Last week was an active one for the BRICS – Brazil, Russia, India, China and South Africa – countries which have recently given their relationships an institutional form. Interestingly this acronym BRICS, based on their apparent similarities and apparent objective interests as global actors in the current international economic system, was devised some years ago not by themselves, but by a Western economic analyst. Their meeting in Brazil came on the heels of the football World Cup which had brought Brazil centre stage in terms of world visibility, and it kept the world’s eyes concentrated on that country as a leader in another sphere.
Since the name has become a familiar one, there has been much discussion, particularly in Western economic and financial circles, as to whether the similarities that characterize these states would be enough to provide them with the desire to take a collective approach to international economic diplomacy; and in particular to the functioning of the traditional Western great powers led by the United States, and including Japan.
Particularly since the most recent economic recession commencing in 2007, the BRICS have been concerned with the management of the international financial system by the US and the major European powers, a concern that has been demonstrated more and more, particularly by China, but also by Brazil and India. China of course, has not been so much concerned with deriving resources from the two leading institutions, the World Bank and the International Monetary Fund.
Instead, it has increasingly taken the view that, given its increasing prominence as a quickly- rising developing country and almost a competitor in terms of its ability to contribute financial resources to those two organizations, its government, along with those of other major developing states, should be able to fully participate in, and define the management of the global economic institutions, particularly in a time of recession, including the terms on which developing countries are able to draw resources from them.
China has been particularly joined in this view by India, preoccupied as well with Western dominance of the ongoing discussion of the terms of international trade through the medium of the World Trade Organisation. And in that connection, in recent times both China and India have obviously decided to mute the intensity of their territorial or border differences, with India recognizing that the rapid growth of China will obviously have consequences for long-term global economic management.
In addition too, geopolitics has played a part in inducing cooperation among the BRICS. For with the long period of economic prominence of Japan under an assumed prerogative of the monitoring of that country by the United States as a consequence of its World War Two defeat, Japan’s leadership has been wanting to show a certain independence. For it has recognized that the Asian sphere, with China and India and even Indonesia gaining global prominence, will have the opportunity to more autonomously define the terms of international trade, finance and aid as time goes on.
What has probably surprised the Western powers, however, is that at these states’ diplomatic and common decision-making capacity has shown signs of rapidly increasing. And further, that the coalition now given practical, or institutional form over the last few weeks, is spanning regions in different parts of the globe, giving itself negotiating weight that is not limited to specific regional spheres. The BRICS now, from last week’s discussions, form an international system, in much the same way as the US and the EU have long formed a diplomatic and economic decision-making forum (the North Atlantic system) capable of extending itself to Japan as necessary.
What is interesting in respect of the outcome of last week’s discussions, is that within the West there was much prior negative speculation as to the ability of the BRICS to wedge a coalition of substantial financial, economic and institutional substance and geographical spread.
Prior to the beginning of the Brazil meeting, the British Financial Times, one of the most prominent journalistic commentators on financial, and broader economic matters, observed that “for those seeking evidence of what this summit signifies, it may be a damp squib. And, the paper argued, “unlike many multilateral groupings, they are geographically far-flung, depriving them of the relevance of contiguity,” adding that it is “not clear that the countries are stable allies.”
At the end of the meeting, however, the Financial Times, while still sceptical, seemed to have been surprised that, in its words, “one item of unusual substance emerged from the familiar gusts of rhetoric about solidarity between the world rising powers,” this being the agreement to establish a BRICS development bank, apparently now seen in the West as paralleling the role of the World Bank, and a US$100 million emergency assistance fund to aid countries in dealing with the kinds of economic shocks that have characterized the world economy in recent times, with substantial effects on developing countries.
From our geographical location, it will have been observed that the BRICS had a meeting with the countries of Unasur of which Guyana and Suriname are members. Both of these countries should be in a position to fully inform Caricom member states of the new institutions’ perspectives and intentions.
To that end, Caricom states should be in a position to utilize their own diplomatic skills, as the new institutions develop, to induce, over time, awareness of the development perspectives of the small countries of the hemisphere, a task in which the Caribbean Development Bank should be capable of playing a part.
For Unasur, and for Brazil in particular, regional infrastructural integration is the name of the development game, and surely, the Caricom and CDB coalition should be capable of making that a part of the definition and implementation of the Sustainable Development Goals that we are presently pursuing.
So here should be much interest from our region in how the two financial institutions, defined by the BRICS at last week’s meeting, are pushed to fruition.