QUESTION 1 [40 MARKS] ANALYSIS | Kenneth Creamer: In a changing world, BRICS must remain true to its mission

The global environment in which BRICS operates is challenging. An important compass for BRICS in navigating through these ever-changing waters is for the body to remain true to its original mission and to work to transform the world economic order into one that is fairer and more inclusive.

When I teach my students about the powerful impact that economic growth can have in transforming people’s lives, and when I talk to them about the policy discipline that governments need to adopt in order to achieve and sustain high rates of economic growth over a long period, I inevitably include in my lectures reference to the role of the great Chinese leader, Deng Xiaoping.

Deng’s policies helped to accelerate the rate of economic growth in China in the 1980s and 1990s to well above the world and OECD growth rate average. This period of rapid economic growth completely changed China and, in many ways, helped to create the world as we know it today.

Deng is reminding us to be pragmatic and to allow both the state and the market to play their respective roles in advancing economic development. The state’s role is to articulate a vision of inclusive development and provide effective governance, services and infrastructure. The market’s role is to develop and deploy new technological applications and promote higher levels of efficiency in production and exchange.

BRICS – made up of Brazil, Russia, India, China and South Africa – is a geopolitical grouping of countries working together for their mutual benefit and with the aim of rebalancing economic and political power in the world. Broadly speaking, BRICS countries are from the Global South, with most BRICS countries having for some time been colonised or dominated by Western countries as a result of past Western expansion and colonisation.

BRICS countries represent about 3.2-billion people, over 40% of the world’s population. BRICS member countries have several programmes for fostering international cooperation. A BRICS Business Council was established in 2013 in order to promote economic cooperation and deepen trade, investment and economic ties between the business communities of the BRICS member states.

The New Development Bank (NDB), also known as the BRICS Bank, was established to mobilise finance for infrastructure investment in BRICS countries and other emerging market countries. The NDB is headquartered in Shanghai and has a regional office in Johannesburg.
Through its many initiatives, BRICS seeks to reshape the world’s existing international financial architecture and systems of trade and investment so as to strengthen the economic performance of countries in the Global South. Since the first high-level meetings of Brazil, Russia, India and China in 2006, its first summit in 2009, and the inclusion of South Africa in 2010, BRICS has become an important grouping in the global economy.

BRICS has also faced certain inevitable challenges as the global environment has changed over the past two decades or so. For example, there was a broad policy consensus as to the benefits of global trade and globalisation at the time when China joined the World Trade Organisation (WTO) in 2001.

In more recent years, policies in support of globalisation and global cooperation have been on the decline and nationalism and narrower country-specific policy making has been on the rise – some have described this as a process of “deglobalisation”.

President Cyril Ramaphosa recently explained South Africa’s strategic approach on this issue, as follows: South Africa has… used its membership of… international forums like the G20 and BRICS… to advance the views and interests of countries in Africa and the rest of the Global South. Throughout, we have been firm on this point: South Africa has not been, and will not be, drawn into a contest between global powers.

South Africa currently Chairs BRICS, following China in 2022, and South Africa is preparing to host the BRICS Summit in August this year. In the build-up to the BRICS Summit, under the auspices of the South African BRICS Business Council, there has been ongoing engagement with six business councils and business chambers of other BRICS member states in order to explore economic opportunities. Through this process, a number of working groups have been established focusing on such makers as knowledge sharing in agricultural technologies, the boosting of fertiliser production, plans for increased agricultural trade between BRICS countries, as well cooperation on health care, vaccine development, and malaria control and elimination.

These are positive developments, and it will be important that the upcoming BRICS Summit in August should build on these detailed and practical economic engagements. Such engagements are the very building blocks through which the vision of increased South-South cooperation will be attained. It is through this kind of detailed and practical work by business and government leaders that the system of global finance, trade and investment will begin to be reconfigured, and a fairer, more inclusive world achieved.

In as much as South Africa’s participation in BRICS is about promoting South-South economic cooperation and reshaping the global economic system, South Africa’s entry into BRICS is consistent with the country’s commitment to opening trade and investment flows with as many parts of the world as possible and is in line with the vision that South Africa should serve as a gateway for trade and investment in other parts of the African continent.
From time to time, there are anti-dumping investigations by the South African authorities concerning goods sourced from China, and not too long ago, the Chinese authorities temporarily blocked the export of South African beef into China due to a local outbreak of foot and mouth disease. These are the kind of normal trade disputes that should be expected as trade between South Africa and China continues to grow. Such issues, while very difficult for those involved, should pose no systemic risk to South Africa and China’s strategic relationship, particularly if such makers are dealt with efficiently and fairly by the authorities in both countries.

