Latest news with #McebisiJonas
Daily Maverick
a day ago
- Business
- Daily Maverick
As the global economy rebalances away from a historic Western core, SA must act strategically
This is an edited version of Mcebisi Jonas's address to the Kgalema Motlanthe Foundation's winter seminar on growth and transformation. The ground is shifting under us and South Africa, like every other modern economy, needs to be agile to deal with systemic and emerging challenges. The expression 'May you live in interesting times' is an ancient Chinese curse. I'm sure that we join the global community in wishing for more boring times. What we are seeing right now are fundamental changes in global relations as the global economy rebalances away from the historic Western core. China's emergence, closely followed by India, presents an opportunity for a more diverse world order, one without a single pole of global power. The frictions and tensions built up over decades under the old order have begun to trigger political, military and macroeconomic crises. The early developmental states – Japan, South Korea, Taiwan and Malaysia – paved the way for change. But the sheer size of China and India (accounting for one-third of the global population) entails a much bigger global transformation. Global growth is now tilted decisively towards Asia and other emerging centres. The concentration of global capital is rebalancing towards Europe and China. However, the US dollar still holds its position as the apex currency of a single global hierarchy. As the demographic, economic and monetary base of the world continues to shift away from the Western alliance, a new architecture is needed to govern economic and financial relations. If we look to historical precedent in the 20th century, the transfer of economic leadership from the British Empire to American hegemony was facilitated by a shared language, history and culture. Now, there are fewer institutional factors to ease the waning of hegemonic power and the emergence of new centres of authority. The transition is not from one hegemon to another, but from one hegemon to many. The cold winds of protectionism, racial nationalism and militarism are currently blowing through global politics. The shift towards a multipolar world is fraught with danger: fragmentation, military confrontation and economic disorder loom large. The real and painful effects of war and economic distress have already engulfed large parts of the world. Globalisation, which once propelled economic growth and productivity gains, may have reached its limit as nations act to raise barriers to trade and migration, or cement closed relationships with chosen friends. Barriers and threats to the movement of people and commodities are likely to slow the pace of global growth, rather than accelerate it. Adding to this are the ongoing conflicts over technology access and choices. Foundations for a new multilateralism In this context, the need to rethink multilateralism is urgent and daunting. Whatever the threat to global stability, the integration of production into global value chains and the dispersal of technological innovation mean that strong countervailing forces will seek to preserve a rules-based global order. While global trade is unlikely to be a key driver of global growth, it is equally unlikely to go into reverse. As the trade economist Richard Baldwin puts it, 'global economic flows are being rewired rather than simply reduced', and this creates a 'transformation of globalisation rather than a retreat from it'. Part of this rewiring is an increasingly important role played by non-aligned countries in global production. As Pierre-Olivier Gourinchas, chief economist at the IMF, has recently pointed out, 'multinational firms responded to trade restrictions on their exports by moving production to countries that belong to neither Western nor China-led blocs and trade freely with both – notably Mexico, Morocco and Vietnam. 'This is an important difference from past episodes of geopolitical fragmentation, like the Cold War, when trade diversion via connector countries was much more limited. One reason for that difference is precisely that the connector countries have already moved up the value chain, benefiting from earlier trade integration.' In other words, the foundations of global integration remain strong, and the existence of non-aligned connector countries will facilitate continued global integration by serving as intermediaries between geopolitical rivals. Gourinchas believes that 'as advanced economies turn increasingly inward, emerging markets have an important stake in fending off global economic fragmentation'. There is also a new set of political actors with an interest in multilateral solutions. In addition to the EU, China and India, the process of globalisation has opened space for 'middle powers' including South Africa, Ethiopia, Brazil, Mexico, Türkiye and Indonesia. The new middle powers now have larger economies and greater global stature and will be permanent features on the global economic stage, with a strong stake in a multilateral, rules-based order. In addition, the oil-rich Gulf states have amassed vast wealth through hydrocarbon extraction and are now expanding their influence