We have witnessed the world moving away
from unipolarity to bipolarity and now to multipolarity. The US is not declining;
however, its clout is fading away as other countries such as China and India
are rising. The multipolarity is
reflected not only in the emerging economies but also in the organizations
formed by the states and also those by the non state actors. The heterogeneous
multipolarity has called for a structural change. Various scholars have tried
to find out answers to these structural changes. Samuel Huntington (1999:35) has
coined the notion of Uni-multipolar structure with the US in the core and
various other countries extending diplomatic, economic and military support for
its initiatives. Some of its representations have been obvious in the invasion
of Iraq, Afghanistan and recently the NATO led regime change in Libya. Such a
structural arrangement is unsustainable in long term, the Libyan crises is a
pointer to this, where the US including its allies remained non-committal on
sending ground forces. Richard Haass (2008:44) has argued that ‘nonpolarity’ is
the answer, where a dozens of countries could have the capability of
‘exercising different powers.’ Giovanni Grevi (2009:9) on the other hand argues
that the world is becoming increasingly “interpolar” which is “multipolarity in
the age of interdependence.” He puts the state at the centre, however, agrees
that non-state actors could inflict a severe blow on the system. The 9.11 and
26.11 terror strikes in the US and India are pointer to the capabilities
acquired by the non-state actors and their disastrous consequences. Whatever
may be the acronyms, all are a pointer to multilateralism in the age of global
interdependence. Multilateralism or multi-multilateralism is not necessarily an
ultimate solution to bilateral or multilateral problem, however, is extremely
important for conflict resolutions and enhancing understanding and cooperation
among the nations, the BRICS is just an example of that, and China has
furthered its strategic depth in politico-economic affairs not only amongst the
BRICS but also in the world at large .
The acronym, BRIC was coined by Jim
O’Neill (2001), an economist with the Goldman Sachs in a paper entitled “The
World Needs Better Economic BRICs”
published in 2001. Yet in another paper Dominic et. al. (2003) argues that over
the next 50 years, the BRICs could become a much larger force in the world
economy and could be larger than the G6 in US dollar terms. For example the GDP
of the BRICS would be around 85 trillion USD comparing 66 of the G6 countries. Therefore,
the notion signals a shift in the global economic power away from the G7 economies toward the emerging
economies with China as a dominating force. The BRIC thesis holds that China and
India will become the hub of world’s manufactured goods and services, while
Brazil and Russia will become leading suppliers of raw materials. This however,
may not hold true for the future, as China is determined to move away from the
labor intensive industries to R&D and high end manufacturing during the 12th
Five Year Plan (2011-2015) as revealed by the Chinese Premier Wen Jiabao in his
2011 Government Work Report and also in 2013 work report.
At present, the BRIC account for more than 25% of the
world’s land mass; more than 40% of world population; over 50% of
world economic growth; and around 15% of the world economy. The economic indicators are bound to further
shift the balance given the impressive growth rates in these countries. With
South Africa, the
world’s 31st-largest economy joining the ranks, the BRICS has started to wield
even more influence in the world economy. Even though, South Africa’s 286
billion US dollar economy and population of 49 million pales in comparison to
other BRIC members, especially China and India, however, it is the most
advanced economy in Africa; the largest trade partner of China in Africa; and
more importantly has provided a gateway to the BRICS into Africa for greater
trade and investment. Furthermore, South Africa’s entry has given the BRIC a
voice in the African Continent, and is bound to strengthen the economic base of
a multi-polar world on the one hand, and create conditions for strengthening of
the global peace and security on the other.
China
in BRIC Summits:
The BRIC was formally institutionalized
as an international forum during the First BRIC Summit hosted by Russia in June
2009 albeit the BRIC Foreign Ministers had met in Yekaterinburg a year earlier.
