Is It the end of the BRICs?

Published August 2nd, 2018 - 11:05 GMT
Ten years on, and the latest BRICS summit this week has hardly merited a headline in the international media, though of course the journalists of the five states involved have given the three-day event in Johannesburg dutiful attention. (AFP)
Ten years on, and the latest BRICS summit this week has hardly merited a headline in the international media, though of course the journalists of the five states involved have given the three-day event in Johannesburg dutiful attention. (AFP)

A decade ago, the first BRICS summit drew worldwide attention, as Brazil, Russia, India and China (South Africa joined the following year) sat down in the Russian city of Yekaterinburg to create a new commercial, political and cultural block.

Ten years on, and the latest BRICS summit this week has hardly merited a headline in the international media, though of course the journalists of the five states involved have given the three-day event in Johannesburg dutiful attention.



The reason that First World nations sat up and took notice when BRICS first came into being was that there was, at the very least, a reasonably convincing economic rationale behind the new grouping. The political links between countries that all had significant economic potential, which in the cases of India and China was already being busily exploited, opened up the possibility of an alarming challenge to the hegemony of the US, Europe, Japan and South Korea.

Yet potential does not always translate into reality. Brazil’s oil wealth and its internal market of 210 million people has made it the world’s ninth largest economy. However, corruption at the highest levels of politics and business, exacerbated by an aggressive and unfriendly attitude toward foreign investment, have hobbled its success. For all its vast size and hydrocarbon wealth, Russia lags behind Brazil in eleventh place among global economies. South Africa, the Rainbow Nation, which seemed to have such promise when Nelson Mandela led it away from the deep injustices of apartheid, has grown only very slowly. The unbroken rule of the ANC has been characterized by corruption and incompetence and serious economic shortcomings. As the BRICS meeting broke up, President Cyril Ramaphosa called for the compulsory takeover of white-owned farms without compensation, a policy which under Robert Mugabe in neighboring Zimbabwe proved economically disastrous. Whoever emerges as the winner of this week’s Zimbabwean general election is likely to be partially reversing the measure.

India and China have, in their different ways, unleashed their people’s commercial genius. China is now challenging the United States for the top economic slot and India is already in sixth place. Therefore, looked at dispassionately, the BRICS countries do not have a great deal in common. And India and China are clearly rivals who are eyeing each other with increasing wariness.

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Thus apart from the Shanghai-based New Development Bank, which started work three years ago, BRICS has no major achievement to its name save a lot of pleasant summitry, an agreement on some as yet undeveloped instruments for financial transactions and a grandiose plan to displace the US dollar as the world’s reserve currency.

Perhaps one way to assess this five-state group is to understand that originally BRICS was simply a name without a body. The acronym had been coined by the-then head of Goldman Sachs research in 2001, in a survey of rising economic powers. It took seven years before the member governments managed to make it a reality. And when they did, the existing dominant economies were put on the alert and tried to figure out what sort of threat the new alliance posed to them. As of now, according to one smug US commentator this week, that threat has not materialized. In fact, he added, the organization’s lofty ambitions have been sinking, like a brick.


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