Keywords: South African economy, foreign economic relations, BRICS, SADC, Russia-South Africa

A strategically important geographical location, a leading role on the African continent, a fairly high (even by international standards) level of economic development, and a wealth of natural resources are all important factors that determine the development prospects of the Republic of South Africa (RSA).

The end of apartheid in 1994 led to an improvement in the South African economy. This happened both as a result of the stabilization of the political situation in the country and as a result of the lifting of the international sanctions regime.

SOUTH AFRICA'S POST-APARTHEID ECONOMY

Thanks to the new Government's balanced policy, the costs of the transition period were negligible. While the average annual growth rate was 0.8% between 1985 and 1994, the economic growth rate of the Republic of South Africa increased to an average of ^3.1% between 1995 and 2004.1

At the same time, the South African economy still remains ambivalent, due to the long period of the apartheid regime. South Africa has a highly developed "official" economy, on the one hand, and an underdeveloped "informal" economy, on the other. The former has a modern technological base and infrastructure, while the latter demonstrates huge unrealized opportunities, especially in terms of using human resources. According to some estimates, the informal economy accounts for about 30% of South Africa's GDP.²

Over the past 30 years, the structure of South African GDP has undergone some changes (see Table 1).

Traditionally, it was the mining industry that played a leading role in the country's economy. Despite the fact that this sector of the economy was significantly affected by the fall in commodity prices during the last global financial and economic crisis, it continues to play an important role in the economy of South Africa, as other industries largely depend on the supply of raw materials and export revenues of the mining industry.

Significant structural changes have also affected the manufacturing industry in South Africa. If earlier this industry specialized in primary processing of raw materials, today the range of products of the country's manufacturing industry is much more diverse. In terms of a number of technologies, South Africa occupies a leading position in the world. In particular, the South African company Sasol is a world leader in synthetic liquid fuel production technologies. In addition, South Africa is one of the leaders in the use of biotechnologies in the mining and metallurgical industry.³

South Africa's agriculture also retains a dual character: semi-natural farming is maintained in parallel with the developed commercial sector. Although there is a reduction in the share of the agricultural sector in GDP, the industry not only provides food to the country, but also produces a wide range of products for export. Its main articles are wine, oranges, corn and grapes ⁴.

The level of development of the South African financial system is high not only by the standards of Africa, but also by the standards of leading Western countries. For example, according to the Global Competitiveness Report for 2013-2014. World Economic Forum (WEF), South Africa ranks 1st in the world in stock market regulation and 3rd in financial market development ⁵. The latest global financial and eco-

Table 1

Structure of South African GDP in 1994 and 2014 (%)

Рассчитано по: Du Plessis S., Smit В. South Africa's growth revival since 1994 // University of Stellenbosch: Stellenbosch Economic Working Papers, 2006, p. 8; South African Reserve Bank Quarterly Bulletin No 274. June 2015. S-109.

The article was financially supported by the Russian State Scientific Foundation. Project N14-07-00026 "Defining factors for achieving the African Development Goals in the 21st century".

The economic crisis has shown that the South African banking sector is very resilient. South African banks survived the 2008 crisis without significant losses -not a single major bank turned to the government for help.

CURRENT STATE AND DEVELOPMENT TRENDS

FOREIGN ECONOMIC RELATIONS

In the 1980s and early 1990s, the share of foreign trade turnover in South Africa's GDP declined significantly (from 56% in 1980 ^to 33.1% in 1992.6), which indicated the negative impact of international sanctions on the dynamics of the country's foreign trade. After their abolition in the early 1990s, there was a rapid increase in foreign trade turnover, and by the mid-2000s, South Africa actually reintegrated into the world economy. There was a diversification of raw material exports (the share of gold decreased) and the share of industrial minerals increased (see Table 2). However, South Africa became more dependent on the situation on world markets, which was especially pronounced in the context of the global financial and economic crisis.

In 2009, South Africa's foreign trade turnover declined significantly due to the global crisis, which negatively affected all key export items. Exports of steel products were most affected by the decline (a 31% drop from 2008 to 2009).⁷. At the same time, exports of minerals declined not so significantly (a 13% drop in precious metals and precious stones and a 5% drop in other minerals).⁸ due to high demand for raw materials (primarily from the PRC).

The main export items of South Africa (in 2014): cars and spare parts - 95 billion South African RAND*, iron and steel-75 billion, iron ore and concentrate-74 billion, platinum -71 billion, bituminous coal-54 billion rand. The main import items are: oil - 176 billion rand, electrical equipment and parts for it - 105 billion, chemical products - 102 billion, automobiles and spare parts for them - 89 billion, petroleum products-63 billion. There are ⁹ rands. Trade balance - negative (since 2012) ¹⁰.