globally. Multilateralism could evolve into new forms, such as 'coalitions of the willing' or plurilateral arrangements that achieve consensus on global institutional reforms and invite others to join. Initiatives such as BRICS or African regional institutions might play a vital role in coordinating the response. The G20 and other forums will remain critical in negotiating a new global compact. The challenge of our presidency of the G20 is whether we can adequately propel this process. Africa and global development This multipolar world presents South Africa and the African continent with opportunities to break free from old modes of development, trade, investment and solidarity. New spaces for policy experimentation and autonomous development can be drawn upon. New forms of multilateral cooperation and new partnerships for development might be forged. The global crisis offers an opportunity for change. How will South Africa and the African continent respond? Beyond the rise of China, the wave of the future must certainly be African. Every year, millions of young people in Africa come of age, ready to work, innovate and contribute to their communities and the global economy. Europe's population has begun to decline, and China has also peaked below 1.5 billion people. The UN projects that India's population will peak at 1.7 billion and begin to fall in the decades ahead. By the middle of the century, Africans will number 2.5 billion out of a world population of 10 billion. But Africa has not fared well in the geopolitical shocks of the past two decades, and the narrative of Africa rising has been sorely dented. Now, in a context of falling commodity prices, the combination of slower global growth and higher interest rates has tipped many African countries into debt distress. For others, the rising burden of debt is crowding out vital investments in economic and human development, as noted by Joseph Stiglitz in the recent Jubilee Commission report released by the Vatican. Increased protectionism threatens an abrupt end to market access, including the future of Agoa and the spectre of the European Union's 'CBAM' tariffs. Added to this is the long-term scaling down of overseas development aid and other forms of concessional support from the US and Europe. Africa continues to attract investment into its commodity sectors, but a new scramble for the continent's mineral assets is not only proving destructive to the environment, but also engendering conflict. As growth slows in the rest of the world and the marginal return on investment declines, Africa offers the best prospects for investment and development returns. The most important response to the threat of tariffs has been an intensified focus on regional integration. Africa has made progress with the AfCFTA, but the current crisis must spur much stronger responses. There is a clamour for survival in the context of the current global tariff impasse and inertia in the World Trade Organisation (WTO), where no new market access negotiations are taking place. South Africa should expand its trade to new markets in Asia, the Middle East and Latin America, while strengthening trade and investment relations with North America and Europe. Export diversification can act as an insurance against market concentration and is a source of resilience. China, Africa and the world economy For South Africa and Africa as a whole, the economic implications of China's growth and the consequent reconfiguration of the global economy are somewhat contradictory. China has become a large investor in African development. This is most welcome, but it also means that China is an increasingly large creditor to African governments, with all the potential for tensions and misunderstanding that bedevil debt relationships. Political imperatives for cooperation have, in the past, collided with the global consequences of China's growth model, which is focused on very high rates of investment in physical infrastructure. This has sustained a historic global boom in the prices of primary commodities on which many African states remain heavily dependent. China has also become the leading global producer of labour-intensive manufacturing, and its unparalleled capacity to supply these goods reduces their prices on world markets, making it difficult for other nations to compete. While South African and African consumers benefit significantly from lower prices for clothes and other wage goods, the consequences in terms of employment and de-industrialisation can also be dire. Chinese infrastructure investment is helpful, but often neglects to build local value chains and a stronger development ecosystem. South Africa in the world South Africa is in the unique position of being the largest trading partner in sub-Saharan Africa of the US, China, the European Union and the UK. South Africa is one of the 11 members of the BRICS and holds the presidency of the G20 during a momentous year. Foreign policy can be a powerful motivator of patriotism, bringing South Africans together behind a shared vision. But the recent experience of South Africans spreading disinformation and campaigning against our country is counterintuitive and destructive to the national interest. Our foreign policy