This week, China is hosting two back-to-back summits of emerging economies. These summits seem pregnant with implications that go far beyond eloquent speeches and photo-opportunities. On a closer look, they promise to provide one more definitive push to the world that now has talks of Bohao instead of Devos and sees the emerging G5 (called BRICS) replacing the overstretched G7 (industrialized countries).
This paradigm shift has begun thanks to the activism of emerging powers groupings like BRICS, IBSA and BASIC; which seek a greater share in redeeming the world from impending global crises like climate change and economic slowdown. Unlike other emerging powers’ groups, BRIC is also expanding its membership. But more than adding new members like South Africa, BRICS is fast transforming this so-called ‘economic club’ into a far more political entity; more than its leaders are willing to admit.
It was in 2001 that Goldman Sachs executive Jim O’Neill coined the acronym BRIC (Brazil, Russia, India and China) to describe the group of countries that were emerging as the leading economic powerhouses of the 21st century. His analyses were based on the growth prospects of these economies. In subsequent years, given several unforeseen trends, his economic projections were to advance several of his original predictions. Jim’s successive report of 2003 advanced the dates by when these BRIC economies would be overtaking several of the conventional post-industrial revolution sheriffs of the world, recasting the world economy and economic discourses.
The significance of this third summit in China this week lies in BRICS moving much beyond what Jim O’Neill had outlined. Even though it remains fundamentally an economic grouping, the entry of South Africa makes BRICS a global entity. There are a number of other countries like Mexico, Egypt, Turkey, Nigeria, Indonesia, Vietnam and South Korea who are far bigger and faster rising economies, and have expressed an interest in joining the BRIC. However, South Africa seems to better fit the bill as an audible voice from a continent with 54 countries. At the same time, South Africa promises to serve as an effective gateway for BRIC’s trade and investments into these resource-rich African nations.
Jim O’Neill criticized South Africa’s entry into BRIC last week on CNN, calling the country’s influence on global economic trends too small to qualify as a member of his original BRIC paradigm. Instead, he prefers Nigeria. But the politics of Nigeria shadow both its economy as also its acceptability in the international community. Even in South Africa, there have been voices of dissent against the BRIC. African National Congress Youth League leader Julius Malema last week called his country’s entry into BRIC misplaced, making it vulnerable to external forces. This shows that the entry of South Africa into BRIC has more to it than economic credentials.
The fact that BRICS is fast evolving its own life and aspirations is sufficiently discernible today to stand scrutiny. To begin with, this new BRICS need not necessarily fit into the original vision of Jim O’Neill. BRICS today is developing not only an economic but also a huge diplomatic footprint, grafting an influential political club over what had originated as a loose economic acronym, making tentative projections and masquerading as a paradigm.
The fact that this third summit is being hosted back-to-back with the Bohao Forum will further facilitate BRICS’ journey from economics to politics. It will allow BRICS leaders to rub shoulders with their contemporaries who will be attending the Bahao Forum. Going by initial indications, BRICS leaders will be discussing not just economic issues of inclusive growth but also global political scenarios, including the western air-strikes to impose a UN-sanctioned ‘No Fly Zone’ on Libya. We may actually see a firm warning to western countries being issued in their closing statement.
There is already a realization that BRICS failed to coordinate their strategy at the UN Security Council’s recent discussions on imposing a ‘No Fly Zone’ on Libya. This resulted in South Africa supporting the resolution while the other four abstained from voting. Russia, India and China have since continued with their campaign against the western bombing of Libya, insinuating an impending humanitarian crisis. Even Brazil issued a similar statement after President Obama’s visit. South Africa has remained relatively mute on the subject but is likely to be co-opted into an evolving anti-West BRICS consensus on the subject.
What guarantees the success of BRICS’ political incarnation is its strong economic fundamentals and policy coordination. These positive trends in emerging BRICS economies are leaving traditional economic powers lagging behind. At present, for instance, the BRICS account for quite over half of the world’s foreign direct investments, annual economic growth, and nearly half of its global population. As a percentage share of the world’s GDP, their combined GDP is expected to rise from 17 per cent of the world in 2010 to 47 per cent by 2030, if not earlier. An expansion of BRICS to include other members in their New Delhi summit next year promises to further reinforce this paradigm shift.