Future Trajectories For Brics

Can Brics emerge as a collective that will reject the current neoliberal order and seek to promote a much more social welfarist form of capitalist development – one that might at least unleash a dynamic much more conducive to the emergence of more progressive social and political forces whose pressures from below?

And will it seriously challenge the existing world order where the imperialist behaviour of the US continues to be highly – and sometimes decisively – influential in shaping the course of events?

Or are these governments headed by elites whose principal preoccupation is forging a more cooperative system of global management of a world capitalist order in which their voices will be more seriously listened to and in which their own rankings in the global pecking order of elites rises much more significantly?

If the official outcome of the fourth summit of Brics that took place in New Delhi on March 29, 2012 embodied in the consensual ‘Delhi Declaration’ offered insight into the current significance and trajectory of Brics as a collective body, matters will become even clearer after the Durban Summit.

There have been two contesting views. One is marked by considerable enthusiasm about its potential. The very fact of regular summit meetings with an ‘escalating consensus’ is thought to bode well for the body’s future and its ability to reshape the institutions and practices of global governance.

That the G7 gave way to the G8 which in turn has now given way to the G20 (incorporating the Brics countries as well as other emerging economies) as the main international grouping undertaking to steer the world economy, is taken as testimony to the growing relevance of the emerging powers in general, Brics in particular.

Others are more skeptical. Here, the Brics countries are viewed not so much as major reformers of the current global neoliberal order but as new members happily included in a still hierarchical ‘world steering committee’ because they too will play by the basic rules. Brics may account for 42 percent of the world’s population, 18 percent of its GDP, 15 percent of world trade and 40 percent of its currency reserves.

(It is often ignored that the states comprising the Gulf Cooperation Council, namely Oman, UAE, Bahrain, Qatar, Kuwait and Saudi Arabia, which are all politically subordinate to the US and more obedient towards its economic needs, have in total more dollar reserves – official, sovereign wealth and other government funds – than does China.).

The main importance of Brics lies in the fact that it accounts for more than half of the world GDP growth rate. In what follows the Delhi Declaration issued after the last annual Summit is taken as a basis for assessing the nature and role of Brics precisely because it is their collective statement to date. That the final Durban Declaration will show some forward movement is very likely but in what direction? In the eyes of skeptics there will be more reinforcement than departure from the existing political and economic scripts.

The Delhi Declaration showed that there was no real challenge to the neoliberal order and no interest in promoting an NIEO (New International Economic Order) of the kind that was once discussed by the Nonaligned Movement (NAM) during the 1970s. Indeed, neither Brazil which has observer status in the NAM, or China, which got this in 1992, have shown interest in becoming full members of the NAM or in re-invigorating it as a mechanism for transforming global governance.

Whether it is being part of the G-20 or being aspirants to permanent status in the UN Security Council for those who are not yet permanent, or playing a bigger role in the WTO’s Green Room decision-making, the emerging powers have shown more interest in joining a ‘big boys’ club.’

They use their membership of the G-77 and similar larger groups to project themselves as representatives of the interests of the majority of the poorer developing countries, the better to leverage pursuit of their national interests in negotiations within that club. This is a balancing act of sorts but not one whose primary purpose is to strengthen the South as a whole or prioritize the interests of the most vulnerable and poorest member countries within the South.

The Delhi Declaration accepted the free trade mantra as the key to global prosperity and simply calling for more regulation of the global financial system. So instead of seriously challenging the basic orientations of the IMF/WB/WTO triptych let alone working to radically transform it or build an alternative governing architecture to it, the Delhi Declaration promised to work with the G-20 in the domain of global macro-management.

Of the IMF it demanded merely that it live up to the ‘2010 Governance and Quota Reform’ for providing greater representation and quotas to emerging powers. These reforms however will not alter the US position as the sole power capable alone of vetoing any crucial decisions in the Executive Board.

As for setting up some alternative mechanism for institutionalizing intra-Brics cooperation of a kind that might seriously challenge existing structures, this did not happen. Clearly, concerns about potential Chinese dominance of such a Bank, given its resources and reserves, were paramount among the other member countries on that occasion.

This Delhi Declaration talked about setting up a new ‘Development Bank’ but was careful to state that this would not compete with the World Bank and no timeline for setting it up was established.     

The reality is that a basic political-economic incompatibility rather than organizational handicaps limit the collective’s capacity to function as a powerful and innovative new force in the realm of global politics and governance.

The South African super-wealthy, mostly white, park much of their wealth and investments in Europe and Australia creating a domestic balance of payments problem because of repatriation of profits and dividends to parent companies set up abroad. Given this powerful elite force, South Africa maintains a strong Rand unlike the other four who are nowhere near as committed to maintaining a strong Real, Rouble, Renminbi or Rupee.Achin Vanaik is Professor in the University of Delhi Political Science Department.

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