The summit primarily dealt with the global economic crisis and looked for
answers as how to build a new international financial system. In this regard, the
Chinese and Brazilian move to invest 40 and 10 billion US dollars respectively
in International Monetary Fund (IMF) bonds was considered as a move to
diversify their dollar-heavy currency reserves, as these nations, especially
China was increasingly apprehensive about the safety of the exchange reserves
held in US dollar denominated assets. China holds about over 3 trillion US
dollars in foreign exchange reserves, of which more than 70 percent are held in
US dollar assets. BRICS nations hold a total of $3.8 trillion in international
reserve assets excluding gold, 42 percent of the world's total. It is
discernable that why China should initiate such a step in the BRICS
multilateralism.
It is owing to this fact that the BRICS
nations call for the reforms of the world organizations, including the
financial institutions and the United Nations, and demand greater role for the
emerging economies in these bodies. This is obvious from the BRIC foreign ministerial
meeting on May 16, 2008 in Yekaterinburg prior to the first BRIC summit at the
same place in 2009. During the meeting, the
BRIC nations called for the emerging economies to play more assertive role in
the World Bank and the International Monetary Fund. This has also been endorsed by
the G20 summit held in South Korea in November 2010, of which all the BRIC
nations are members. The reform of the world financial institutions is considered as an important step
towards a more legitimate, credible and effective system of governance where
emerging economies like India and China will find greater representation.
Impressive growth trajectory of the
BRICS nations, and the currency appreciation especially in China has provided a
huge opportunity for the investors in BRIC assets; meanwhile, the BRICS
countries are also contemplating to buy each other’s bonds and swap currencies
so as to reduce their dependence on dollar; and why not when the combined
reserves of these countries are so huge. Apart from discussing economic issues at the
first summit, the BRIC countries also issued political statements concerning
the UN reforms and the global food security in the wake of inflationary trend
in the world food prices in 2007-08.
The Second BRIC Summit was
hosted by Brazil in Brasilia
on 15 April 2010. At the close of the summit, a Joint Statement was issued that
highlighted various issues of common concern such as global governance,
international financial issues, trade, agriculture, climate change, energy and
terrorism etc. issues. As regards the global governance, the group called for
supporting “a multi-polar, equitable and democratic world order, based on
international law, equality, mutual respect, cooperation, coordinated action
and collective decision-making of all States.” In this respect the member
nations hailed G-20 as the premier forum for international economic
coordination and cooperation. The
role of multilateral
diplomacy with the United Nations playing the central role in dealing with
global challenges and threats was also stressed.
In order to make the governance
structures of IMF and World Bank more representative, the BRIC nations
reiterated that there is a need to shift the voting power in favor of emerging
market economies in respect to their relative weight in the world economy. In order to reduce their dependence
on dollar trade, the grouping resolved to study the feasibilities of monetary
cooperation, including local currency trade settlement arrangement between BRIC
countries. The BRICs also urged all states to resist all forms of trade
protectionism and fight disguised restrictions on trade, and pledged to make
sustained efforts to achieve the MDGs of the UN by 2015.
As regards agriculture, the BRIC
decided to create an agricultural information base system of member states and
enhance agriculture technology cooperation and innovation. On energy and
climate change, the BRIC reiterated their resolve to develop cleaner, more
affordable and sustainable energy systems, to promote access to energy and
energy efficient technologies and practices in all sectors, and sought western
cooperation and support for the same. United Nations Framework Convention on
Climate Change and the Kyoto Protocol were considered as the framework for
international negotiations on climate change. As far as terrorism is concerned,
the statement stated that terrorism cannot
be justified by any reason, and urged early conclusion of negotiations in the
UN General Assembly of the Comprehensive Convention on International Terrorism
and its adoption by all member states. The statement also called for “Alliance
of Civilizations” by way of which dialogue among civilizations, cultures,
religions and peoples would be strengthened.
