Patrick Low (Hong Kong) / Can the BRICS lead?

Patrick Low (Hong Kong) / Can the BRICS lead?

Patrick Low

«As it stands now, the group cannot claim to speak for the developing world, and it shows no sign of overcoming its own differences», - Patrick Low, vice-president of research at the Fung Global Institute.

Can the BRICS nations lead?

Although the New Development Bank was established by the BRICS bloc more than two months ago, discussion continues on the significance of the initiative.

Only last week, governor Raghuram Rajan of the Reserve Bank of India insisted the bank was not intended as a rival to the World Bank or the International Monetary Fund.

Many think otherwise.

But a more fundamental and pressing question is what the BRICS quintet of Brazil, Russia, India, China and South Africa represents in global affairs.

Does the group encapsulate emerging-economy realities and aspirations? Is it representative? Is it cohesive?

The BRICS group started life casually when the BRIC part of the BRICS bloc was identified in 2001 by Jim O'Neill, a Goldman Sachs economist, as leading large and dynamic economies with growing political and economic heft.

With the initiation of annual summits in 2009 under a rotating chair and South Africa's accession to the group in 2011, the BRICS became a formal association.

The New Development Bank and a contingent reserve arrangement have further consolidated the notion of the BRICS as an institution.

The BRICS bloc would like to be seen as an expression of power and leadership in a world where the economic centre of gravity is shifting its way.

The BRICS club represents 40 per cent of the world's population and almost a fifth of global gross domestic product.

But it has yet to demonstrate collective global leadership, and in a world sorely lacking in that commodity, it is reasonable to ask when and if it ever will in its current configuration.

Two sets of questions are relevant - one concerning internal dynamics and the other legitimacy.

On the first of these, contrasts abound among the group. China's GDP is much bigger than the incomes of the other four combined. It is more than 26 times that of South Africa and four times larger than Brazil's, the next largest economy.

Income per capita ranges from about US$4,000 in India to nearly US$18,000 in Russia. GDP growth rates have not been uniformly high. Between 2000 and 2013, they ranged from an annual average of 9.1 per cent in China to only 3.4 per cent in Brazil and South Africa.

Strategic interests, politics and approaches to development diverge in ways that make solidarity in principle a lot more straightforward than the concrete pursuit of shared objectives.

Territorial claims, alleged exchange rate manipulation, development policies, seats on the United Nations Security Council and national positions in the World Trade Organisation's Doha negotiations are examples of issues that place BRICS countries on opposing sides of important arguments. Not all rich-country interests are mutually shared either, but what binds them is more powerful than what divides them.

As for legitimacy, many wonder at the composition of the BRICS club.

Why, for example, is Indonesia, Nigeria, Vietnam or Turkey not at the BRICS table? Each of these countries faces development challenges, is more populous and either richer or poorer than at least one of the BRICS nations. They have all grown faster on average than two or more of the BRICS members in the 21st century. And all of them exert political and economic influence well beyond their borders.

The BRICS bloc is unable at present to articulate shared policy platforms with adequate specificity to make a convincing coalition in global affairs. Nor can this configuration exert collective leadership in the rest of the developing world.

Repeated assertions by certain BRICS nations that they speak on behalf of developing countries have been ignored or treated as irritants.

Internal competition among bloc members, or among a more open BRICS Plus grouping, is likely to persist in a rapidly changing world.

But the diminished exclusivity of a BRICS Plus configuration could make a difference to perceptions of legitimacy and effective advocacy on development issues. The power of successful coalitions in today's multipolar world is undeniable.

In this sense, the BRICS grouping is a distraction.

Оригинал публикации: http://www.scmp.com/comment/insight-opinion/article/1594460/can-brics-lead