Dalai Lama won’t be back on South Africa’s red carpet anytime soon

By Anne Fruhauf

After much dillydallying, South Africa’s failure this week to award the Dalai Lama a visa in time for his planned visit has elicited a chorus of opposition from respected human rights campaigners, led by Archbishop Desmond Tutu — whose 80th birthday the Dalai Lama was hoping to celebrate in person. The government’s vacillation was no surprise. Over the past decade, the nation renowned for its Nobel Peace Prize laureates and freedom fighters has repeatedly demonstrated that when it comes to big power politics it will abandon ideals in favor of realpolitik. This readiness to choose practicality over principles is likely to grow as the country tries to boost its economy, more and more on the back of emerging economies such as China.

South Africa’s partners among the so-called BRICS offer much that the Old World increasingly seems to lack: deep financial pockets and promising models for economic growth and poverty eradication. South Africa is struggling on all these fronts. Just last week, therefore, President Kgalema Motlanthe called on his counterparts in Beijing to secure a $2.5 billion financing deal and memorandum of understanding on geological and mineral resources — putting South Africa in no mood to rankle China. Awarding the Dalai Lama a visa would certainly have chilled the bilateral relationship. Beijing called off a summit with the EU in 2008 after French President Nicolas Sarkozy met with the Buddhist leader, and a recent research paper found that such a gathering could cost a country 8 percent to 16 percent of its exports to China.

That’s not a hit that South Africa is willing to risk these days. President Jacob Zuma, facing serious pressure ahead of the African National Congress (ANC) party’s leadership elections in December 2012, has pledged to create 5 million jobs by 2020 through the country’s New Growth Path. But the economy is not playing ball. Instead, the recovery has taken a turn for the worse: Debt is rising, the budget is tight, and inward foreign direct investment plummeted roughly 70 percent between 2009 and 2010. Jobs data roundly contradict Zuma’s promise that 2011 will be a year of job creation. Unemployment rose to 25.7 percent last quarter, and young people account for 72 percent of those without work — a figure that politicians find particularly worrying given the Arab Spring to the north and the ANC Youth League’s calls for "economic liberation" at home.

It’s no shock, then, that South Africa is keen on diversifying its trade partners and soliciting investment from well-endowed allies. In 2009, China became South Africa’s largest trading partner, and Chinese investment in the country, long lagging, is creeping upward as well. The Asian giant’s footprint in South Africa’s mining sector is also expanding, and the new memorandum could open the door for deeper involvement. (China might even wind up financing South Africa’s undercapitalized state mining company.) In addition to cash, South Africa is looking for economic role models. The New Growth Path envisages a prominent role for state enterprises and development finance institutions in job creation — an area that China and other emerging markets know a thing or two about.

The cosy relationship between South Africa and China could come at considerable long-term cost, both political and economic. The country needs more democracy, not more social control. And some worry that deepening economic ties will squeeze South Africa’s troubled manufacturing sector; China’s cheap imports and competitive labor pool could compound South Africa’s deindustrialization trend. But for now, South Africa’s leaders seem to calculate that the main downside to the deepening alliance is the occasional inconvenience of having to deny a great man a visa.

Anne Fruhauf is an analyst in Eurasia Group’s Africa practice.