The BRICS union – comprising Brazil, Russia, India and China (with South Africa tagging along) – was partly the brainchild of Jim O’Neill, the recently retired chief economist at Goldman Sachs. It is a powerful union, commanding half the world’s population and nearly 50% of world GDP. These figures, as seen by the West, are daunting enough, but, with further analysis, their significance increases sharply in connection with their relation to the expansion of global growth.
The year 2013 may well represent a tipping point for the global economy. For the first time since the Industrial Revolution galvanized Britain to dominate world trade in the 19th century, emerging economies will produce the majority of the world’s goods and services. The inhabitants of the rich, advanced countries are about to become less important, in terms of both production and consumerism, than the masses of people living in the planet's poor and middle class income countries.
This is no surprise, either to economists or governments. Emerging nations have enjoyed greater growth for at least the last 25 years. The centre of gravity of world economic growth has been moving steadily eastwards during the second half of the 20th century. According to the McKinsey Global Institute, it was balanced for centuries between Europe and Eastern China, located somewhere near present-day Pakistan. As Europe and North America industrialized, it moved northwest to a point between Iceland and Greenland about 1950, then quickly east with the rise of Japan and then China, finding itself in northern Siberia in 2010 and forecasted to be near Novosibirsk by 2025!
The former titans of the world economy – Britain, USA, Germany, France, Italy – are all rapidly dropping out of the top 10 producers and consumers as far as expansion is concerned. By 2020, only the US stands a chance of qualifying. By that year, the whole of the EU may well contribute only 5-6% of global economic expansion. China and India will represent half of it.
China is, of course, a clear leader of growth, already starring for nearly 20 years with figures of 10% and more, but the other BRICS countries were not far behind and even non-BRICS states like Mexico and Indonesia made the top 10 around 1995. The fastest-growing countries in 2013 included South Sudan (31%), Libya (20.2%), Mongolia (14%), Paraguay (11%), Panama (9%) and Mozambique (8.4%). These figures are in some cases affected by political developments, but such “minnows” may well be inclined to follow BRICS leadership in the future in dealing with the West.
There is a clear link between rapid economic growth and huge populations. Population growth in the West has been stagnating or, at best, increasing slightly. It is a different story elsewhere, where large populations exist in countries such as Nigeria, Ethiopia, Turkey, Egypt, Vietnam, Pakistan, Bangladesh (like aforementioned Mexico and Indonesia) and continue to show healthy growth. The BRICS themselves cover half the globe. If their union proves effective, their leadership might be useful for other aspiring areas, including Africa and South America. Who will lead the BRICS?
One could answer quickly that China will. The recent meeting between Obama and Xi Jinping gave rise to rumours of a planned joint hegemony – a world of bi-polar character – where a more amicable relationship between the US and China would increase their chances of leading, certainly influencing, initiatives of world significance in political, commercial and eventually cultural spheres. This remains to be seen. Of some certainty, however, is China’s leading role in industrialization and trade, not to mention her current financial strength. Will she “call the tune” for the other three major BRIC powers? This is by no means certain.
There is no doubt about the immense power (and especially the potential) of the BRIC bloc. How will they “roll this out”? What are they currently asking for? They seek a meaningful dialogue with the West about the running of the IMF, the World Bank, the WTC and similar institutions. Though international, these bodies are seen by the BRICS as Western creations and structures, designed to perpetuate the West’s influence and ability to “run the planet.” There is little doubt that such an argument exists. BRICS requires a greater voice in the running of such institutions. Whose voice will it be? The language used may be English, but what will be the tone? Voluble, emotional Indian, fluid, charismatic Brazilian, reserved (often ambiguous) Chinese, or resolute, determined Russian?
The question of “voice” – let us say effective communication – is only one issue. Just as the four major BRICS nations communicate differently, their values are equally divergent. Hindu philosophy and Roman Catholic doctrine have little in common with Chinese Buddhism and Confucianism or with Russia’s mix of Orthodoxy and secular beliefs. Yet the BRICS' aims and aspirations will have to be expressed, pursued and strengthened in the next few years. These nations cannot wait long – there is so much at stake – they will want to move forward, and convincingly. Who will lead the pack?
