The 10th annual BRICS summit has kicked off in South Africa, launching the platform for leaders from Brazil, Russia, India, China and South Africa to discuss issues and topics relevant to these key emerging markets.
The summit’s key point of discussion this year is around the fourth industrial revolution and bridging the digital divide – but various topics from health and tourism to peacekeeping and social issues are on the agenda.
It also provides an opportunity for South Africa to reach out to its BRICS partners for foreign investment, at a time when the local economy is in dire need of a boost.
South Africa tends to be the outlier in the BRICS collective, being the smallest country (in terms of GDP) among its partners in the initiative.
However, when it comes to the spread of wealth (GDP per capita) and its anchor as one of the biggest economies in Africa, it’s understandable why it has a role to play in among the emerging market leaders.
BusinessTech has broken down some of the key economic metrics of South Africa and compared them to its BRICS counterparts, to see exactly where we fit into the picture.
While South Africa is one of the most populous countries in the world (24th largest by latest estimates), it is far off from its BRICS partners by some margin.
The latest data from Stats SA, looking at the mid-year estimates for 2018, South Africa currently has just over 57.7 million people living within its borders. Among the other BRICS countries, Russia is the closest with a population three times bigger at 156.9 million people, followed by Brazil at 209.2 million.
China and India have the biggest and second biggest populations, at 1.39 billion and 1.33 billion people, respectively.
Taking the UN’s projected population growth rates into account, the picture isn’t expected to change that much – the gap is expected to narrow, as Russia and China’s populations decline while South Africa heads to close to 73 million people by 2050.
However, India’s population is expected to blow up to 1.66 billion people, stretching further ahead.
|Country||Current Population||2050 Population|
|China||1.39 billion||1.36 billion|
|India||1.33 billion||1.66 billion|
|Brazil||209.2 million||232.7 million|
|Russia||156.9 million||132.7 million|
|South Africa||57.7 million||72.8 million|
GDP, GDP growth and GDP per capita
South Africa has been struggling with almost a decade of low growth, while other emerging markets have benefited from a rather sizeable growth period.
On top of a low growth rate – which hit 1.5% in 2017 – South Africa is also the smallest economy, by far. According to the IMF, at current rates, South Africa’s GDP output was at $370.9 billion in 2017, compared to the Chinese powerhouse of $14.1 trillion.
In fact, all the BRICS partners, except South Africa, have GDP output in the trillions of dollars.
|South Africa||$370.9 billion||1.5%|
Given the very different population sizes, a better indication of how big or small the economies are is to look at GDP per capita. In this measure, South Africa is still relatively small – but still not quite in the leagues of the bigger players.
Things improve when considering purchasing power parity, but the overall positioning is the same.
|Country||GDP per capita||GDP per capita PPP|
|Russia||$11 950||$28 960|
|Brazil||$10 220||$16 200|
|China||$10 090||$18 070|
|South Africa||$6 460||$13 840|
|India||$2 130||$7 780|
According to Stats SA, average monthly earnings paid to employees in the formal non-agricultural sector decreased from R20,060 in November 2017 to R19,858 in February 2018 – though this was up 5% year on year from R18,913 in February 2017.
Expressed as an annual salary, this equates to R238,300 a year – or $17,105 in dollar terms.
In China, the average monthly salary for white-collar workers is 7,629 yuan a month; Russia pays 48,540 rubles a month ( a year); Brazil pays 2,187 real a month; and India pays around 270 rupees a day, on average.
This is how the annual salaries compare at current rates:
|Country||Local salary||In USD|
|South Africa||238 300 rand||$18 030|
|China||91 548 yuan||$13 530|
|Russia||582 480 ruble||$9 252|
|Brazil||26 136 real||$6 974|
|India||98 550 rupee||$1 434|
Taking purchasing power parity into account, however, changed things significantly.
South Africa has a local purchasing power almost twice the value of the US$ – a fair value exchange of R6.25 to the dollar, according to the IMF (2018). That means that the R238,300 average annual salary in South Africa is equal to $38,128 in PPP dollar terms.
Using the same method for the other BRICS nations’ averages, we have the following:
|Country||PPP rate||USD PPP|
|South Africa||6.25||$38 128|
The final key indicator to compare is the health of South Africa’s workforce compared to the other BRICS nations. South Africa has a notoriously and stubbornly high rate of unemployment, even by the narrow definition, and getting progressively worse as you look wider.
This limits the country’s capacity to reach higher levels of growth – and is one of the key topics being discussed in this week’s BRICS meetings.
South Africa’s unemployment crisis is only further highlighted when looking at employment rates in the other BRICS countries – while India and China have massive populations, they manage to have low unemployment rates.
Russia and Brazil, with smaller populations, though still significant, also have unemployment levels far lower than South Africa. South Africa, with the smallest population in the grouping, has an unemployment rate two times higher than its closest BRICS counterpart.
|Country||Current Population||Unemployment rate|
|South Africa||57.7 million||26.7%|