Geopolitics has a sister called geoeconomics

Published Feb 11, 2024


Geopolitics intermingle with economic tools to advance geopolitical agendas, of which there are an ever-increasing number. Soon we will hear more talk of geoeconomics. The move away from the US dollar as the international reserve currency is but the tip of the iceberg. We often hear of the “World Order” and that it could be changing.

1. The Bretton Woods agreement signed in 1944 by 44 countries, created a fixed currency exchange rate pegged to the gold standard which became important for South Africa whilst we were the largest producer of gold some decades ago. Until 2006, South Africa was the world's largest gold producer. In 2007, increasing production from other countries and declining production from South Africa meant that China became the largest producer.

Bretton Woods agreement created various institutions that set out global economic rules around which we still operate, including the World Trade Organization, International Monetary Fund, and others, in terms of trade, commerce, and sanctions for non-compliance. Up until recently, because of the wealth of America and the potency of developed European nations, the West largely called the shots. The seems a growing dissent by other role players about the dominance of the West, and particularly the USA, who ensure rules are in their favour.

2. Some complexities have arisen for some South African companies going about their day-to-day business that has ensued after the Hamas invasion of Israel and the subsequent application to the International High Court by South Africa relating to war crimes. There is tremendous public interest in companies that now find themselves in a precarious position. There are several such companies, one of which is Dischem that came under the spotlight for its ties to Israel.

According to data from, the value of merchandise exports from Israel totalled $ 72 billion in 2022. Merchandise exports from Israel increased by 20% compared to 2021. Goods exports grew by $ 12.4 billion in 2022 (the value of merchandise exports from Israel amounted to $60 billion in 2021). They also provide the following information.

The above information is also an indication that Israel and South Africa do not shy away from dealing with one another on controversial items, and rightly so. Business should not be hampered by considerations that may change with political party dispensations and changes, as may well happen in the coming 2024 elections in South Africa.

3. At the Investment Conference (SAIC) held in April 2023, Telkom announced that it would be investing R5.97 billion in Information and Communication Technologies (ICT) infrastructure development across South Africa. This undertaking is despite their recorded loss of R9,971 million, in the year ended March 2023. The company has total assets of R59,624 million. Cash flows utilised for investing activities amounted to R5 827 m in the year-end 2023 and for the year-end 2022 it was R9, 298 million.)

As can be seen from the table below Telkom is 40,5% owned by the SA Government and a further 15,63 is held by the Government Employee Pension Fund.

4. Telkom has signed a service agreement with Amdocs South Africa Joint Enterprise (ASAJE) to provide it with inter alia, a state-of-the-art billing system. A modern Telco company has no choice but to operate on the best digitalized billing platform available as the volume of transactions and per-second billing would never be possible without such a system. Another example of one of Telkom’s initiatives as per their 2023 financial statements. “Openserve (Pty) Ltd, a subsidiary of Telkom, has entered into a master services agreement with Google and its affiliates for licences which enable Telkom to operate the Equiano cable system in South Africa.”

Amdocs is a multinational corporation that was founded in Israel in 1982 and its current headquarters are in Chesterfield, Missouri, with support and development centres located worldwide. The company specialises in software and services for communications, media, and financial services providers and digital enterprises. The total number of employees worldwide is 30,695 and the total revenue is R92,91 billion, the company is listed on the Nasdaq bourse in the USA.

Amdocs established the Amdocs South Africa Joint Enterprise (ASAJE) as its prime representative in the Africa region. Waymark Infotech established in 2003, is a company that “cements long-standing partnerships with our clients.”

From the various web page information, not clear if the ASAJE enterprise is signed with ASAJE Israel or with ASAJE USA. Understandably, these matters are sensitive but in the wider public interest, we need to be aware of the facts.

5. We reached out to ASAJE director Pikie Monaheng to provide information regarding the following aspects:

  • Explain the Joint Venture/shareholding structure between Waymark Infotech, Asaje, and Amdocs Israel, and the importance of your significant client Telkom. Please explain the shareholding and the profit share agreements that are in place. Kindly indicate how many employees each of these companies have.
  • In which service provider company name is the contract with Telkom signed? Are there any guarantees and or undertakings that Amdocs Israel must adhere to? Kindly provide the remaining term of the contract.
  • Does Amdocs Israel dictate terms, either commercial or internal such as employee contract terms? Are there local employment targets and are there arrangements to employ Israeli and or Indian foreigners in conjunction with South African citizens?
  • The following results of the Holding company Amdocs USA were made public, and they had increased dividend payouts by 10%. We wish to know if the South African operations are also this profitable.
  • Amdocs reported Record Fiscal 2023 Revenue of $4.89 Billion, up 6.8% YoY as Reported and 7.7% YoY in Constant Currency). Record 12-month Backlog of $4.15 Billion, up 4.5% YoY. They Expect Fiscal 2024 Revenue Growth of 1%-5% YoY as Reported and in Constant Currency). They also expect Double-digit Diluted Earnings Per Share Growth in Fiscal 2024, Supported by Accelerated Profitability Improvement. Their Board Approved a 10% Increase of Quarterly Cash Dividend.

The matters set out above are indicative of how complex and interwoven various interests can become. The South African government has taken Israel to the International Court, yet from the import table above it is clear that our government has imported some sensitive products from Israel. As a country, we need all the friends we can get, and we need to collaborate and cooperate to achieve world-class efficiency and stay internationally competitive and attractive for investment capital to flow to our country.

* Kruger is an independent analyst.