must, of course, be grounded on a clear set of values and principles that unite the people of South Africa. These principles are set out in the Constitution, which places democratic values, social justice and fundamental human rights at the core of our approach, alongside healing the divisions of the past. The Freedom Charter articulates the political principles that should inform international relations. The charter specifically calls on South Africa to 'strive to maintain world peace and the settlement of all international disputes by negotiation, not war' and to do so in close cooperation with other African states. These core principles, while fundamentally important, are only half the story. For South Africa, an effective response to the global crisis requires us to be clear-eyed about our own national interest. Ideally, this would be founded on a clear consensus that unites South Africans about our national identity, the path of economic growth and the investments required to overcome South Africa's deep social challenges. Building on a common definition of the national interest, we could then look soberly at the world and identify the opportunities and threats that the world outside presents: Which alliances/partnerships can help us achieve our national goals, including growth and transformation, and our aspirations for global peace, human rights and stability? Who has the technological capacities or resources that are necessary to take forward our national programme? Who can we convince to back our efforts with long-term stable financing on acceptable terms? What military alliances shore up our security and advance our economic expansion? and What posture and active diplomatic strategy is needed to consolidate these partnerships as the world changes? The imperative to actively rewire South Africa's production should have nothing to do with nostalgia or sentiment. We cannot be locked into an imagined ideological struggle that reflects the conflicts of a bygone era. Rather, we should leverage our foreign relations to advance trade and attract capital and investment in South Africa and tap into the growing global markets. Ideally, we should position ourselves as a middle power at the intersection of the supply chains of the West and the East; a stable platform for investment in Africa for all those with capital and good intentions. We should be among the countries, such as Brazil and India, that can leverage their capabilities and historical relations with countries across the geopolitical divide. Our credentials as a democracy, as an open market, as a reliable partner for trade, investment and economic opportunity, and as a good citizen of the world should be unquestionable. We are the most developed platform for investment into Africa, and we must urgently rebuild our reputation as the best and most transparent financial services sector on the continent. Successfully exiting grey-listing will enhance that. We must also ensure a functioning logistical and rail network to transport Africa's goods to world markets. Achieving this will require us to remain resolute in fighting against the forces working to capture the state and repurpose it for narrow and sectarian ends. Beyond this, how should South Africa respond to the current global crisis and position itself in the new world? I suggest we consider the following. Africa and regional responses Other parts of the world have responded to the global crisis by taking bold action to strengthen regional economic blocs. Investing more heavily in cross-border infrastructure and institutions can yield substantial economic benefits. In this context, we must ask serious questions about the versatility of the Southern African Customs Union to respond to current trade challenges and whether this is the optimum moment to work towards its reform. Beyond the region, we need to leverage our strategic position in Africa. We need to champion Africa at global forums, such as the G20, on issues such as debt relief, conflict resolution, health and vaccines, and climate change mitigation. Africans should demand a fair shot to get their manufactured goods and agricultural produce into the markets of the rich world. We should strive to promote better commerce and common interests between key cornerstone economies on the continent. South Africa played a key role in convening the Nepad programme, which brought key nation-states into a programmatic consensus. We could consider a bloc of leading African economies that would link to the regional bodies and customs unions and the African Continental Free Trade Area. Is there a need for a G7-type grouping in Africa? The US Europe and China The US remains a central player in global developments. South Africa's relationship with the US is not merely transactional, but is based on a long partnership rooted in shared values of democracy, justice and progress. In the immediate term, South Africa is engaged in negotiations with the US to reach a solution to the tariff impasse that benefits both parties. More generally, we remain committed to negotiating through the immediate relational crisis. There is also the opportunity for collaboration on issues of mutual interest and concern, such as negotiating lasting solutions