Thick as BRICS
John Hancock on why the BRICS Summit is a meeting of rivals more than allies.
What’s in a name? A great deal, it seems, if you happen to be the BRICS. Until Goldman Sachs coined the acronym back in 2001 to describe emerging Brazil, Russia, India, China and South Africa, these countries had little in common – let alone a common destiny. But they liked the name – and the global attention – so much that it stuck. Now the BRICS leaders are wrapping up their fifth annual summit in Durban, South Africa with the modest goal, according to Russia’s Vladimir Putin, of world leadership.
The world should not hold its breath. Although their ambitions are clear, the way forward is sketchier. The promised deliverable from Durban is a new BRICS Development Bank, aimed more at rivalling the western-dominated IMF and World Bank than “transforming the international architecture”, its stated purpose. How a new bank will achieve either goal is unclear in a world already awash in dozens of development banks. Remember the Bank of the South, brainchild of late Venezuelan President Hugo Chavez, designed to wrest global financial power away from Washington? Nor does anyone else.
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Even fuzzier are plans for increasing intra-BRIC trade, investment, technology sharing, and other good things that have been pledged at every summit since 2009. The Durban communiqué promises yet again to strengthen trade links among the five, but trade friction between China and India is growing, Brazil has just launched a WTO case against South Africa for its protectionist farming, and Russia and China are still wrangling over pipelines, oil prices, and energy development in Siberia.
The problem is that the BRICS – despite the catchy name – are a club of rivals more than partners. They pretend to be economic equals, but China towers over the rest – its GDP is a quarter larger than the four other’s combined and 22 times larger than South Africa’s. India, envious of its rival’s economic success, is struggling to keep pace. Brazil’s growth has slowed dramatically, to less than 1 per cent this year. South Africa’s world trade ranking has plummeted from 16th place in 1980 to 41st today. And despite delusions of grandeur, Russia is a declining, not a rising, power, propped up by a temporary – and finite – energy boom. At the height of the Soviet empire, Moscow ruled 298 million subjects. Today the number is less than half, and is projected to shrink to a third by 2050.
No doubt the BRICS’s economies will continue growing, if at an uneven pace. They already account for 43 per cent of the world’s population and 21 per cent of its GDP. By 2020, the UN’s Development Programme breathlessly predicts, the combined economic output of Brazil, China, and India alone could “surpass the aggregate production of Canada, France, Germany, Italy, the U.K., and the United States”. Sheer numbers dictate that these countries will exercise more and more influence on the world stage.
But ironically, as the BRICS grow more powerful, they also grow more fractious. Brazil is opposed to China’s currency manipulation; China is opposed to Brazil’s industrial protectionism; India is opposed to China’s widening surpluses; Russia and China are opposed to the other BRICS’s dreams of permanent Security Council seats. The biggest flash points are geopolitical. Russia, China, and India are playing a dangerous new ‘Great Game’ in central Asia for supremacy, while China and India find themselves in an escalating arms race in the South China Sea and along their 4,500 km border.
In fairness, this lack of cohesion is not unique to the BRICS; the G-8, the G-20, you name it, are all struggling to find common ground. This brave new multi-polar world may be more democratic than the old superpower one, but it’s also messier. Meanwhile, globalization is erasing the neat lines that once divided the first, second, and third worlds. Now the third world resides in the first – Detroit’s slums, for example – and the first world resides in the third – Shanghai’s glittering skyline, for instance. Power is both more diffused and more confused, leavening no ‘club’ in charge. Ian Bremmer calls it a “G-Zero” world.
The one thing the BRICS clearly share is a smouldering resentment of Western dominance, and a palpable desire for their own place in the sun. Russia is still smarting from its loss of superpower status. China has not forgotten the humiliations of the 19th and early 20th centuries. India still carries heavy colonial baggage, and South Africa carries even heavier baggage from its grim apartheid past. If your enemy’s enemy is your friend, then the BRICS at least have that in common.
But shared covetousness does not a common agenda make. As long as the world pays attention to BRICS Summits, we can expect more in the future. Just don’t expect too much beyond photo-ops as a result.