A scheduled meeting of the BRICs – Brazil, Russia, India, China, the countries recognized by the Western world as at the top of the pile of so-called emerging economies – took place last Thursday, April 15. The meeting was truncated by a day as President Medvedev, suddenly preoccupied by the Polish airline tragedy in Russia that led to the death of the Polish leadership had to hurriedly return home, and by a similarly unanticipated return of President Hu Jintao as a result of the earthquake in his country. There was time, however, for a considered assessment by the BRICs of the role which it is now necessary for them, as well as other non-Western powers, to begin to play without delay in the management of the global economy.
The BRICs communiqué emphasizes the role which they have played since 2008, the beginning of the financial crisis that transformed itself into a virtual global economic crisis, by way of their participation in the Group of Eight and the Group of 20, particularly between July 2009 and the present, as well as by way of monetary contributions to the revival of the global economy. And emphasizing the change in the nature, and now intense interdependence of the global economy, they have noted in a chronology issued from China just before their meeting, the contribution of Abu Dhabi of a “10 billion dollar rescue fund to shore up the debt-ridden Dubai World, a state-owned conglomerate, whose debt default sent the world into another round of crisis shock.” In effect, they stress that in helping themselves they were also helping the major economic powers who recognize that Abu Dhabi’s contribution was also critical to sustaining the stability of a tottering global economy.
In that connection, they insist in their communiqué on the necessity for institutional balance in the current and future economic and political governance of the global economy. They “underline…[their] support for a multipolar, equitable and democratic world order, based on international law, equality, mutual respect, cooperation, coordinated action and collective decision-making,” and express their “strong commitment to multilateral diplomacy with the United Nations playing the central role in dealing with global challenges and threats.” Further, that the “broadened dialogue and cooperation of the BRIC countries is conducive not only to serving common interests of emerging market economies and developing countries, but also to building a harmonious world of lasting peace and common prosperity.”
These sentiments reflect the evolution of their conviction that in both economic and political governance, the post-1945, San Francisco Conference approach establishing the UN structure has become outmoded. The BRICs have been reinforced in this conviction, and in their insistence on acting upon it, by something that has certainly surprised the Western powers, and in particular the United States authorities: the fact that as the North Atlantic powers have struggled to resume economic growth in 2009, and appear to fear possible relapses of their economies, BRICs like China, Brazil and India, have resumed 6 per cent and upwards economic growth rates, as have some of the other Asian economies like South Korea, Singapore and Indonesia, and some African economies now fuelling the demand of China and other emerging economies for energy resources.
In the North Atlantic world itself, this phenomenon has given rise to concern about the premises underlying economic growth which they have held for many years, but particularly since the Reagan-Thatcher years of the 1980s into the beginning of the current new decade. Both themselves and the BRICs recall the amount of lecturing to the developing states that came out of North Atlantic leaders, IMF and World Bank economists and many of their academia, on the misuse of the state and government in the organization and management of Third World economies, and their insufficient attention to operating “open economy” systems, along with an over-focus on regional economic integration rather than international economic integration – that is, more extensive opening to the successful Western economies. Latin American states in particular, and including Brazil, felt the brunt of these criticisms as they were lectured on their own responsibility for the “lost decade” of the 1980s. This Western criticism was accompanied by their acceptance of theses coming from the universities that the demise of the Soviet Union meant the end of any legitimacy assumed for non-multi-party modes of governance, and the emergence of acceptance of a necessary link between so-called free market economics and multi-party modes of national governance.
While China was not particularly worried about these criticisms, given that it had begun to enunciate a new economic strategy from the end of the 1970s, it still, over intervening years, refused to accept the link made by Western governments between the capacity for economic growth and Western modes of political governance. It maintains this insistence to the present, while carefully negotiating its way into the WTO – the main arena of global economic governance. The BRICs, however, and particularly the larger Latin American states have, over the years worked their way towards democratic modes of governance and away from the periods of dictatorships that came to accompany the lost decade. Further, (along with India, a long-devotee of its own mode of democratic governance) they seem to accept in their international diplomacy that countries need by their own ways, however tortuous, to arrive at domestically satisfactory systems of participatory governance.
This inclination seems to indicate their approach to international relations where these involve apparent pressures placed by the North Atlantic powers on states deemed recalcitrant by them, like, in the current period, Iran.
In their responses to pressure from the United States and the United Kingdom that they join the proposed programme of sanctions on Iran if it does not respond to the resolutions of the United Nations, they seem to be insisting on the need for a continuation of negotiation and diplomacy within the UN, rather than the dominant states’ framework, with “the United Nations playing the central role in dealing with global challenges and threats.” And in other engagements they seem to insist that in such discussions, there be no linkage, as recently made by US Secretary of State Clinton, between Iran’s nuclear strategy and the nature of the country’s political system.
The entreaties of the BRICs in recent years, particularly in the realm of management of the global economy, and perhaps in anticipated response to the BRICs conference, were taken on by none other than World Bank President Robert Zoellick, former US chief negotiator in the DOHA Round, the day before the BRIC conference, and in anticipation of this week’s World Bank meetings. Zoellick has no doubt attempted to stem the persistent criticisms of World Bank and North Atlantic countries that have focused on their inattention to the realities and demands of developing states. He seems to seek to change the terms of the discourse. In order to demonstrate that the multilaterals are willing to meet the BRICs halfway?
To that end he has insisted in a speech on April 14 entitled, ‘The End of the Third World?’ that the currently still used descriptions of global economic stratification must now be abandoned: “the outdated categorizations of First and Third Worlds, donor and supplicant, leader and led, no longer fit.” In the context of the impact of the global economic crisis on major and minor economies, and in the context of the surprising rapid rates recently experienced by some developing countries, he insists that “the implications are profound for global cooperative action, for power relationships, for development and for international institutions. The global economic crisis shows that multilateralism matters… as we witness a move towards multiple poles of growth…”
No doubt these words will sound like sweet music to the ears of some in the Third World. They may well see these signals coming from the head of the World Bank as indicating changes in both the structure and programmatic content of the international financial institutions, with a recognition of the challenges which the BRICs have been making. Others will want to wait on what practically follows in the decisions of the institutions, indicating the extent to which Mr Zoellick has the ears of the currently dominant master of these institutions.
Yet others will, however, note the hard role played by Brazil in the WTO, in achieving its objectives vis-à-vis the US and Europe in respect of the cotton and sugar trades, and intellectual property matters; the role played by China in its resistance towards undertaking what it might consider intemperate changes in the exchange rate of the yuan; and the continuing role played by India in not being externally pushed into changes of trade policy before its own system is ready for them. And they will note the BRICs collective insistence that an important aspect of recognizing the nature of the changed world – that is, reforming the IMF/World Bank, will require “first and foremost a substantial shift in voting power in favour of emerging market economies and developing countries to bring their participation in decision making in line with their relative weight in the world economy”; and that involved also, is recognition of the need for “an open and merit based selection method, irrespective of nationality, for the heading positions of the IMF and the World Bank.”
Some hard bargaining between the old powers and the emerging powers is to be anticpated. But in the meantime, we should surely be beginning to wonder where we fit into all this – the subject of another editorial.