in the major conflict zones in the world. EU countries still offer the largest export market for value-added South African products. We need to strengthen ties with the EU, as well as with willing European countries, including the UK, around common interests such as trade and investment, the Just Energy Transition, new forms of multilateralism, African peace and security, African debt and other shared priorities. China may present another partner in the quest to preserve and transform global institutions. South Africa needs to help persuade China to accept stronger multilateral oversight of its role as an international creditor. This should include stronger transparency and more effective support for the creation of a global sovereign debt resolution mechanism. China could both strengthen a rules-based global order and build its partnership with Africa. There should be concerted efforts to negotiate increased access to the Chinese market for South Africa's value-added exports, open credit lines from Chinese institutions, and promote direct investments by Chinese firms that have the potential to substitute for domestic production and reduce Chinese imports on a sustainable basis. Take two examples: First, South Africa is working to ensure that Western powers are aligned behind its Just Transition. To our knowledge, there is no similar effort directed at China, despite its growing role as an international creditor and its dominance of 'green technology' imports. And second, South Africa has a very long history of integration with Western automobile firms' production chains. With the future of automobiles likely to be dominated by Chinese companies, we should strengthen our case for the assembly of Chinese vehicles for the African market. Getting to consensus on foreign policy South Africa is a non-aligned, strategic middle power, balancing national economic interests, upholding principles of democracy, human rights and social justice, and committed to the cause of Africa's development. Like many unequal societies, South Africa struggles to reach consensus over what constitutes national interest. Without consensus, a cacophony of competing sectarian interests will remain dominant and take precedence over the country's needs. We therefore need a stronger state, capable of defining and asserting the national interest. This requires agreement about policy fundamentals in a government which claims the moniker of 'national unity'. In part, this entails improving our agility and resilience on a number of policy fronts and processes. We must not allow our foreign policy to be captured by ideological cliques, partisan political factions, cabals of businesspeople with their own commercial agendas, or foreign powers exerting pressure and seeking to extort us. Instead of uniting around a national response to a global crisis, there has been a deepening of the fault lines that have long divided the nation. This is self-defeating. I have said it before, and I'll say it again: it cannot only be the Springboks that unite this nation. The 63 million people of our country need to know who we are and what we stand for – and should never allow anyone else to decide that for us. DM
IOL News
2 days ago
- Business
- IOL News
Mcebisi Jonas urges South Africa to adapt its foreign policy in response to global economic shifts
Mcebisi Jonas urges Africa to harness its demographic advantage and reform trade policies, warning that rising protectionism and global shifts require bold, coordinated action to secure the continent's economic future. South Africa and the African continent must confront current global economic shifts head-on with a clear-eyed, values-driven, and pragmatic foreign policy that repositions Africa at the centre of global trade and diplomacy, said Mcebisi Jonas, special envoy to the United States. Speaking at a seminar hosted by the Kgalema Motlanthe Foundation on Tuesday, Jonas urged a clear-eyed approach to national interest and a united national vision as the world grapples with imminent US tariffs set to take effect on August 1st. He called for reform of multilateral cooperation and stronger partnerships for development, stating that the global crisis presents 'an opportunity for change.' He urged South Africa and the continent to take advantage of its demographic edge as the world's youth population increasingly shifts toward Africa. 'By the middle of the century, Africans will number 2.5 billion out of the world's population of 10 billion,' he said. 'Of course, the question would be, what do we do with that demographic dividend?' ''The wave of the future must certainly be African," he said, but warned that the narrative of Africa rising has been "severely dented.' Jonas pointed to a combination of debt distress, declining commodity prices, and slowing global growth as key contributors to the continent's economic fragility. Amid these challenges, he warned that increased protectionism, such as uncertainty around AGOA and the EU's Carbon Border Adjustment Mechanism, could severely restrict Africa's access to global markets. 'Increased protectionism threatens an abrupt end to market access, including the possible future of AGOA and the spectre of European Union's CBOM tariffs,' he said.
