Consolidating a 'look east' policy under President Zuma?

Now that the adrenalin rush has reached manageable levels, most observers and commentators have cast their eyes towards the new cabinet of President Zuma. As anticipated, President Zuma has crafted a mixed cabinet. This is one which undoubtedly balances a strong centre in the form of the newly constituted National Planning Commission – under the leadership of Minister Trevor Manuel – and a developmental state agenda that dovetails with realigning ministries to become more focused on the micro-perspective of effective governance and efficient socio-economic service delivery as the primary goals. The new cabinet, indeed, reinforces what most observers have argued, namely that President Zuma will not be a foreign policy president like his predecessor but rather one who emphasises a more inward-looking focus on domestic challenges. After all, it was the bread-and-butter issues of the majority of the electorate that gave the African National Congress (ANC) its overwhelming mandate at the polls.

SO WHERE DOES THIS LEAVE SOUTH AFRICA’S FOREIGN POLICY UNDER THE ZUMA PRESIDENCY?

Well, some may argue that it is in a state of increased obscurity, starting with a minister who is not a political heavyweight and who cannot boast the same kudos as her predecessors. Maybe, but perhaps this is being slightly unfair to the new minister who is yet to demonstrate her diplomatic capabilities and is even more unfavourable to a foreign policy, one which under Mbeki was caught between platitudes, lofty ideals and what Professor Gerrit Olivier notes as a kind of ‘supermarket [with"> lots of action, global and regional in reach, complex agendas, a bit of everything, but no real thrust and achievement, no cutting edge, no lasting legacy’.

http://www.pambazuka.org/images/articles/428/aid_to_africa_naidu.gif

One thing is certain: there is no substantive uncertainty in South Africa’s foreign policy under President Zuma. As the new Minister of International Relations and Cooperation Maite Nkoana-Mashabane indicated in her first press conference:

‘We will continue to prioritise Africa because we are in Africa. We will continue to engage with African countries, including Zimbabwe, in pursuit of Africa's development… In pursuit of these objectives, South Africa recognises that its destiny is inextricably linked to that of the developing world in general and to the African continent in particular.'

And so it is clear that South Africa’s foreign policy identity will remain the same, with Africa as the pivot and consolidating South–South cooperation as the framework through which a developmental agenda will be pursued based on strategic and mutual development cooperation .

IT WOULD SEEM THAT WE HEARD THIS ALL BEFORE. SO WHAT WILL BE DIFFERENT THIS TIME?

From a cursory level it would seem not much. Yet developments over the past few days seems to indicate that consolidating South–South dialogue entails a more focused 'look east' policy.

Harnessing South–South cooperation, and in particularly, strengthening ties with southern heavy weights like China and India is a strategic pulse in Pretoria’s global agenda. This is no surprise as President Zuma visited China and India as part of his presidential endorsement. In geo-political terms this was a strategic diplomatic play by President Zuma and a clear indication that South Africa’s foreign policy will be calibrating and entrenching a look east policy.

Of course some opponents among us would be quick to point out that pushing for a greater alignment with Beijing and New Delhi is not surprising since it was rumoured that the ruling governments in both countries had financially backed the ANC’s election campaign. While it may seem like President Zuma now has to put his money where his mouth is (even if he has emphatically said that he doesn't owes anybody anything), it cannot be denied that China and India are going to be significant actors in the type of development agenda the Zuma presidency wants to pursue.

For a start President Zuma has a mammoth task at home to deliver the right kind of policy mix, one which will have to be underscored by a durable focus on socio-economic reconstruction and which aims at creating opportunities for decent work and a better skilled base economy. The Zuma administration’s enhanced strategic linkages with China and India will therefore be focused towards attracting foreign direct investment (FDI) from China and India in whatever form, especially considering the current global uncertainty surrounding the credit crisis.

And so the recent Industrial Development Corporation (IDC) US$50 million loan from the China Construction Bank is perhaps a step in this direction. As much as the loan will be to recapitalise the IDC’s lending book, it is also a way for money to be pumped into South Africa’s domestic infrastructure market as well as its continental projects.

But this loan must be seen in the context of the fact that China probably wants to diversify its risk portfolio. By lending to the IDC the Chinese government is probably very aware that this could be another way to indirectly fund projects in the continent. In this way, supporting the financial packages of state-led agencies like the IDC and the Development Bank of Southern Africa not only enables the Zuma presidency to see some of that money being invested into South Africa’s domestic environment, but also assists in tying the agenda of the developmental state to broader development priorities in Africa.

Second, with China’s global prowess and influence being interpreted in certain policy quarters as superpower qualities, it would be easy to assert that in this look east policy China may be the preferred partner, one which will enjoy the status of most favoured nation. As much as China will push its engagement with South Africa and vice versa, the Zuma presidency, hopefully, will be much more strategic and pursue rational choices in its assessment.

In this regard India’s experience in science and technology, small, medium and micro enterprises, its alternative pharmaceutical industry and IT, as well as the commercial experience that South African and Indian initiatives can gain within research & development (R&D), will surely be much more valuable for reversing South Africa’s domestic development challenges. And here is India’s comparative advantage over China.

But India can also become a hunting ground for South African corporates. Already we have seen that one of South Africa’s four big banks, FirstRand, has surged ahead and opened its first office in Mumbai. Probably not to be outdone by the Standard Bank – ICBC Deal, FirstRand will want to tap into India’s commercial banking sector to become an important intermediary for an Indian private sector seeking to push ahead with investments in the African continent.

And so 'looking east' does hold benefits for the Zuma presidency and especially for business elites from all three countries. This would certainly be reflected as South African, Chinese and Indian corporates seek to consolidate their interests across the continent.

Already MTN, one of South Africa’s biggest cellular service providers in Africa, is investing US$700 million in the submarine cable system, the European-India Gateway (EIG), while China’s Huawei Technologies is laying the fibre-optic cables for the Zambian telecommunication company Zamtel to connect six southern African countries, which is linked to the eastern African submarine cable system and also links up to the EIG.

But these interests need to intersect with more than just a business focus. As was revealed at the recent African Development Bank annual meeting in Senegal, while increased trade and investment with China and India have the ‘potential to follow a commodities based industrialization path’, it was agreed that there needs to be a more coherent and transparent African strategy which pushes for a rules-based system of engagement around investment practices and development impacts.

Similarly for the Zuma presidency, while China and India may be seen as viable partners, this has to endure a much more open system regarding what this engagement entails and better communication around what impulses inform the greater synergy with Beijing and New Delhi.

We have already had the new minister make a u-turn on the Dalai Lama fiasco. But it is not clear how the Disney-style cultural amusement park which the Chinese company Huaqiang Holdings, in cooperation with the China Development Bank, China-Africa Development Fund and the Industrial Development Coporation, wants to build in South Africa at a cost of US$250 million will actually address South Africa’s development challenges. Perhaps the new minister and her renamed ministry along with the Department of Trade and Industry can explain the development impact this project would have.

Therefore as President Zuma’s consolidates his foreign policy outlook in Africa, China and India will be seen as strategic partners, especially in post-conflict reconstruction societies like Zimbabwe and with those countries with their own look east policy. While President Zuma will consider this critical for Pretoria’s renewed interest in pushing a peace, stability and development identity in Africa, it will be significant to see what type of relations the Zuma presiency achieves with countries like Russia that are beginning to reassert themselves in Africa, and more specifically within the Southern African Development Community (SADC).

* Sanusha Naidu is the research director of Fahamu's China in Africa programme.
* Please send comments to [email protected] or comment online at http://www.pambazuka.org/.