Last month, Chinese President Xi Jinping was welcomed to the Kremlin by Russian President Vladimir Putin. His trip to Moscow is significant for a few reasons.
First, in the words of the leaders themselves, it was an opportunity to deepen the “no-limits friendship” between China and Russia.
Second – and related to the first – it sent a powerful message to Western leaders (who are mostly allied with Ukraine) that efforts to isolate Russia from the global order through sanctions have largely failed.
Last, it shows that the global economic order has already reconfigured itself – US economic dominance, and the resultant dominance of its foreign policy can no longer be taken for granted.
So what does this mean for South African businesses and investors today? For starters, it means we have to consider the opportunities that may present themselves as a result of this global shift.
Last year, I wrote about how the South African citrus industry had been hit hard by increasing production and input costs and a sharp rise in fertiliser costs. About the same time, UN secretary-general Antonio Guterres was asking governments and the private sector to co-operate in bringing Russian food and fertilisers, with Ukrainian grain, to world markets.
See, we are in no way immune to what happens beyond our borders, as our citrus growers would be quick to confirm.
Now if the UN can call for co-operation to ensure Russian products reach foreign markets, I ask how South African businesses should be guided to react if the Russian market proved to be laden with opportunity?
If Russian investors are willing to commit their capital to the local economy, do we embrace such business deals or demand the private sector act in line with Western sanctions?
I believe President Xi’s visit to Moscow – and everything it signifies – offers an answer. We can choose to stand with the West and apply sanctions that are not working, or we can accept the much-needed support for our economy and much-needed jobs for our people in the context of a new global economic order.
* Michael de la Hunt, CEO and Founder at Ion Capital.
** The views expressed here are not necessarily those of Independent Media.
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