Daily Maverick
2 days ago
- Business
- Daily Maverick
With Mcebisi Jonas in limbo, SA is dangerously exposed to false US narratives
New challenges have emerged for South Africa's bilateral relations with the US after the House of Representatives' Foreign Affairs Committee passed a resolution calling for a full review of the relationship, which must now pass the House itself. In this context, and amid the little visible progress made by South Africa's special envoy to the US, Mcebisi Jonas, it is particularly concerning that Pretoria still finds itself without a fully accredited ambassador in Washington. Jonas' appointment was intended to stabilise relations after the dramatic expulsion of Ambassador Ebrahim Rasool before the appointment of a new ambassador. However, while Jonas is an experienced and credible figure, well versed in statecraft and economic diplomacy, even the most qualified envoy cannot act if they are not granted access — and by most accounts, Jonas has been unable to even enter the US. Multiple sources have reported that Jonas was denied a diplomatic visa by Washington, effectively grounding the very individual meant to serve as Pretoria's bridge-builder. US officials have been silent on the matter, while South Africa's Presidency has neither confirmed nor denied the reports, but has insisted Jonas is working 'behind the scenes'. This is useful, but diplomacy does not occur behind closed doors alone; it requires presence, visibility, and access. This is especially true in a place like Washington, where decisions are often influenced through informal networking as much as they are through formal negotiation. At the same time the US-South Africa trade relationship and notably our membership of the African Growth and Opportunity Act, Agoa, which enables exporters preferential access to the US market, is also under threat. The Trump administration has been clear about its intention to impose sweeping tariffs on countries across the board, and signalled that Agoa renewal is by no means guaranteed. Key sectors face potentially devastating consequences. Averting further escalation South Africa has proposed a framework agreement to avert further escalation, but implementation requires intensive, high-level engagement in Washington. The issue is not that Jonas lacks competence, but rather that the current arrangement is structurally flawed. A special envoy denied entry to the country he is meant to engage cannot serve as the country's effective diplomatic point person. This is not a reflection on Jonas, but on the untenability of his position. Pretoria must thus urgently consider appointing a new, formally accredited ambassador to the United States — someone acceptable to Washington, with the diplomatic standing to be received at the appropriate levels, and with the political dexterity to navigate what has become an unusually hostile climate. There is precedent for special envoys playing useful behind-the-scenes roles, but these are typically complementary to, not substitutes for, formal diplomatic channels. South Africa's decision not to rush a new appointment may have been calculated. Given the acrimony surrounding Rasool's expulsion, Pretoria has probably sought to avoid appearing to capitulate or endorse the basis for his removal. But that moment has passed. The longer the post remains vacant, the more likely South Africa's absence is interpreted not as defiance, but as disengagement. Ultimately, it sends the wrong signal to its allies, adversaries, and the South African public. It also leaves South Africa dangerously exposed to narratives it cannot contest in real time. US right-wing media and several lawmakers have infamously amplified unfounded claims of a 'white genocide' in South Africa, which then not only entered mainstream discourse but also shaped US policy, culminating in the recent arrival of Afrikaner 'refugees' in the US. Without a strong and present ambassador to push back forcefully, this kind of distortion risks calcifying into accepted wisdom among Washington decision-makers, with South Africa becoming an ideological talking point in a wider culture war it never intended to join. Beyond managing crises, a new ambassador would also be important in shaping what remains salvageable in the bilateral relationship. The US remains a vital trade and investment partner. And Washington, despite its flaws, is still a power that can make, or break, international norms (at least for now). Pretoria has made clear that it will not be bullied into submission, which is both consistent with the ANC's post-liberation foreign policy and broadly defensible in a world where smaller states must assert their sovereignty. But resistance should not and does not mean retreat — strategic diplomacy requires being both principled and present. Re-engagement with Washington should not have to translate into abandoning South Africa's position on multipolarity or Palestine or its relationship with BRICS+, but does mean ensuring these positions are articulated clearly and defended robustly in the arenas that matter. Right now, that defence is not happening. It cannot happen without someone physically in the room. Good faith If the US administration had no ambassador in Pretoria for six months while threatening trade sanctions, few would interpret it as a gesture of good faith. The same logic applies in reverse. The appointment of a new ambassador won't resolve all points of tension. But it will signal seriousness, restore basic diplomatic protocol, and could help in reclaiming some narrative agency. It would also give South Africa the ability to engage Congress, the State Department, and US civil society on its own terms, rather than as a passive subject of increasingly hostile debate. This is not about capitulation. It is about capacity. Pretoria cannot afford to appear adrift. Now is the time to fill that post in Washington to counter those speaking in our place. DM
