SA’s links with its fellow Brics members – Brazil, Russia, India and China – have grown exponentially since the country gained membership status in this association of leading emerging economies in 2010. At least that would appear to be the view of government officials and policy makers. But there is one area of conspicuous silence in the Brics agenda — the stock markets.
If the rationale for the formation of the Brics is primarily economic coalition, as it was and is still being argued to be, what concrete evidence is there for growing economic ties? This is especially so for SA, which was a relative latecomer and is the smallest of the economies. Has confidence in SA filtered through to the private sectors of Brazil, Russia, India and China since Pretoria’s entry into the club?
Paying attention to the private sector is an important metric not only for the purposes of measuring the Brics in economic terms (as originally envisioned by Goldman Sachs economist Jim O’Neill), but also as a measurement of the extent to which the relationship has taken on a life of its own and outgrown the relatively top-down political nudging, which can sometimes feel like an arranged marriage.
In fact, the spontaneous and decentralised nature of stock market investment can be taken as a better reflection of the actual confidence levels placed by the Brics countries in SA than the proposed Brics rating agency, which might, as is the nature of ratings agencies in general, miss the mark due to its sometimes arbitrary approach.