South Africa's Changing Economy in the Context of BRICS

This research paper examines South Africa's economic challenges within the BRICS context, focusing on its struggle to transition from an upper-middle-income to an upper-income country while facing de-industrialisation and deep-seated structural inequality inherited from the Apartheid era.

• South Africa and Brazil share similar economic debates and challenges, including commodity-based export profiles, problematic exchange rates, sluggish domestic industrial growth, and competition from imports. Both nations are experiencing structural changes in their industrial sectors but remain committed to the strategic relevance of industry.
• South Africa is at risk of the 'middle income trap,' where a country fails to evolve into an upper income country after achieving initial development. Escaping this trap requires variables such as high investment, innovation, industrial competitiveness, labour productivity, and stable political and regulatory systems.
• The legacy of the Apartheid dispensation created a diversified industrial base through import substitution and subsidies but deliberately restricted the skill development of disadvantaged groups. This historical dualism now hampers South Africa's ability to produce high-quality innovative products and restricts labour mobility.
• South Africa is currently experiencing slow structural change characterized by de-industrialisation, where the services sector is displacing manufacturing. This decline, alongside increased capital intensivity, has hindered government efforts to resolve the persistent employment crisis.
• While BRICS members share common objectives regarding global economic governance reform, internal competition exists. South Africa and Brazil specifically face competitive pressure from China and India, making them reluctant to let this pressure reshape their industrial bases and labour-intensive sectors.

APA

South African Institute of International Affairs (2014). South Africa's Changing Economy in the Context of BRICS. https://saiia.org.za/research/south-africas-changing-economy-in-the-context-of-brics/

Chicago

South African Institute of International Affairs. South Africa's Changing Economy in the Context of BRICS. 2014. https://saiia.org.za/research/south-africas-changing-economy-in-the-context-of-brics/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=South Africa's Changing Economy in the Context of BRICS |date=28 July 2014 |url=https://saiia.org.za/research/south-africas-changing-economy-in-the-context-of-brics/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2014south, author = {{South African Institute of International Affairs}}, title = {{South Africa's Changing Economy in the Context of BRICS}}, institution = {South African Institute of International Affairs}, year = {2014}, month = jul, url = {https://saiia.org.za/research/south-africas-changing-economy-in-the-context-of-brics/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }