JANUS 2015-2016

3.24 • Integração regional e multilateralismo

BRICS: it makes sense to speak of emerging powers? Alfredo Valladão

The “BRICS” concept is now often associated competitive finished products – thanks to a cheap to commodities boom and bust cycles, like in co- with the idea that Western capitalism is on the labor force – that are mostly sold in Europe and lonial times, while its industries and services are wane and that economic power is being “re-bal- the US. India has benefited from the outsourcing rapidly losing their competitiveness. Russia, with anced” to the benefit mainly of Asia and, particu- to low-wage environments of many services sec- its huge internal imbalances – demography being larly, of the big “Emerging Powers” – Brazil, Rus- tors indispensable for the workings of the global one of the most intractable –, its frozen politi- sia, India, China and South Africa. But the present economic conveyor-belt – another “niche” strate- cal system and its massive reliance on export of difficulties and impasses of the BRICS economies gy. All this mass of final products churned out by hydrocarbons, is extremely vulnerable to the on- are a clear sign that, far from imposing their power the planetary transnational chains of value has to going natural and shale gas revolution – and has or becoming “decoupled” from the Euro-American be bought somewhere. In current dollar prices, to cope with Western sanctions as a consequence markets, their future prosperity is still very much the US and European markets represent around of its adventurism in Ukraine. India, in spite dependent on the decisions the Western world is two thirds of the world’s final private consump- of the new government of Narendra Modi, is taking to manage the global crisis. tion, while China, for example represents around struggling to survive the global credit crunch 4%! and alarming slowdown of its globalized service An economic boom heavily dependent The uncomfortable truth is that we are not enter- sector. Indian elite still cannot muster the will on Western markets ing a multipolar world but a growing and strong- to tackle seriously the country’s most intractable BRICS today is mostly an acronym that lumps ly interdependent world. We are living now in challenges: mass poverty and an appalling lack of together a very heterogeneous group of countries a planetary economy steered by a transnational modern infrastructure. with mostly incompatible interests. There is still production and financing logic, which rests on no congenial vision about how the world should the Euro-American consumers’ appetite, the shift- or could be run, just an agreement that serves ing strategies of global corporations and on the each member’s own push for more “voice” in well functioning of the integrated global financial In a globalized world, international decision-making processes. More- markets, heavily dependent on the liquidity and “hard power” does not over, Russia looks like the odd men out – less financial “deepness” provided mainly by Wall an “emerging” than a “submerging” former su- Street and the City of London. This new global equate with omnipotence. perpower – and South Africa has been recently production logic, coupled and promoted by the added to the group more for political expediency twin revolutions in Information and Communica- and political correctness than economic reasons. tions Technology (ICT) and transports, has sub- China for its part, is suffering a slackening of pace Actually, only Brazil, India and China – “BIC” – stantially clipped the power and elbowroom of in its domestic economic growth. The formidable can more probably be defined as Emerging Powers. national governments, including the most pow- imbalance between investment and consumption However, this definition has nothing to do with erful ones. In fact, governments are becoming, has been feeding a dangerous financial bubble. military hard power. Even China or India, which more and more, “local managers” of a “global China’s industrial “niche” is still impressive but have substantial military capabilities, have still a logic” where “a-national” networks of non-gov- it is being eroded not least by raising domestic very long way to go before becoming significant ernmental actors are proliferating (transnational wages and the advent of new production technol- global contenders in this domain. The fact is that firms, investors, media, NGOs and international ogies – like “3-D Printers”, advanced automation, the emergence of the BIC countries is essentially institutions, “sub-national” authorities, criminal “Big Data”, or new cooperative “on-line” tech- linked to their economic successes. But these networks, etc). niques for managing innovation and productive impressive attainments during the pre-Lehman processes – which are threatening the present Brothers decade of “happy globalization” are BRICS: the next “bubble”? model of transnational production chains of closely associated with these economies’ cozy To pursue their economic growth strategies, a value. The much-talked solution of developing integration into the global production chains of sine qua non condition for their “emergence”, its internal market is still blocked by a cantan- value, consumer markets and financial system. BRICS have a huge stake in keeping this global kerous conundrum: there will be no domestic Schematically, Brazil did fine, mostly because economic bicycle running. The fact that Europe- private consumption boost without a serious lib- of the boom and high prices of its commodities an and American consumers buy less and save eralization of credit. But credit control is now the exports, a large part of which (iron ore and soya) more is having brutal consequences down the core foundation of the Communist Party’s hold was shipped to feed China’s economic engine. geo-economic production line. China, India and on power. In fact, the tension between the na- The surpluses engendered by this raw materials Brazil’s economies have been struggling to try to tional power logic and dependency on the global bonanza allowed the successful social policies of prevent a significant slowdown that has picked economy is putting a heavy strain on the sustain- the Cardoso and Lula governments, which boost- up pace since the end of 2011. ability of all BRICS development models. ed Brazil’s domestic market. China thrived mainly One should never forget that it is much easier to because it carved an extremely profitable “niche” grow from 0 to 100, than to expand from 100 to The American Executive Branch inside the global chains of value, assembling in- 110. The first phase can benefit from heavy, and as guarantor of last resort dustrial goods for export. The Chinese machine sometimes authoritarian, government interven- “Global players” need sustainable economic imports raw materials from Latin America, Africa tion. The second part – a jump in innovative and achievements. But to succeed, “emerging pow- or the Middle East, and components and technol- value-added products and processes – is heavily ers” have to accept being closely integrated in an ogies from South East Asia, South Korea, Japan, dependent on private entrepreneurship and interdependent global economy, which heavily Germany or the United States. Then Western, Jap- creative freedom for individuals, particularly constrains their space and capacity to act as inde- anese, Taiwanese and some mainland Chinese in a global economy driven by competition and pendent players. On one hand, BRICS are push- companies assemble these elements into very innovation. Brazil is in danger of getting hooked ing for being recognized as equal partners at the

148 BRIC, initials of Brazil, Russia, India, China, became BRICS when South Africa joined the group, in 2011. Five countries on four continents, accounted for nearly Population 54 143,8 202 1267,4 1364,3 40% of world population. Area 1,2 3,3 8,5 9,6 17,1

Import 121,9 239,1 308 460,4 1960,3

Export 91 225,1 317,4 496,7 2342,7

GDP 349,8 2066,9 1860,6 2346,1 10360,1

Brazil: Agricutural products Russia: Natural resources Total combined population of the BRICS countries – 3 billion people – 42,1% of the global India: Intellectual resources Total area – 39,7 million sq kilometers – 26,7% of the global China: Powerful industrial base Total GDP – 16,9 Trillion dollars – 21,8% of the global South Africa: Rich mineral resources

Brics countries: facts and figures. Fonte: http://www.brics-info.org/wp-content/uploads/2015/07/BRICS-Infographics.png.

highest levels of the international decision-mak- tion, besides its national “constituencies”, has tries; it is essentially a “power-multiplier” lever ing institutions. On the other hand, they reject to serve a much larger one, made of “globalized” for each member to pursue its own national the idea of being constrained by these same in- domestic players and foreign interests. agenda. Multilateralism as “lucrative multilater- stitutions since it could become a drag on their But in a globalized world, “hard power” does alism”1. “national” rise to power – the argument being not equate with omnipotence. Washingtonian It is quite obvious that the big emerging coun- that they cannot be committed by rules or an or- power is essentially conservative: keeping the tries – or should we say “governments”? – will der created by others before they got involved. present liberal paradigm from sinking. Unfor- play a growing part in international affairs. But This tension is clearly apparent in the G-20 pro- tunately, short of finding new and immediate for the time being, they will act more like pow- cess. Since it’s re-launching after 2008, all the sources of dynamic economic global growth, erful reluctant followers than leaders or co-lead- participant emerging economies have dutifully the current “solution” is a huge destruction ers. The great paradox of an interdependent subscribed, in every preamble of the Summits’ of physical and human capital – a huge fall in world without “government” is that rules-based final declarations, to the whole catechism sum- production capacities and demand – so a new “governance” requires a public actor willingly marizing the fundamentals of the present global cycle of strong reconstruction growth can be re- and capable of defending and underwriting liberal order. But their contributions in terms launched. But who is going to pay the bill? There the basic implementation of these rules. The US of proposals or new ideas about how to tackle will be winners and losers, and that is the core Executive Branch is the closest thing available the global crisis and how to organize the world puzzle that the present multilateral dialogues today to take on that task, even if it is not always order is close to nil. No wonder the “old” G-7 of and negotiations are supposed to crack. Under enchanted by or ready to accept this role. All Western industrialized states is rising again from Washington’s ultimate umbrella, cooperation other important players – European and Emerg- the ashes of this lack of concrete implication of between the twenty or so biggest economies ing – will have to answer a simple question: the emerging countries in the nuts-and-bolts of is essential. But the end result will reflect each are they ready to build capabilities and the will crisis management. player’s economic and political power, as well to take on this kind of responsibility or will With nobody able to solve its domestic prob- as its willingness to accept responsibilities in they just content themselves with remaining lems alone, “multilateralism” and world “gov- building a new global growth strategy and pro- grumbling free-riders of US “Executive” power? ernance” is the new catch-concept. A world tecting it against those who perceive themselves The answer will make the difference between “government” being clearly a non-starter, the as losers. “rule-makers” and “rule-takers”. Emerging problem is always coated in layers of inter- Powers have learned that “if you’re not at ta- governmental cooperation between sovereign The limits of “lucrative ble, you are on the menu”. But they still have states. But still, it won’t work without a guaran- multilateralism” to learn that when you sit at the table, you also tor of last resort. Someone or something with But how the Emerging Powers are playing their have to buy the food, do the cooking and wash enough “hard power” is needed to safeguard cards in the messy negotiations of this “Global the dishes. n the basic elements of the current functioning New Deal”? BRICS countries want “voice”, not of the global economy: the safety and constant “change”. They are not fighting for another modernization of open global communica- “order” but only to acquire the political tools tions; the security of space-based capabilities to better defend their own national interests in- and global maritime commercial flows; the side the present framework, which by the way protection of oil production and flows from the they are not ready to become responsible for. Gulf; a huge capital market sustaining the glob- Brazil, Russia, India and China have very differ- al financial system; a reserve currency of last ent strategic interests and their national agendas resort… Like it or not, the global buck stops are, most of time, competing with one another. in the United States or, more precisely, in the A permanent political group serves them well US Executive Branch (White House, Pentagon, every time they decide to join forces on some Treasury, Intelligence Agencies, Departments of very specific single issue where they can exercise Notas State…), which today does not always reflect a veto power. This grouping does not seriously 1 Holslag J. 2006. ‘The EU and China: the Great Disillusion,’ BICCS pure “American” interests. The US Administra- enhance integration between its member coun- Asia Paper, 1 (3) (5 Nov): 1-15.

149