The Third BRIC Summit was held in April 2011 in Hainan province of
China. It formally became BRICS as South Africa joined the summit. Chinese
President Hu Jintao, who presided the summit delivered a speech entitled “Broad Vision, Shared Prosperity,” and held
that the 21st century should be marked by peace, harmony, cooperation and
scientific development. At the ministerial level meetings the four impressed
upon China to open its markets for more value added products, e.g the Indian
pharmaceuticals, Brazilian aircrafts etc. they also voiced their concern about
the artificially undervalued Yuan
that they
claimed was undermining the exports from these countries. The stand on issues such as, reforms of
the international monetary system, terrorism, and the Libyan crisis were
reiterated. China also endorsed the aspirations
of India, Brazil and South Africa for permanent membership of the UNSC.
The Fourth Summit under the
theme "BRICS Partnership for
Global Stability, Security and Prosperity "was held in Delhi and
the close of the summit a declaration was issued on March 29, 2012. Concerns we expressed at the global economic
situation, and the priority was accorded to restore market confidence and global
growth. BRICS leaders felt that it is critical for advanced economies to adopt
responsible macroeconomic and financial policies, avoid creating excessive
global liquidity. In this context, the G20 was considered as a premier forum
for international economic cooperation. The call for a more representative
international financial architecture, with an increase in the voice and
representation of developing countries and the establishment and improvement of
a just international monetary system was reiterated. The leaders also
considered the possibility of setting up a new Development Bank for mobilizing
resources for infrastructure and sustainable development projects in BRICS and
other emerging economies and developing countries. On international issues, the
members expressed deep concern at the current situation in Syria and called for
an immediate end to all violence and violations of human rights. Commitment to
multilateral diplomacy with the United Nations playing a central role in
dealing with global challenges and threats was reiterated. In this regard, the
need for a comprehensive reform of the UN, including its Security Council was
reaffirmed. Besides there was a Delhi Action Plan that envisaged ministerial
meetings of BRICS nations.
The Fifth Summit was held in Durban
South Africa between March 24 and 26 under the themeThe theme of Durban summit is "BRICS and Africa
Partnership for Development, Integration and Industrialization." The focus of this summit was the establishment of Development
Bank, the feasibility study of which has been completed and report submitted to
the respective governments. The leaders reached an agreements on the development bank and the contingency fund. BRICS also
launched a business council to drive private sector investment among
them and a think tank council to assist with innovations. The size of the contingency fund has been worked around $100 billion, in which China would
contribute a $41 billion share, followed by Brazil, Russia and India
with $18 billion each, and South Africa with $5 billion. It is believed that it would take a year or so for each nation to regulate the fund, and a
final agreement could be signed when the BRICS meet next year in
Brazil. Some of the contentious issues would be where to host
such a bank and how much the respective countries are asked to contribute towards
it. Whether it would be a level playing field, or the countries are permitted to
pool funds at will, remains to be seen. There are also apprehensions that China
may wield more influence on the establishment of such a bank with more financial and governing powers.
The
Cooperation
There are various sectoral initiatives
between the BRICS aimed at strengthening cooperation. There are ministerial
meetings as regards agriculture and development, finance and trade, and various
meetings of governors of the central banks, heads of the statistical
institutions, and conference of the think tanks of BRICS nations. There are
plans to publish a joint encyclopedia of the BRICS too. On security issue the
BRICS insists on common security and the resolution of conflicts in a peaceful
way, and calls for regional security cooperation.
Besides, there are various agreements
and frameworks concluded among the BRIC countries such as the Shanghai Cooperation Organization
(SCO), where India is included in the capacity of an associate member and could become a
full member in future as Russia has supported its candidature; the IBSA, which unites Brazil, India, and South Africa in annual dialogues; and more
importantly, all BRIC nations including the new entrant are the members of G20. South Africa, India and Brazil will
also take up a two-year seat on the United Nations’ Security Council from this
year, resulting in all BRIC nations being represented on the council.
