The Reserve Bank has warned that sanctions will be ‘catastrophic’ to the economy, which is currently vulnerable to geopolitical shocks.
South Africa has recently received a refresher course on the economic perils formed in the wake of geopolitical tumult.
More than 90% of South Africa’s international payments, in whichever currency, are processed through the. Should South Africa, like Russia, be banned from Swift because of secondary sanctions, these payments will not be possible. Importantly, the Russia sanctions have seemed to do little in the way of cooling the conflict, raising questions about their effectiveness.
These conditions demand a certain degree of fitness — an ability to deftly respond to change. This is especially true now, in the wake of what political economist Ilene Grabel has called the “morbid post-American interregnum”, borrowing from Italian philosopher Antonio Gramsci. Russia and China — even prior to the current wave of western sanctions — have sought out ways to build resilience. Both countries, for example, had already started to develop alternatives to the Swift payment system.
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