Yahoo
20-07-2025
- Business
- Yahoo
South Africa coalition strained after trade envoy fails to visit US
By Tim Cocks and Alexander Winning JOHANNESBURG (Reuters) -South Africa's main coalition partners are embroiled in a spat over how to respond to looming tariffs from a hostile Trump administration, after the smaller party said the president's aide was denied a U.S. visa to negotiate with Washington. The Democratic Alliance said on Tuesday that the United States had formally rejected President Cyril Ramaphosa's chosen interlocutor, Mcebisi Jonas, and had denied him a diplomatic visa in May. The DA provided no evidence for the claim, which its leading international relations official Emma Louise Powell repeated in a statement on Thursday. Presidency spokesperson Vincent Magwenya, in a response, did not say whether Jonas had been denied a visa. "President Ramaphosa has not had a need for Mr. Jonas to visit the United States on urgent business," he said in a statement. He added that Jonas had been working in the background with the trade and foreign ministries. Since his appointment in April, the government has not mentioned Jonas as having met with any U.S. officials. He was not part of a delegation that travelled to Washington in May, a trip during which U.S. President Donald Trump assailed Ramaphosa in the Oval Office with false claims of mass killings of white South African farmers. Magwenya declined to comment further when Reuters contacted him on Thursday. Jonas did not immediately respond to a text message requesting comment. The U.S. embassy in Pretoria did not immediately respond to a request for comment. Washington's 30% tariff for South Africa kicks in on August 1. Central bank governor Lesetja Kganyago warned on Wednesday that it could trigger 100,000 job losses. Ramaphosa's African National Congress is furious that the white-led DA, which like Trump has criticised South Africa's racial diversity policies, made an independent visit to the United States earlier this year to plead the country's case to U.S. politicians. The erstwhile enemies forged an unlikely coalition after the ANC lost its outright majority in elections last year. But they have clashed over equity laws, education policy and the budget, which the DA has held up on grounds of corruption and waste. Ramaphosa fired a DA deputy minister for failing to get permission to take part in the U.S. trip. "As the ANC continues to engage with ... the likes of Russia and Iran, the DA will continue to ... engage with the international community of democracies," Powell said in a statement defending the DA's U.S. trip on Thursday.
Reuters
17-07-2025
- Business
- Reuters
South Africa coalition strained after trade envoy fails to visit US
JOHANNESBURG, July 17 (Reuters) - South Africa's main coalition partners are embroiled in a spat over how to respond to looming tariffs from a hostile Trump administration, after the smaller party said the president's aide was denied a U.S. visa to negotiate with Washington. The Democratic Alliance said on Tuesday that the United States had formally rejected President Cyril Ramaphosa's chosen interlocutor, Mcebisi Jonas, and had denied him a diplomatic visa in May. The DA provided no evidence for the claim, which its leading international relations official Emma Louise Powell repeated in a statement on Thursday. Presidency spokesperson Vincent Magwenya, in a response, did not say whether Jonas had been denied a visa. "President Ramaphosa has not had a need for Mr. Jonas to visit the United States on urgent business," he said in a statement. He added that Jonas had been working in the background with the trade and foreign ministries. Since his appointment in April, the government has not mentioned Jonas as having met with any U.S. officials. He was not part of a delegation that travelled to Washington in May, a trip during which U.S. President Donald Trump assailed Ramaphosa in the Oval Office with false claims of mass killings of white South African farmers. Magwenya declined to comment further when Reuters contacted him on Thursday. Jonas did not immediately respond to a text message requesting comment. The U.S. embassy in Pretoria did not immediately respond to a request for comment. Washington's 30% tariff for South Africa kicks in on August 1. Central bank governor Lesetja Kganyago warned on Wednesday that it could trigger 100,000 job losses. Ramaphosa's African National Congress is furious that the white-led DA, which like Trump has criticised South Africa's racial diversity policies, made an independent visit to the United States earlier this year to plead the country's case to U.S. politicians. The erstwhile enemies forged an unlikely coalition after the ANC lost its outright majority in elections last year. But they have clashed over equity laws, education policy and the budget, which the DA has held up on grounds of corruption and waste. Ramaphosa fired a DA deputy minister for failing to get permission to take part in the U.S. trip. "As the ANC continues to engage with ... the likes of Russia and Iran, the DA will continue to ... engage with the international community of democracies," Powell said in a statement defending the DA's U.S. trip on Thursday.