Challenges
Regardless of the potentials
and opportunities, and the reach through every continent, the BRICS will face
enormous challenges as they do not have a common
agenda. Added to this, they are not an economic block like the European Union
or a political alliance like the NATO, albeit capable of converting their
economic prowess into a greater geopolitical clout; all have diverging
interests, and at times conflicting (Ariel Cohen et. al.
2010).
First of all, the mammoth economic
growth of the BRICS counties is dependent on the manufacturing based on raw
materials such as iron ore, copper, aluminum, fossil fuel and natural gas;
technological breakthrough in renewable energy could shift the balance again in
favor of G 7, and could result in slower economic growth than anticipated.
Secondly, the so-called currency manipulation by some BRICS countries has
‘harmed’ the manufacturing in some countries, as admitted by the Brazilian
finance minister Guido Mantega recently. Thirdly, there is an asymmetric
relationship between the polities and economies of the BRICS nations. For
example, the economy of China is bigger than the rest 4 and holds over $3
trillion of reserves, over 30% of the world reserves; its political clout is
also bigger, as it holds the veto power in the UNSC besides being talked as the
G2 partner with the US. Fourthly, the political equations between India, China
and Russia are impregnated with ‘mutual mistrust’ and huge ‘security deficit’,
especially between India and China on the issue of border, and China’s entente
with its ‘all weather friend’ Pakistan. Fifthly, some other regional
flashpoints weather in the South China Sea or in the subcontinent could make
the cooperation between major BRICS countries irrelevant. Sixthly, the domestic issues, especially the
increasing social imbalance in the BRICS nations could also pose serious
challenges to the internal security and economic development in these
countries.
And finally, even though
India has welcomed South Africa’s entry into the folds of BRICS, but it is
believed that the entry has also intensified the rivalry between India and
China, for China would like to dilute IBSA by amalgamating it into the BRICS.
India knows that China has a domineering role in the BRICS and would like to
keep its strategic space open by way of IBSA. Since Africa is India’s major
foreign policy target for the year 2011, it may not be willing to dilute IBSA
so easily. The South African entry could open this ‘alliance’ to other emerging
economies such as Indonesia, Vietnam and South Korea in Asia, and Egypt and
Saudi Arabia in the Middle East. Nonetheless, so far the going has been good
for China, including other members. The differences so far have not boiled down
to open conflicts; it remains to see how far China would be able to steer its
agenda through BRICS as well as other multilateral forums.
References:
Ariel
Cohen, Lisa Curtis, Derek Scissors, and Ray Walser (2010) “Busting the
Brazil/Russia/India/China (BRIC) Myth of Challenging U.S. Global Leadership”
The Heritage Foundation, paper no. 2869, April 10, 2010 http://report.heritage.org/wm2869 (Feb 28, 2011)
Council on Foreign Relations
(2010) BRIC Summit Joint Statement, April 2010, http://www.cfr.org/brazil/bric-summit-joint-statement-april-2010/p21927
(February 15, 2011)
DominicWilson
and Roopa Purushothaman
(2003) “Dreaming with BRICs: The Path
to 2050” Goldman Sachs Global Economics Paper No. 99, http://www2.goldmansachs.com/ideas/brics/book/99-dreaming.pdf
Giovanni Grevi (2009) “The
Interpolar World: A New Scenario”, Occasional Paper 79, Paris: EU
Institute for Security Studies, June 2009, p. 9.
Jim
O’Neil (2001) “Building Better Global Economic BRIC” Goldman Sachs Global
Economics Paper No. 66 http://www2.goldmansachs.com/ideas/brics/building-better-doc.pdf
Richard N. Haass (208) “The
Age of Nonpolarity: What Will Follow US Dominance”, Foreign Affairs,
vol.87:3
Samuel P. Huntington (1999)
“The Lonely Superpower”, Foreign Affairs, vol. 78:2 , pp. 35-49.
Thomas Renard ( 2009) “A
Brick in the World: Emerging powers, Europe and the world order” Egmont paper,
The Royal Institute for International Relations, Brussels
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