A catchy acronym

3 December 2012 06:30 pm - 0 - {{hitsCtrl.values.hits}}

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But do their meetings and joint statements really allow them to punch above their individual weight? What do these countries share beyond a common interest in bolstering their global clout?

The most durable thing about the BRICs is the acronym itself. They cannot be ignored – emerging markets accounted for two-thirds of global economic growth over the past five years, a figure that could rise to as much as 75 per cent by 2015. But combining individual countries into classes based on catchy acronyms adds neither influence to their groupings nor insight into their futures. There are four main reasons why the BRICs will never function as a single coherent interest group.

First, we often say BRICs when we really mean China. In the post-World War II era, the Group of 7 major industrialised countries set the international agenda, and the United States was the driving force. But China’s dominance of the BRICs is even more pronounced. With a gross domestic product of $7.3 trillion, the Chinese economy is the second largest in the world – and larger than all the other BRICs put together.

South Africa’s economy is roughly equivalent to that of China’s sixth largest province. Developments inside China – from its resource appetites and cyber capacity to its political and military might – will drive the actions of the other BRICs. Russia, India and Brazil will be responding to China, both cooperatively and antagonistically, much more than they will coordinate with it.

Second, when it comes to their political systems, the BRICs are apples and oranges ... and pears and pineapples. Brazil and India are democracies; Russia and China are autocracies. But Brazil’s democracy is much more centralised and less diverse than India’s. Uttar Pradesh, India’s most populous province, has roughly the same population as all of Brazil (and four times South Africa’s). With more than a dozen official languages and a remarkably decentralised structure, India is a challenge all its own. It is also the least international in its outlook: despite a population of 1.2 billion people, India has about the same number of diplomats as little New Zealand.

In Russia, Vladimir Putin uses hollow democratic institutions to secure one-man rule. China’s leadership is a cohesive group of party men, aligned in their most basic interests, who negotiate over the details of reform to preserve an increasingly untenable status quo rather than to undertake a large-scale overhaul. The bottom line: if you wanted to pick four major global economies with as little as possible in common in their politics, the BRICs would be a decent bet.

Third, their economic systems are wildly different as well. In Russia and China, the state is the dominant force in the economy. There are significant economic reasons for both to move away from a state capitalist system that will decay over time, but both governments have political incentives to keep things as they are to protect the near-term security of their governments.

Brazil and India lean closer to free market capitalism than to the state-dominated variety.

Nor are the BRICs particularly tied to one another. Brazil has deepened commercial ties with China, its largest importer, but Russia accounted for just two per cent of China’s trade in 2011, and China and India have no bilateral trade agreements. There are still no direct flights between Beijing or Shanghai and Mumbai. Each BRIC depends more on its ties with America and Europe than with other members of its club.

Finally, there is the difference in their most immediate needs. Russia and Brazil are major resource exporters. China, on the other hand, is the second largest importer of crude oil, and India is fourth. But beyond the competing interests of buyers and sellers, there are the frictions within these groups.

India and China are not yet seriously competing with each other for resources, but as the demographics shift in the two countries and as India becomes more urban and spends more on its infrastructure, the frictions will grow. Take water, for example: China and India are home to 37 per cent of the global population, but only 10.8 per cent of its water. The population will grow – and so will strains on that water as industrialised processes and more upscale (and water-intensive) eating habits take hold.

Khaleej Times

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A catchy acronym

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