In communication terms, some questions arise. China’s reserve, ambivalence and bouts of ambiguity, Brazil’s habitual euphoria and charisma (but lack of follow up), India’s Victorian rhetoric and rambling volubility are likely to prove less effective with Americans and Northern Europeans than Russians’ resolute, determined negotiating style. These Anglo-American-Germanic fortresses will not be ceded easily.
Historians may remind us that in her very long history, China has never formed a long-lasting close relationship with any other power. Her historical inclination is not to do so, and this complicates her attitudes towards inclusion or accommodation with Western countries (which in the course of history did her few favours)! This complexity hinders her ability to lead the BRIC countries, with whom she is also likely to have internal cultural differences.
India? With her technical brilliance, command of English and daring, risk-taking attributes, India would seem well-qualified to act as intermediary vis-à-vis the powerful Anglo-Saxon ingredients in the Western line-up, were it not for her inherent and persistent weaknesses in infrastructure, hygiene, gender issues, regional patchiness and stop-and-start leadership.
Brazil – a nation “whose time has come” (if there ever was one) – has had a transformation in national growth, drive and aspirations; she is asset-rich in the extreme, but traditionally sputters in advancement, habitually seeking the next “El Dorado” instead of pursuing process. Geographically, too, she is out on a limb where essential BRICS close cooperation is concerned.
Which leaves us with RUSSIA – ubiquitous in land, active in 3 oceans (Atlantic, Pacific and Arctic), asset-rich beyond dreams, familiar with European, Asian and North American mentalities, aware of her past glories of Empire and civilisation, militarily adequate and confident, humanistic in her breadth of vision and in international affairs.
When it comes to involvement, Russia is in a unique situation. If the US decided to pursue an isolationist course with regard to the rest of the world, it would be easier for her than for most other nations. Defended by two giant oceans on her eastern and western coasts, she only needs to make some amicable arrangements with friendly neighbour Canada and have a little more patience with lively Mexico. Only two land borders.
With Russia, no such luxury exists. With 14 common international terrestrial frontiers, not to mention her extensive maritime and oceanic presence, it will never be possible, let alone advisable, for Russia to isolate herself or even detach herself, from outside influence or observation; by the same token, she is inevitably involved with bilateral relations, interaction, initiatives and understanding with 14 other cultures. History (and particularly geography) offered her no such escape route. Good neighbourliness, perchance leadership, are opportunities that beckon.
These considerations lead us to think of BRICS leadership. Is Russia a candidate? In Western eyes she holds strong cards. Her massive mineral assets, including oil and gas, are enduring. The expansion and distribution of these (boons for humanity) inevitably signify substantial influence, soft power, steady solvency.
Her artistic record (ballet, opera, literature, theatre, the arts) unarguably qualify her to stand and speak with dignity among advanced, creative nations. Her cultural structure – Eurasian, but largely basically European in theological, philosophical, artistic, historical and humanistic terms, places her closer to western thinking, outflanking even Brazil in geographic proximity and depth of sophistication.
Additionally, the quality of some of Russia's leading economists – those who paid off Russia's debts and stabilized the rouble in the years 2000 – 2011 – stand her in good stead to negotiate competently and adroitly with Western movers-and-shakers in the IMF, World Bank, WTC etc.
Finally, Russia's overpowering geography – the only extensive, unquestioned land bridge between East and West – gives her unique advantages in mediating geographical, financial, economic and ultimately political issues that might arise, not only with the West, but inside the BRICS structure too.
The BRICS concept is an immensely powerful one. We are still in early stages. If this union, with its impressive membership, can tighten their own team and succeed in exerting leverage on how world finances are organized, the nature of globalisation would change drastically. Put together China as the No. 1 economy, India and China as the world's biggest consumers, Brazil with its unending supply of commodities and Russian assets of land, minerals and energy resources, and the bloc's influence would be immeasurable. The economic clout is indisputable, but how durable is their union from a cultural point of view?
The multi-faceted Russian Federation, with her Eurasian breadth of vision, could be a key player.
This article first appeared in The St. Petersburg Times