In 2010, South Africa's foreign trade turnover was $166 billion. in 2011 - $203 billion, in 2012 - $195 billion, in 2013 - $199 billion, and in 2014 - $183 billion 11^.

In the past (in the 1980s), the main South African trading partners were the European Union (mainly the United Kingdom and Germany) and the United States. But over the past 20 - 30 years, their importance in South Africa's foreign trade has significantly decreased - if in the mid-1980s, half of South Africa's foreign trade turnover was accounted for in Western Europe12, now only a quarter-13 (see Table 3). This is primarily due to the rapid expansion of South Africa's trade with Asian and African countries. Analysis of trends in the geographical distribution of South African foreign trade relations leads to the conclusion that the country's foreign trade is significantly diversified ¹⁴.

By the early 1990s, the amount of foreign capital invested in South Africa was extremely low due to sanctions against the apartheid regime. Total foreign direct investment (FDI) inflows to South Africa from

Table 2

South African export structure (1994 and 2014)

Рассчитано по: SA Export Value HS8 (Annual) // Department: Trade and Industry, Republic of South Africa.

* $1 - 12.9 South African rand (as of 19.08.2015).

Table 3

Geographical structure of South African trade (2014)

Рассчитано по: SA Export Value HS8 (Annual) // Department: Trade and Industry, Republic of South Africa; SA Import Value HS8 (Annual) // Department: Trade and Industry, Republic of South Africa.

From 1980 to 1993, it amounted to just over $300 million ¹⁵. But since 1994, FDI has grown rapidly. In 1994, their inflow exceeded $300 million, and in 1995 it reached $1 billion.¹⁶ The arrival of the new government has led to the disappearance of political uncertainty. This, together with a more balanced economic policy, helped attract foreign investment. In 2014, FDI inflows to South Africa totaled $6 billion, ¹⁷ bringing the total amount of accumulated FDI to $145 billion.¹⁸

In the early 1990s, capital outflows from South Africa were very limited. But since the second half of the 1990s, there has been a sharp increase in South African investment in other countries (accumulated FDI rose from $²³ billion in 1995 to $134 billion in 2014,19). This was largely due to the liberalization of state regulation of capital export, which began in 1997 and in 2004 led to the final lifting of restrictions on companies to export capital.²⁰

At the same time, the distribution of accumulated South African FDI has changed dramatically since the mid-1990s: the share of Western Europe was then almost 90%, and by the end of 2013 - only 34%. Over the same period, Africa's share of South Africa's FDI increased from 4% to 17% ^.21

In other words, in recent years, South African companies have significantly diversified their investments abroad, significantly reducing the share of their investments in European countries and increasing them in Africa and Asia.

PROSPECTS FOR COOPERATION BETWEEN RUSSIA AND SOUTH AFRICA

Currently, the economic potential of bilateral relations between South Africa and Russia remains unrealized. Russia's share in South Africa's foreign trade turnover is extremely small compared to other countries and amounts to less than 1% ²². Although recently, the volume of trade between the two countries has increased significantly: from $366 million in 2010 to $604 million in 2012, $751 million in 2013 and $787 million in 2014. At the same time, until 2014, exports from South Africa exceeded imports: in 2012 - $410 million against $194 million, and in 2013 -$388 million against $363 million. But in 2014, there was a trade surplus with South Africa (Russia imported $348 million from South Africa and exported $439 million) ^.23

The main export items from South Africa to Russia in 2014: trucks with a gross weight of no more than 5 tons - 642 million rand, oranges - 572 million, other fruits-907 million, manganese ore and concentrate-644 million, flat rolled products made of corrosion-resistant steel with a width of at least 600 mm-308 million rand. And imports from Russia to South Africa (2014): wheat - 2959 million rand, copper wire with a diameter of more than 6 mm-652 million, nitrogen fertilizers-265 million, synthetic rubber-202 million, anthracite-120 million rand ²⁴.

Russian companies operating in South Africa include the Re-Nova Group of Companies, which in 2005, together with its South African partners, founded the United Manganese of Kalahari (UMK) company for the exploration, production and processing of manganese ores in the Kalahari basin.²⁵

An exploration license for the 15,200-hectare Kalahari Desert manganese deposit was obtained in 2005.26 In ^February 2008, a license was obtained for the next stage of development of the deposit under this project.27 and ore production began in March 2011.28 By 2011, the total investment in the launch of the new mine was $200 million.

