into the Western sphere of influence.

And so again it’s part of the whole process of trying to isolate China and Russia, and to prove that they are not the be-all and end-all outside of the West.

FIFI PETERS: Someone actually made a comment on Nigeria’s exclusion from Brics invitee list and said that perhaps this is South Africa protecting its turf. Perhaps another powerhouse in that space could potentially lessen South Africa’s strategic advantage as being the gateway to the rest of the continent, or being the continental voice. Do you think maybe politics between South Africa and Nigeria was also at play there?

Dr AZAR JAMMINE: It’s possible that that was at play, but South Africa should be aware that with the progressive decline in its economy, its role as the leader of Africa is diminishing by the day and being overtaken by countries such as Nigeria, Ethiopia, Egypt and Algeria and the like.

So the South African government is responsible for this situation. It’s quite possible that South Africa tried to take advantage of its role as an official member of Brics for the moment.

But what I did find so curious was why Ethiopia should have been included as a new Brics member there instead of Nigeria.

FIFI PETERS: Okay. I was going to ask why you were curious about Ethiopia, but it was curious related to Nigeria’s exclusion.

Dr AZAR JAMMINE: Yes. I think the two are related. Ethiopia falls more into the Chinese sphere of influence, I think, than Nigeria does.

FIFI PETERS: Okay, got you. Azar, the message around reform of multi-lateral institutions, the likes of the World Bank, the likes of the IMF [International Monetary Fund] again feature as a discussion point. It was a discussion point at Brics, and it also expanded over to the G20. It was quite interesting to hear from the World Bank president saying that China has a significant shareholding in the World Bank, therefore implying that it is very much a part of some of the decisions that the bank makes in in lending or supporting countries. Just your perspective on this demand or a desire from the global south to have a more reformed World Bank and IMF, and whether you think that will gain significant traction in actual results?

Dr AZAR JAMMINE: Yes, there is the suggestion with the concept that the World Bank and IMF are still controlled by Europe and the United States, so that there is that ideological drive to try and extricate themselves from that sphere of influence.

But more generally, there is a huge challenge at the moment with the whole question of climate change and the need for massive amounts of funding of developmental projects to render the world less dependent on fossil fuels.

And in the case of Africa, the continent’s governments just don’t have the funding, the finance available to do what is being demanded of them by the West, so there is a definite attempt at trying to bring about a new multilateral set of institutions that will be more amenable.

At the moment there’s a perspective that the West is demanding that Africa changes in such a way as to become less dependent on fossil fuels, but does very little itself to help that cause, and does very little through these existing multilateral agencies to actually make it easier for countries like South Africa, like Nigeria, etc, to move away from fossil fuels without helping them with the funding.

Yes, we have been offered an $8.5 billion loan by a group of Western countries, but clearly in the broader scheme of things that is a drop in the ocean compared with what is really required for us to become completely carbon-independent within the next 10 or 15 years, as is being demanded by Western countries.

So there are contradictions, and it’s to overcome those contradictions over and above the ideological reasons why you’ve got developing countries wanting to see the birth of a new multilateral dispensation.

FIFI PETERS: Sure. Fascinating insights as always. But we’ll have to wrap it up for now. Dr Azar Jammine is the chief economist at Econometrix.