The Russians are coming... at last
Peter van der Merwe
His visit not only heralded a new era of economic and diplomatic cooperation between the two countries. It also gave an indication of South Africa’s growing influence on the international stage, as President Mbeki will be looking to his Russian counterpart to support South Africa’s bid for a permanent seat on the UN Security Council.
Mbeki and Putin have also interacted previously at G8 summits, where Russia, as the current chair of the G8, has been forced to pay particular attention to Africa’s development agenda.
Still, given the ruling ANC’s close ties with Moscow during the liberation struggle, it was probably surprising that it took so long for a Russian leader to visit the southernmost tip of Africa.
For older generations of South Africans, Putin’s visit evoked mixed feelings. For decades, white South Africans lived in perpetual fear of a Communist onslaught. Gorged on a steady diet of propaganda, hundreds of thousands of young white men were conscripted into the apartheid army to fight the Red demons who were, we were told, waiting on our borders.
For black South Africans, the memories were different. Moscow was one of the key backers of the ANC in the years of the struggle for freedom. Many former ANC activists, including President Thabo Mbeki, underwent military training in the Soviet Union.
In a nostalgic radio interview in Johannesburg, current South African Intelligence Minister Ronnie Kasrils — who is affectionately known as Red Ronnie to this day for his communist background — said the Kremlin had been the main source of support for the ANC and South Africa’s ultimate liberation.
But South Africa and Russia have far more in common than a shared history. Their path to democracy has followed a similar timetable since the early 90s, with both countries coming through immense change to establish themselves as two of the world’s largest emerging economies.
And when one puts aside the warm and fuzzy emotions, the lasting legacy of last month’s visit will be in the economic realm. To put it bluntly, Mr Putin’s main focus was on strengthening economic relations with the government in Pretoria.
He was, after all, accompanied by a large business delegation — some 100-strong, in fact. South Africa and Russia are eyeing a vast range of business opportunities that will almost certainly lead to a dramatic expansion of bilateral trade, and the visit looks set to precipitate multi-billion dollar investments in local industry by Russian business.
Early indications are the long-term projects under consideration are in fields like mining, energy, aluminium smelting, the supply of nuclear fuels for peaceful purposes, agriculture, chemicals, oil and gas, and military technology, among others.
There is currently a large trade imbalance between the two countries. South African exports to Russia amounted to $106mn last year, but imports from Russia only totalled $18mn.
The current trade figures reflect the immense potential that already exists. South African fruit exporting company Capespan exports more fruit to Russia than it does to the UK, one of its traditional key markets.
Other South African multinationals looking to step up their presence in Russia include mining behemoth Anglo American, diamond company De Beers and Standard Bank, who already have substantial interests. Global brewer SAB/Miller has also established a brewery in the Kaluga Region, representing an investment of some $100mn.
By the same token, growing numbers of Russian companies are looking to South Africa. Russia’s largest steel-maker, Evraz, has already set its sights on a bigger stake in
one of South Africa’s bigger companies, Highveld Steel. They would follow fellow-Russians Norilsk Nickel, who two years ago bought a 20 percent share in the South African gold producer Goldfields.
The Russians are no doubt conscious of China’s move into many areas of sub-Saharan Africa. The scramble for raw materials is hotting up, and South Africa can take a goodly slice of the pie if it plays its cards right.
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