The project produced 1.5 million tons of manganese ore in 2012 and 3.4 million tons ⁱⁿ 201329. Ore is exported through three ³⁰ seaports-Ngkura to Port Elizabeth, Durban and Saldanha.

To process the extracted manganese ore, the Transalloys plant for the production of silico-manganese alloys, which is fully owned by Renova, was built.³¹

Some progress is also being made in other areas. In 2012, Rosatom opened a representative office in South Africa, and in November 2013 announced its readiness to build up to 8 power units in South Africa.³²

If the South African authorities agree to this proposal, Rosatom is ready to attract local South African companies to perform up to 60% of the work during the construction of new nuclear power plants and, thus, bring the South African industry to a new level. At the same time, the localization level should be 30% for the construction of 1-2 power units and 60% for the construction of 7-8 power units ³³. South African companies will also be able to participate in the construction of nuclear power plants in other countries.-

first of all, in Africa), turning South Africa into the future "nuclear hub" of Africa.

The projected cost of the full implementation of the Rosatom project should be $50 billion. According to the plans, the construction loan will be covered for 15-25 years (depending on the tariffs).

The implementation of projects for the construction of nuclear power plants will also allow attracting other companies from Russia to South Africa, which will act as contractors for Rosatom to perform construction and engineering components.

Today, Rosa-Tom is the only company in the world that offers South Africa a full cycle of nuclear power. Rosatom's competitors do not control many aspects, being dependent on contractors ^and subcontractors34.

The estimated operational life of Rosatom's nuclear power plant should be 60-70 years. Moreover, theoretically, the service life can be extended up to 100 years ³⁵.

Apparently, Rosatom (along with the French concern Areva) has the best chances of obtaining a contract for the construction of new nuclear power plants in South Africa.

Other competitors of Rosatom are the American company Westinghouse (which belongs to the Japanese Toshiba), the Chinese CGN (Chinese Nuclear Power Group) and the South Korean KERSO (Korean Electric Power Corporation).³⁶.

SOUTH AFRICA AT THE GLOBAL AND REGIONAL LEVELS

As a country with one of the largest economies on the continent (25% of GDP in sub - Saharan Africa ³⁷), South Africa is the "locomotive" of the African economy, as well as a gateway for investment in sub-Saharan Africa. At the same time, South Africa has the greatest impact on the economies of Southern Africa.

It can be argued that for African countries (and especially Southern Africa), cooperation with South African companies and their subsidiaries is more convenient than relations with European and American corporations. Good knowledge of local conditions and an extremely important factor - geographical proximity-give South Africa an important advantage in competing with developed countries for African markets and, in particular, the markets of neighboring countries.³⁸

South African investors are very active in Africa. For Southern Africa and many other African countries, South Africa is a major source of foreign investment. Such investments create jobs, are used to train local personnel and replenish the state treasury through taxes and licensing fees. In addition, South African business investment, especially in infrastructure, has helped improve the business environment in a number of recipient African countries. Investments by South African firms, such as MTN and Vodacom, have greatly improved the telecommunications system in Africa.

As noted by Nigerian researchers A. Ezeoha and C. Uche, by providing telecommunications services to users who previously did not have access to them, these South African telecommunications companies undoubtedly had a positive impact on the overall business and economic landscape in their respective countries.³⁹

The rapid expansion of South African business resulted in South Africa becoming the largest source of new FDI to Africa40 in 2000, and it is now one of the leaders in terms of accumulated FDI in Africa ($22.1 billion). at the end of 2013) ⁴¹.

The South African Government has consistently sought to strengthen its position in Africa by participating in regional integration processes.

Since 1994, South Africa has been a member of the Southern African Development Community (SADC), the most successful and influential African regional organization with 15 countries.

After South Africa's accession to SADC, a qualitatively new economic situation emerged, although the remaining members stipulated that economic cooperation would be equal and SADC would not allow South Africa to play a dominant role in the Community.⁴² However, it is difficult to expect South Africa to occupy a position equivalent to other SADC members, since its GDP is one and a half times higher than the combined GDP of the rest of the Community.⁴³

South Africa was one of the initiators of the creation of the African Union (transformation of the Organization of African Unity (OAU) into the African Union). At the first African Union (AU) summit in 2002, it was South African President Thabo Mbeki who became the organization's first chairman. And in 2013, N. Dlamini-Zuma, formerly a member of the Cabinet of Ministers of South Africa, became the Chairman of the AU Commission.

