The BRICS countries met on the 14 April 2011, a bloc increasingly emerging as the new powers on the global scene that are driving most of the world’s economic growth.
The summit held in China promoted cooperation and criticized the western dominated global system. A joint communique, termed the Sanya declaration, stated the current system was no longer representative. BRICS was a term coined by Goldman Sachs investment banker Jim O’Neill to highlight Brazil, China, Russia and India’s similarities in terms of their potential for development and growth. This concept has now turned into talking shop.
South Africa was invited to the 2011 annual get together, this was its first time at the summit and it has been included it into the emerging club. This allows it to show it represents the entire developing world. The summit criticized the current Libya operation and the destabilising capital inflows to emerging markets by Western institutions.
The group has asked for certain changes to the global financial system. These included a call for the International Monetary Fund (IMF) to expand its use of Special Drawing Rights (SDRs), which are used as a quasi currency to transfer funds between member governments. The BRICS called for a broad-based international reserve currency system “providing stability and certainty”. The joint communiqué said “The governing structure of the international financial institutions should reflect the changes in the world economy, increasing the voice and representation of emerging economies and d eveloping countries.” The BRICS also called for a greater say on the UN Security Council, on which only China and Russia of the group have a permanent seat.
Despite being called the world’s developing countries all the constituents of the bloc are different militarily and economically and where they are in their respective stages of development.
Brazil has traditionally exported commodities and minerals to the US and Europe, but Chinese demand is changing the equation for Brazil’s agriculture. This has resulted in China becoming its number one import partner, which in turn has led to cheap Chinese goods flooding the Latin American nation at the expense of its own industries.
Russia is a largely commodities driven nation with extensive reserves of the world’s key minerals and resources. Russia is the largest global exporter of most of the commodities needed for industry. Russia’s resurgence has simply changed its supply of massive reserves of energy from the West and the former Soviet territories to the East.
India, whilst still early in its development is a global leader as a provider of services. Unlike Brazil and Russia, which have built their economies on commodities exports, India has transformed from an economy that was dominated by agriculture to one where the service sector generates 54% of the nation’s wealth. Business services such as IT and business process outsourcing contribute 33% to the total output of services. India for the moment has failed to become a mass manufacturer like the other BRICS countries and as a result still imports much of its manufactured goods from China.
China in a matter of decades has become the world’s factory, producing the world’s textiles and high-end hi-tech products such as semi-conductors and solar panels. It produces these at prices that undercut every other country in the world. This has turned China into a global exports powerhouse, but it has also become a massive consumer of energy which is necessary to fuel such exports.
Such differences have all been formalised into a bloc, these differences will always be an obstacle in the way of any meaningful alliance or agreement. The result of a union coming together on perceived similarities and interests is the fracturing of the alliance by the national interests of participating nations. Each of the nations will attempt to gain their own interests through the bloc rather than unite on a global agenda. The sheer size of China and its imports impacts all decisions.
The 2011 summit was heavily influenced by China who made trade deals with all the other nations in order to strengthen itself. It then made many rhetorical calls for change in the global system established by the colonial powers. India and China are rivals and do not trust each other in Asia. Both have gone to war in the past over disputed borders in Kashmir, and India is worried over the China-Pakistan all season’s relationship. It was with Chinese help Pakistan developed its nuclear weapons. China on the other hand views India’s relationship with the US as another attempt to contain it in South Asia.
Russia and China are also rivals battling for central Asia. Both nations distrust each other as they are vying for similar territories even though they are both quasi strategic partners due to common enemy – the US.
Brazil and China are two nations struggling to industrialise. As a result of a change of government in 2002 a complete transformation took place in Brazil where traditional higher valued products have been replaced by agricultural and mineral imports from China, China has now replaced the US as Brazil’s biggest trade partner. Brazil has now shifted to exports of natural resources from manufactured goods that have long dominated its economy. Such a shift has resulted in cheap Chinese manufactured products flooding the Brazilian economy at the expense of local industry this is now threatening Brazil’s industrial development.
Fundamentally the relationship of each of the BRICS nations with the US – the world’s superpower is strong enough to act as a wedge between any of the members with the others. Each nation also has its own bilateral relations with the US which further weakens the bloc. What this bloc however does allow for, is for each nation to deal with the others outside the international order, giving an appearance of a new coalition of nations standing apart form the US and the West.
This bloc of developing nations is offering little in the way of anything new to the current order, they are merely calling to be taken more seriously on international issues and have a say regarding international institutes established by the colonial powers such as the UN and the Bretton Woods institutes (IMF and World Bank). However the bloc is not willing to gets its hands dirty on most issues. On the United Nations Security Council Resolution 1973, authorizing the use of military force to protect civilians (regime change) in Libya, Brazil and India as non-permanent members and permanent members China and Russia did nothing to stop the invasion. They could have vetoed the resolution but choose to simply abstain from voting. Despite this they remain united in their condemnation of the US, French and British invasion.
Each nation of the BRICS has commercial interests with some nations having global and regional ambitions. This bloc is a real case of the parts being much stronger then the whole. Without any unifying ideology, such nations will not undermine the global system but remain as players amongst many others. Hence the BRICS is not the emergence of a new system for the world or the rise of another power, in fact such a crippled movement further strengthens the US, remaining as mere talking shops. If there is any lesson to be learnt, it would be that this type of union and every union like it will end in failure.
A union of states into a larger union is a weak method of amalgamation. It lacks the characteristics found in full unification where a people become one nation. A union as a method of binding peoples and nations is always prone to political differences as it continues to recognise the sovereignty of constituent nations, this leaves it open to interference from the outside. The European Union has today expanded well beyond its original founder states. Consensus on how far enlargement should go and how deep integration should be continues to plague the union. Member states are reluctant to relinquish their sovereignty to bureaucrats in Brussels or leave key decision making to the two nations that dominate the EU – Germany and France. Whilst from an economic perspective the EU acts as one block, political sovereignty means the union will always remain disjointed – like any of union established in the same manner.