As is well known, South Africa is facing a major electricity crisis that is having a seriously negative impact on the country’s economic performance. This crisis is as a result of planning failures over a number of years, including the poor management of the country’s energy transition to new energy technologies.

It would be very useful, given South Africa’s current challenges, for the Chinese government and Chinese businesses in South Africa to position themselves to play a role in helping the country to overcome its electricity shortage. Perhaps China or China working together with the New Development Bank, could also consider mobilising concessional finance and grants to assist South Africa’s just energy transition? Or perhaps Chinese capabilities could be used to help to strengthen South Africa’s national electricity grid and extend the national grid into areas with high solar and wind power potential, which is an urgent national priority for South Africa.

The importation of solar panels and batteries into South Africa has increased dramatically in recent years. For example, for the whole of 2022, South Africa imported USD 345 million worth of solar panels, and already in the first quarter of 2023, South Africa imported USD 200 million worth of solar panels”.


Examine the influence of globalisation and the significance of economic forums such as BRICS on the South African economy. Evaluate the opportunities and challenges that arise for businesses operating in BRICS member countries.


Critically assess the influence of financial inflows, including foreign direct investment (FDI), foreign portfolio investment (FPI), and remittances, on the economic advancement of South Africa. Examine how these financial movements affect matters such as capital accumulation, exchange rates, and economic stability. Delve into the potential advantages and disadvantages linked with distinct types of financial inflows for the nation’s economy.


An open letter to corporate South Africa — why doing good is good for business

It feels like we’re at another pivotal moment in South Africa’s history. Our beloved country faces a tonne of challenges, and we can no longer remain passive observers — or worse, critics. The time for definitive action is now.

Corporate South Africa, that means you. It’s time to roll up those sleeves and intervene where you can. Doing good is no longer just a moral imperative — it’s also good for business. In fact, I’d argue it’s become a survival strategy for any company wanting to operate in our country.

The good news is that this movement is already well under way.

You’re probably familiar with the term “active citizenry”. It’s what we refer to when describing how individuals and corporate entities do their part for society. The amazing thing is we’re seeing more and more examples of this, as individuals and organisations make a positive impact in their communities and within the corporate realm.

Take the issue of traffic jams caused by load shedding. In the last few months in Johannesburg, companies like Investec and Standard Bank have taken matters into their own hands, ensuring that traffic lights continue to function in Sandton and Rosebank during power outages. Likewise, Discovery and Dialdirect, industry rivals, joined forces to tackle the scourge of potholes on our roads. These examples showcase how companies are stepping up to make a tangible difference in the lives of South Africans.

Even more encouraging is the news that 115 CEOs from South Africa’s largest companies have pledged their skills to assist the government in alleviating the country’s crises. This agreement includes leaders from FNB, Anglo American, Woolworths and Vodacom. They have committed to working together to address concerns around energy, transport and logistics, crime and corruption — areas critical to our economic recovery.

What inspires me about these examples is that they reflect a profound transformation in our corporate landscape. In the past, “doing good” was often just a box-ticking exercise that fell under the mandate of corporate social responsibility (CSR). Now we refer to corporate social investment (CSI), which better describes how businesses are seeking to build sustainability and long-term impact into their operations.

Here is where I believe another mindset shift is needed. As businesses, it’s up to you to define what constitutes a good investment. While I’m no financial adviser, I want to make the case for a new indicator: return on kindness (ROK).

When it comes to an investment, a business is concerned with its bottom line. Back when it was CSR, maybe this meant receiving a tax benefit. As the definition has expanded to include less direct forms of return, let’s not underestimate the value that comes from doing good.

By uplifting communities, transferring skills, and investing in education, you’re not only cultivating potential clients and employees, you’re also fostering goodwill. It might be hard to measure, but in a country where such a quality is often in short supply, it should not be underestimated.
I define ROK as shifting the emphasis from financial returns to corporate social willingness, where kindness and community-building are the ultimate return on investment.

“Okay, but we also have a business to run,” I hear you say. Sure, and that’s the “bottom line” of ROK, it doesn’t have to cost a lot. Small actions make a difference. They may seem like drops in the ocean, but even a small contribution can lead to significant change.

It’s about reminding ourselves that we’re not alone and, as our Bokke champions recently reminded us, we really are Stronger Together”.


Analyse how ethical business practices and corporate social responsibility initiatives can contribute to long- term sustainable economic development. Provide examples of how your workplace/company can successfully integrate ethics and CSI into their current business model, and discuss the impact this will have on its financial performance and reputation.

Answers to Above Case Study Question

Answer 1: In terms of the impact of globalisation on the South African economy, it is evident that there is a significant level of impact of globalisation. Economic forums like BRICS also have a major impact on the South African economy in terms of providing opportunities and challenges to businesses in South Africa. The impact of globalisation as well as BRICS on the South African economy is analysed as follows:

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