Back in 2001, Goldman Sachs’ Jim O’Neill coined the term BRICs to describe the key fast growing developing economies of Brazil, Russia, India and China. But a dozen years later, is the focus on the BRICs misplaced? Indeed, is the group “broken,” as Morgan Stanley’s Ruchir Sharma has suggested?
“Although the world can expect more breakout nations to emerge from the bottom income tier, at the top and the middle, the new global economic order will probably look more like the old one than most observers predict,” Sharma wrote earlier this year. “The rest may continue to rise, but they will rise more slowly and unevenly than many experts are anticipating. And precious few will ever reach the income levels of the developed world.”
Each day this week, beginning with Russia, a leading analyst will assess the prospects of a BRIC nation and weigh in on whether it still deserves its place in a group of economic high flyers.
By William Pomeranz, Special to CNN
Editor’s note: William Pomeranz is deputy director of the Kennan Institute for Advanced Russian Studies of the Woodrow Wilson Center in Washington, D.C. The views expressed are his own.
Created by bankers as a catchy acronym to entice foreign investors, the BRICS – first Brazil, Russia, India, China and then South Africa – have subsequently morphed into a loose association of countries with an emerging global view. The group now gathers annually to discuss its common aspirations, yet it still has few underlying structures.
In light of its origins and inchoate organization, the BRICS could be accused of being a Potemkin village – all show and no substance. Russia, of course, invented the Potemkin village and knows how to exploit its practical – and symbolic – uses. As a result, Russia highly values its BRICS membership and wants to deepen its cooperation even as the economic dynamism behind the original concept has begun to run out of steam.
To the extent that the BRICS have a common core, it unites a group of emerging market countries that had no input in drafting the rules of global commerce. Russia lacks the economic clout to revisit these conventions, so it needs its fellow BRICS members to change the rules of the game – or at least create alternative institutions that get around these rules.
Russia has used its influence to push the BRICS in the latter direction, in the process giving some shape to this amorphous association. In particular, the BRICS have called for the creation of a development bank that would aid emerging market countries in times of economic crisis as well as fund major infrastructure projects. The BRICS also want to establish its own credit rating agency, thereby breaking the monopoly that the western agencies possess in evaluating potential projects.
But the BRICS provide Russia with geopolitical cover, as well. Putin’s foreign policy is based on one overriding principle: national sovereignty. No country or international organization has the right to interfere in another nation’s internal affairs, a viewpoint largely shared among the BRICS countries.
The BRICS approach also coincides nicely with Russia’s vision of a multipolar world and further holds out the prospect of increased multilateral trade between its members. So from Russia’s perspective, the BRICS remain a highly valuable concept that has already produced some tangible results.
Russia’s problem, as it were, is that it believes in the BRICS too much, and wants to give this still nascent grouping of nations a more defined institutional structure. On the eve of the March 2013 meeting of BRICS leaders in Durban, President Putin talked of transforming the BRICS from a dialogue forum to a “full-scale strategic cooperation mechanism that will allow us to look for solutions to key issues of global politics together.”
Any attempt at a more integrated union, however, could negatively impact the organization’s long-term prospects. Commentators have long highlighted not only what unites the BRICS but also what divides it: entrenched historical animosities, distinct political systems, unequal economic resources, etc.
Russia has always been the odd-man out of the BRICS, with a more traditional economy based on raw materials extraction as opposed to economic innovation, high-tech manufacturing, or the provision of services. Russia’s current economic troubles will invariably renew the debate as to whether Russia even belongs in the emerging market category – and the BRICS – at all.
All the BRICS countries face major economic headwinds that could in and of itself doom the enterprise. China remains the key player; its status as the second largest economy in the world makes its relevant, with or without the BRICS, and it could walk away from the project at any time.
Brazil, India, and South Africa could, for their part, survive the breakup of the BRICS as well, especially since they already have an organization (the IBSA Dialogue Forum) to fall back on. Russia is not so fortunate. Indeed, its other major international trade initiative – the Eurasian Union – may soon come crashing down if Ukraine signs its association agreement with the European Union. So, in many ways, Russia is more invested in the BRICS than its fellow members.
The global economy may well be moving to a post-BRICS world, with a declining interest amongst investors in emerging markets. But even if that is the case, it is probably too early write off the BRICS. At this stage, the BRICS has ceased to be just a collection of disparate countries at various stages of economic development but has evolved into something more tangible. It specifically provides Russia with an important platform that supports the country’s broader geostrategic interests.
The ties that bind the BRICS, however, remain tenuous at best. If Russia pushes further integration too hard, the BRICS could easily unravel, and Russia would have nothing to replace it with.
The right-wing news media has been lying about Russia for decades on end! Why not one more time? The tragedy is that after the breakup of the Soviet Union, the right-wing thugs in Washington took full advantage of it and went on with their plans of global expansion, especially in the Middle East! This iniquity needs to end.
The right wing media was always lying - who cares, it is like rain in fall in Seattle.