In general, participation in integration groupings gives South Africa great opportunities to increase its economic and political influence on the continent. The country actively participates in integration processes not only at the regional, but also at the interregional level.

South Africa has made significant progress in international economic relations. There are agreements between the Southern African Customs Union (SACU) and MERCOSUR (MERCOSUR - Mercado Comun del Cono Sur) and the European Free Trade Association (EFTA).

In North-South economic relations, the main role for South Africa is played by the trade agreement between South Africa and the EU and the African Growth and Opportunity Act (AGO) adopted in the United States. With regard to economic cooperation with developing countries, South Africa participates in the IBSA Dialogue Forum (India - Brazil - South Africa). After the formation of this group, South Africa's trade turnover with India and Brazil increased many times ⁴⁴.

South Africa's important international status is also confirmed by the fact that it is the only African country that is part of the Group of Twenty and claims to be a representative of Africa's interests.

In 2011, when South Africa joined the BRIC, the BRICS Group was established. Participation in it contributes to the formation of South Africa as a global player and increases the importance of the group as a whole.

a representative of developing countries. This also opens up new opportunities for South Africa to cooperate with Russia and, under certain conditions, to expand Russia's position in Africa.

* * *

In the near term, the South African economy will continue to dominate other economies in Southern Africa and the entire African continent in a number of ways.

In the future, we should expect South Africa to deepen its South-South economic cooperation, in particular within the framework of the IBSA Forum and the BRICS Group. It is possible to predict an increase in the importance of developing countries of the South as trading partners of South Africa against the background of a relative decline in the importance of Western countries.

There are objective opportunities for further expansion of economic ties between Russia and South Africa in various areas. Russia is most interested in cooperation in the field of nuclear energy, but it is also possible to expand cooperation in other areas, primarily in the agricultural sector, the development of new technologies, mining and infrastructure projects.

^{Du Plessis S., Smit B.} 1 South Africa's growth revival since 1994 // University of Stellenbosch: Stellenbosch Economic Working Papers, 2006, p. 3.

² Topic: Informal Economy // The South African LED Network -http://led.co.za/topic/informal-economy

^{Skubko Yu. S.} 3 South Africa on the way to the Knowledge Economy: science, universities, innovations, Moscow, Institute of Africa of the Russian Academy of Sciences, 2011, p. 90. (Skubko Yu. S.2011. YuAR pa puti k ekonomike znaniy: nauka, universitety, innovatsii. M.) (in Russian)

⁴ Данные SA Export Value HS8 (Annual) // Department: Trade and Industry, Republic of South Africa - http://tradestats.thedti.gov.za/TableViewer/tableView.aspx

^{Minney T.} 5 South Africa's JSE again beats the world on regulation -how they do it // African Capital Markets News, 02.10.2013.

⁶ Merchandise trade (% of GDP). South Africa // World Bank.

⁷ Calculated using SA Export Value HS8 (Annual) data...

⁸ Ibid.

⁹ SA Export Value HS8 (Annual)..; SA Import Value HS8 (Annual) // Department: Trade and Industry, Republic of South Africa -http://tradestats.thedti.gov.za/TableViewer/tableView.aspx

¹⁰ Вычислено по данным: SA Export Value HS8 (Annual)..; SA Import Value HS8 (Yearly) // Department: Trade and Industry, Republic of South Africa.

¹¹ Вычислено по данным: SA Export Value HS8 (Annual)..; SA Import Value HS8 (Yearly)..; Yearly Average Currency Exchange Rates // Internal Revenue Service - http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange- Rates

^{Cherkasova I. V.} 12 Vneshneekonomicheskie svyazi / / Yuzhno - Afrikanskaya Respublika: Spravochnik. M., Institut Afrika RAN, 1994, p. 187. (Cherkasova I. V. 1994. Vneshneekonomicheskie svyazi // Yuzhno-Afrikanskaya Respublika: Spravochnik. M.) (in Russian)

¹³ SA Export Value HS8 (Annual)..; SA Import Value HS8 (Yearly)...

¹⁴ Ibidem.

^{Arvanitis A.} 15 Foreign Direct Investment in South Africa: Why Has It Been So Low? Chapter 5 // Post-Apartheid South Africa: the First Ten Years. Edited by Nowak M., Ricci L.A. Washington: IMF, 2006. p. 65.

¹⁶ South Africa, Foreign Direct Investment, net inflows // World Bank - http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?page-3; http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?page=4

¹⁷ South Africa, Foreign Direct Investment, net inflows // World Bank - http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD

¹⁸ Country fact sheet: South Africa. World Investment Report 2015 // UNCTAD - http://unctad.org/sections/dite_dir/docs/wir2015/wirl5_fs_za_en.pdf

¹⁹ Ibidem.

