analysisBy Azwimpheleli Langalanga
The Group of 20 (G-20) was formed in 1999 after the Asian financial crisis of 1997-1998. It was formed by the world's most influential countries with a view to reforming the global financial architecture, with the intent that this would prevent a similar crisis happening in future. The G-7 would emerge to be the nucleus of the G-20 grouping. In order to arrive at twenty members the remainder had to be selected from economies which were influential in terms of size and/or geopolitical significance.
It is in this context that Argentina - whose economy was doing quite well at the time - was chosen as one of the members of the G-20 group, as David Hale rightly points out in a recent article published on this website. South Africa was also identified as a suitable member of the grouping due to having the largest and most sophisticated economy in Africa. Its particularly sophisticated financial services sector also made it a natural choice for the G-20 grouping. Over and above this, South Africa became a member of the G-20 for geopolitical reasons. It was seen as being able to easily play a gateway role into the continent and also articulate issues on behalf of the continent.
In making an assessment of South Africa's continued relevance to this mega grouping vis-a-vis Nigeria's potential candidature and Argentina's perceived redundancy it is prudent to be guided by the foregoing factors.
A lot has indeed changed since the formation of the G-20: September 11 happened; the Argentinian economy went through a rough patch; South Africa won the bid to host the Fifa Soccer World Cup and did so it against all pessimism. Mbeki was recalled as South Africa's president.
But has anything changed to warrant South Africa's replacement in the G-20 by Nigeria and in addition Argentina's removal? I argue the negative. Argentina should rather be helped to recover from its crisis instead of being expelled from the grouping.
To expel it would undermine the whole idea behind the G-20's formation. Instead, Argentina's membership of the G-20 should be utilised to steer it in the direction of better democratic governance and trade liberalisation. This could be done through peer pressure within the group. Australia, instead of focusing on the relevance of some members in the group, could instead put good governance and trade liberalisation on the agenda and use the opportunity to place Argentina in the spotlight. Furthermore, singling Argentina out would seem odd as there are other culprits within the grouping, such as China which manipulates its currency, Russia which has governance issues, and not to mention members such as Saudi Arabia which is an absolute monarchy. Before Argentina is taken to task about its indiscretions, caution must be taken that focusing on its failings could open a Pandora's box with respect to some other key G-20 members who are also not faring well in such areas.
It is a bit disconcerting to note that Hale sees market liberalization as a condition sine qua non for G-20 membership. He lauds Nigeria for engaging in Washington Consensus, Chicago School-type of economic reforms. This is a paradox as the G-20 was formed to reform the global financial architectural institutions and protect the market from itself.
What the financial crises have taught us is that the state still has a role to play even in a market economy. To benchmark Nigeria's success on privatisation may therefore be deemed to be flawed. Nigeria further suffers from rampant corruption. It has virtually no institutions to support any kind of democracy. In 1995 the military elites simply donned civilian garb and ran for elections. No one has bothered to build the institutions necessary to sustain a credible 21st-century democracy. Nigeria is literally waiting for its Mandela moment before it builds a true democracy. This and many other socio-economic challenges facing Nigeria such as rampant poverty, lack of infrastructure, and religious extremism make it a ticking time bomb which cannot qualify for G-20 membership, let alone displace South Africa as a leader in Africa.
South Africa in contrast to Nigeria has all the reasons to remain within the G-20 club. Its economy has grown substantially since 1999. It was able to host a successful soccer world cup and preparations for the tournament brought infrastructural development and goodwill. South Africa's democratic institutions have grown strength by strength. The recall of President Mbeki from office and the smooth handover bore testimony to the resilience of the very young democratic culture. The recall of a sitting president in Nigeria would have plunged not only the country but possibly the whole region into conflict. While the ascendancy of President Zuma has undermined the goodwill towards the country and sought to threaten its democratic institutions it has not permanently damaged its institutions in general. Ironically, the institution of the Public Protector has fared quite well under his stead, even though it is not what he intended.
Given its strong democratic and institutional culture and uniquely sophisticated finance sector South Africa remains Africa's most viable choice for G-20 membership. Nigeria could best learn from South Africa not only with respect to developing a democratic culture and institutions but devising and running a modern 21st-century economy.
Azwimpheleli Langalanga is an intern with the Economic Diplomacy Programme at the South African Institute of International Affairs.