SA, US diplomatic row ‘poses risk of sanctions’

A fallout over Russia and Ukraine war could have serious consequences for SA, with experts warning yesterday that allegations of SA’s supply of weapons to the conflict could result in business closures and job losses.

This came after US ambassador to SA Reuben E Brigety II on Thursday accused the government of providing ammunition to Russia through a ship that docked at Simon’s Town naval base in December.

Presidency spokesperson Vincent Magwenya hit back last night, saying no evidence had been provided to date to support the allegations. He said the government had undertaken to institute an independent inquiry to be led by a retired judge.

“In recent engagements between the South African delegation and US officials, the Lady R matter was discussed and there was agreement that an investigation will be allowed to run its course and that the US intelligence services will provide whatever evidence in their possession,” said Magwenya.

“It is therefore disappointing that the US Aambassador has adopted a counter-productive public posture that undermines the understanding reached on the matter and the very positive and constructive engagements between the two delegations,” he said.

Brigety’s comments came in a day when the rand tumbled to R19.15 to the US dollar, its weakest level in 22 years.

He also accused the ANC of hostility, quoting a policy document from the party which called the Russia/Ukraine conflict a consequence of the US expansion of Nato.

Brigetty said the US government found the remarks to be “outrageous, patently false and incorrect”. He said all manner of issues were addressed in ANC conference documents but not the value that the ANC places on the African Growth and Opportunity Act (Agoa).

He accused the ANC of snubbing him since he arrived in SA when seeking dialogue until recently. He was speaking after returning on a trip to US with a delegation of SA officials led by Sydney Mufamadi.

ANC’s head of international relations subcommittee Nomvula Mokonyane said the party would reflect on the comment made by Brigetty and possibly comment today.[Friday].

Economist Azar Jammine says there is a risk that the US and countries opposed to the Ukraine invasion could impose sanctions on SA, and lead to the withdrawal of capital, which would result in business closure and job losses.

“The risk is that we could have broader sanctions from the west being imposed on SA. And given that half of our trade and more than 80% of our investments in SA comes from those countries,” he said. “This would negatively impact on the private sector, which has been highlighting the dangers of SA’s dalliance with Russia and everyone would stand to suffer.

“On trade weighted basis, the rand is at its weakest level in 22 years. And that would have huge ramifications for our inflation and interest rates. Food prices would rise further and fuel prices wouldn’t come down… and that would compel the Reserve Bank to raise the interest rates by a lot more than just another 25 basis points and that would’ve negative consequences on the man in the street.

“The knock-on effect would result in highly negative growth in the economy and, [due to this], a lot of business will close and more jobs would be lost.”

Political analyst Dr Trust Matsilele said the implications of such accusations would be far-reaching and could compromise one of the important bilateral relationships SA enjoys.

“SA enjoys a duty-free market in some select products to the US and if the claims by the US envoy turn out to be true that could end and SA will lose the duty-free incentives.

“This will not only impact the country through revenue streams but will also likely impact those employed in markets that currently benefit through Agoa incentives.”

He said the markets benefitted agricultural exports such as citrus and wines. David Monyae, an international relations and foreign policy expert told Sowetan that US accusations were “serious”.

“They appear to have no basis given the fact that SA has absolutely nothing to gain in selling arms to Russia...these are just allegations and in situations such as these the onus is on the ambassador to really provide the evidence. But one sees this as nothing else but a smoke screen and as a bullying tactic and it has always been the case and unfortunately there has been this anomaly in terms of undiplomatic way of managing the relationship.”

He said issues of such nature needed to be handled with sensitivity.

“And how do we see it? We see it as nothing else other than bullying, an increased arrogance that is actually known in the US in terms of bullying SA but SA treasures the relationship with the US and there hasn’t been anything to demonstrate that SA wants to destroy a well established relationship.”