COMPLAINT TO THE CHILDREN OF OBAMA, NICOLAS MATURE, CRISTINA KIRCHNER, AND KINGS EUREPEANS RUSEF DILMA INCLUDING THE PRINCE OF SPAIN.
CLAIM OF DOLLARS EACH 1,000,000 TELOMER DAMAGED.
BILL BUSH, CLINTON AND OBAMA CNN EDIENDO JOURNALISTS.
OTHER TEXTS THAT WE ARE NOT ALLOWING POST.
WE DO FOR THESE TEXTS ATRA-IEZAN PROGRAMMING LINES.
COMPLAINT TO THE CHILDREN OF OBAMA, NICOLAS MATURE, CRISTINA KIRCHNER, AND KINGS EUROPEANS RUSEF DILMA INCLUDING THE PRINCE OF SPAIN.
Why USA needs Russia? Russia is the biggest market outside the NATO alliance. Russia gives us great benefits, are open for US products and share similar culture. In contrary, in China, USA companies did not achieve any success, because Chinese simply won't buy American.
Mike, Please do not pretend to be an American. You're not fooling anyone.
What is discouraging is the myopia of the United States Department of Commerce. The bullet train that Russia has just agreed to sell India is something that America should have built! Otherwise, India will be drawn more and more into the Russian orbit!
The BRICS isn't a union of regional countries, as most associations are. Geographically the BRICS members are – with the exception of China and Russia – far apart from each other. They don't share same regional concerns, that often bring members together.
Russia is a key member of the Shanghai Corporation Orgainsation as is China. Together they have the whole Central Asia as their realm.
Russia is a member of the Asian-Pacific Economic Corporation. Last year it hosted the summit in Vladivostok.
Sofar the European Union is the only association that has regional and global clout!
for now the eurasian union looks great so far and i would also consider the asian union idea of some sort
Russia and US have no ties, no common interests, no relations worth mentioning. The latest lame attempts of American administration to destabilize Russian political situation and to push Russia into submission with wave upon wave of anti-Russian propaganda only lead to Putin kicking out USAID contraption out of the country and finally taking hard stance regarding US drive for global dominance. Whatever BRIC or some other combination, the general strategic line should stay the same: Russia should turn its back on US and focus on what is important: building strong ties with countries that will become the true world leaders in the near future!
True, but it is also true that a lot of American companies have great success in doing business in Russa. Ford os one of them.
What is actually good about Putin's policies is the fact that it is Russia who desides now what to take from US and what to reject based solely on pragmatic analysis of benefits and costs for Russia. This mode of operation is completely different from US congress who, for example, blocked helicopter deal for Afghan army despite the fact that Pentagon actually wanted this deal to go ahead. Basically Congress desided to block the deal to punish Russia for bad behavior in an unrelated matter, like the alleged weapon sales to Syria, and/or Magnitsky matter, and/or poor gay rights record. This logic is on the level of kindergarden kids. If Russia would act the same way, it shoul block US space flight in retaliation to Magnitsky law or some other unrelated matter.
The sober Chinese have explained BRICS in one sentence: "It is an issues-alliance. The members will agree on certain issues, but may not pursue an alliance on all issues". The pivotal agreement of the issues-alliance of the BRICS: A multi-polar world, not a global hegemony of the USA and "partners". The originator was Lavrov, who posed the idea to Celso Amorim at the UN. Then both went to the Chinese who were at first hesistant.
True, more precise, it is mostly not even economical, or political, but is rather based on common beliefs, mentality, and principles in dealing with international issues, which are distinct, and in fact opposite to the anglo-saxonian "burden of white man" Rudyard Kipling kind of mentality, or its modern version of US responsibility for the entire world.
In a somewhat more primitive way, BRIG is union of tired of United Stated.
Russia must be destroyed! Instead of Syria, Lybia and all other countries which posses no threat to us we have to look at the real danger. Yes, Russia is weak and failed state without any perspectives in the future but Russians are still alive and they have created a lot of problems for US. We have to start using we same tactic we used in USSR case – promote national and regional separatism in Russia, block Russia from international market, ban everything Russian and Russians themselves. Russia must be divided on a number of small national states like Tatar, Chechen, Circaussian states there Russians will be minority and could control nothing. I am sure with the political determination we can make them extinct for next 50-100 years.
Keep dreaming, moron.
U.S. number one terrorist in the world and therefore must be destroyed.
List of major U.S. intervention, covert operations and various war crimes
Article – another western propaganda for the American zombies. With these items and actions of the U.S. government over the past 20 years are no longer seems no doubt which country is the "evil empire"
Besides, it's not just the size of the economy, but other indicators in Russia is higher than that of all the BRICS countries:
Regarding the Realms of 2004 Airwnd. I will not be evolved in such politics. I only stay with those Government Person that I recognize. Any of these knew faces of people may have some set of the "before 911 Intel"!
BRICS want their own development bank and reinsurance firm. That is impossible without agreement on the reserve's structure and the assembly of a secure network. http://thirdeyeosint.blogspot.com/2013/11/brics-offer-hollow-talk-on-development.html
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