²⁰ South Africa's outward FDI policy: emphasis on Africa // World Investment Report, UNCTAD, 2006, p. 207.

^{Sapuntsov A. L.} 21 Foreign expansion of South African TNCs// Asia and Africa today. 2007, N 8, с. 37. (Sapuntsov A.L. 2007. Zarubezhnaya ekspansiya TNK YuAR // Aziya i Afrika segodnya. N 8) (in Russian); calculated from: South African Reserve Bank Quarterly Bulletin No. 276. June 2015. S-96 - 99.

²² Calculated from: SA Export Value HS8 (Annual)..; SA Import Value HS8 (Yearly)...

²³ Ibidem; Yearly Average Currency Exchange Rates // Internal Revenue Service.

²⁴ SA Export Value HS8 (Annual)..; SA Import Value HS8 (Annual)...

²⁵ Renova launches manganese mine in Kalahari Desert // Metallindex, 23.03.2011 - http://www.metalindex.ru/news/2011/03/23/news_29548.html About the mining industry of South Africa - Information Bulletin of the Mayor of the Russian Federation // Metaltorg.ru, 10.11.2008 -http://www.metal-torg.ru/analytics/publication/index.php?id=3207

²⁶ On the mining industry in South Africa...

²⁷ Ibid.

²⁸ Renova launched a manganese mine in the Kalahari Desert...

²⁹ Speech of the Managing Director of the Renova Group of Companies V. Kremer at the round table "Development of cooperation between Russia and South Africa in the field of mining and mineral resources", 20.03.2014.

³⁰ Ibid.

³¹ Ibid.; http://www.transalloys.co.za/about.html

³² ROSATOM offers South Africa to build the entire NPP construction and operation process chain // RIA Novosti, 25.11.2013.

^{Polikarpov V.} 33 Rosatom: Business Proposition for South Africa // Russia-SA Business Council Meeting, November 7, 2014, Pretoria, South Africa, p. 22.

³⁴ Statement by V. Polikarpov, Regional Vice-President for Central and Southern Africa of Rusatom International Network CJSC, 02.12.2014.

³⁵ Ibid.

^{Burkhardt P.} 36 South Africa Signs Agreement With Russia for Nuclear Power // Bloomberg, 22.09.2014; Profile // CGN -http://en.cgnpc.com.cn/n1501/n1502/index.html; Overview // KEPCO

- http://cyber.kepco.co.kr/kepco/EN/A/htmlView/ENAAHPOO1.do?menuCd-EN010101

³⁷ Calculated from data: 4.2 World Development Indicators: Structure of output // World Bank - http://wdi.worldbank.org/table/4.2#

^{38 Voinov Yu. A.} 38 Ekonomika i vneshneekonomicheskie svyazi RSA [Economics and Foreign Economic Relations of South Africa]. Moscow, Di Grafik Publ., 2009, p. 110. (Voinov Yu. A. 2009. Ekonomika i vneshneekonomicheskie svyazi YuAR. M.) (in Russian)

^{Ezeoha A., Uche C.} 39 South Africa, NEPAD and the African Renaissance // ASC Working Paper 64, Leiden, 2005, p. 28.

^{Daniel J., Lutchman J., Comninos A.} 40 South Africa's in Africa: trends and forecasts in a changing African political economy, p. 508 - 509 // State of the Nation: South Africa 2007 edited by Buhlungu S., Daniel J., Southall R., Lutchman J. Cape Town, HSRC Press, 2007.

⁴¹ South African Reserve Bank Quarterly Bulletin No 276. June 2015. S-98.

Pritvorov A.V., Cherkasova I. V. 42 Ekonomicheskie aspekty razvitiya Yuga Afriki. M. Ekonomicheskie aspekty razvitiya Yuga Afriki. M. (in Russian)

⁴³ 6.1.1.3 GDP at Market Prices, Total SADC, Million US $, 2000 - 2011 // SADC Statistical Yearbook 2011.

⁴⁴ Вычислено по данным: Brasilia Declaration // IBSA Dialogue Forum. 6 June 2003 - http://www.itamaraty.gov.br/temas-mais-informacoes/temas-mais-informacoes/saiba-mais-iba s/documentos-emitidos-pelos-chefes-de-estado-e-de/brasilia-declaration/view; SA Export Value HS8 (Annual)..; SA Import Value HS8 (Annual)...

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