South Africa vs BRIC countries – average salaries, GDP and unemployment compared

The 10th annual BRICS summit has kicked off in South Africa,
launching the platform for leaders from Brazil, Russia, India,
China and South Africa to discuss issues and topics relevant to
these key emerging markets.

The summit’s key point of discussion this year is around the
fourth industrial revolution and bridging the digital divide –
but various topics from health and tourism to peacekeeping and
social issues are on the agenda.

It also provides an opportunity for South Africa to reach out
to its BRICS partners for foreign investment, at a time when
the local economy is in dire need of a boost.

South Africa tends to be the outlier in the BRICS collective,
being the smallest country (in terms of GDP) among its partners
in the initiative.

However, when it comes to the spread of wealth (GDP per capita)
and its anchor as one of the biggest economies in Africa, it’s
understandable why it has a role to play in among the emerging
market leaders.

BusinessTech has broken down some of the key economic metrics
of South Africa and compared them to its BRICS counterparts, to
see exactly where we fit into the picture.

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Population

While South Africa is one of the most populous countries in the
world (24th largest by latest estimates), it is far off from
its BRICS partners by some margin.

The latest data from Stats SA, looking at the mid-year
estimates for 2018, South Africa currently has just over 57.7
million people living within its borders. Among the other BRICS
countries, Russia is the closest with a population three times
bigger at 156.9 million people, followed by Brazil
at 209.2 million.

China and India have the biggest and second biggest
populations, at 1.39 billion and 1.33 billion people,
respectively.

Taking the UN’s projected population growth rates into account,
the picture isn’t expected to change that much – the gap is
expected to narrow, as Russia and China’s populations decline
while South Africa heads to close to 73 million people by 2050.

However, India’s population is expected to blow up to 1.66
billion people, stretching further ahead.

Country	Current Population	2050 Population
China	1.39 billion	1.36 billion
India	1.33 billion	1.66 billion
Brazil	209.2 million	232.7 million
Russia	156.9 million	132.7 million
South Africa	57.7 million	72.8 million

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GDP, GDP growth and GDP per capita

South Africa has been struggling with almost a decade of low
growth, while other emerging markets have benefited from a
rather sizeable growth period.

On top of a low growth rate – which hit 1.5% in 2017 – South
Africa is also the smallest economy, by far. According to the
IMF, at current rates, South Africa’s GDP output was at $370.9
billion in 2017, compared to the Chinese powerhouse of $14.1
trillion.

In fact, all the BRICS partners, except South Africa, have GDP
output in the trillions of dollars.

Country	GDP	GDP growth
China	$14.09 trillion	6.6%
India	$2.85 trillion	7.4%
Brazil	$2.14 trillion	2.3%
Russia	$1.72 trillion	1.7%
South Africa	$370.9 million	1.5%

Given the very different population sizes, a better indication
of how big or small the economies are is to look at GDP per
capita. In this measure, South Africa is still relatively small
– but still not quite in the leagues of the bigger players.

Things improve when considering purchasing power parity, but
the overall positioning is the same.

Country	GDP per capita	GDP per capita PPP
Russia	$11 950	$28 960
Brazil	$10 220	$16 200
China	$10 090	$18 070
South Africa	$6 460	$13 840
India	$2 130	$7 780

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Minimum wages

According to Stats
SA, average monthly earnings paid to employees in
the formal non-agricultural sector decreased from R20,060 in
November 2017 to R19,858 in February
2018 – though this was up 5% year on year from R18,913 in
February 2017.

Expressed as an annual salary, this equates to R238,300 a year
– or $17,105 in dollar terms.

In China, the average monthly salary for white-collar workers
is
7,629 yuan a month; Russia pays 48,540 rubles a
month ( a year); Brazil pays 2,187 real a
month; and India pays around 270
rupees a day, on average.

This is how the annual salaries compare at current rates:

Country	Local salary	In USD
South Africa	238 300 rand	$18 030
China	91 548 yuan	$13 530
Russia	582 480 ruble	$9 252
Brazil	26 136 real	$6 974
China	98 550 rupee	$1 434

Taking purchasing power parity into account, however, changed
things significantly.

South Africa has a local purchasing power almost twice the
value of the US$ – a fair value exchange of R6.25 to the
dollar, according
to the IMF (2018). That means that the R238,300
average annual salary in South Africa is equal
to $38,128 in PPP dollar terms.

Using the same method for the other BRICS nations’ averages, we
have the following:

Country	PPP rate	USD PPP
South Africa	6.25	$38 128
China	3.51	$26 082
Russia	23.49	$24 797
Brazil	2.05	$12 749
India	18.04	$5 463

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Unemployment levels

The final key indicator to compare is the health of South
Africa’s workforce compared to the other BRICS nations. South
Africa has a notoriously and stubbornly high rate of
unemployment, even by the narrow definition, and getting
progressively worse as you look wider.

This limits the country’s capacity to reach higher levels of
growth – and is one of the key topics being discussed in this
week’s BRICS meetings.

South Africa’s unemployment crisis is only further highlighted
when looking at employment rates in the other BRICS countries –
while India and China have massive populations, they manage to
have low unemployment rates.

Russia and Brazil, with smaller populations, though still
significant, also have unemployment levels far lower than South
Africa. South Africa, with the smallest population in the
grouping, has an unemployment rate two times higher than its
closest BRICS counterpart.

Country	Current Population	Unemployment rate
South Africa	57.7 million	26.7%
Brazil	209.2 million	11.8%
Russia	156.9 million	4.7%
China	1.39 billion	3.9%
India	1.33 billion	3.4%

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Read: South Africa’s average salary versus the
world