Of Might and Right
What’s in a BRIC?
Joseph S. Nye
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SAO PAULO – Brazil, Russia, India, and China recently held their second annual summit in Brasilia. Journalists continue to lavish attention on these so-called “BRIC” countries, but I remain skeptical of the concept.
Goldman Sachs coined the term in 2001 to call attention to profitable opportunities in what it considered “emerging markets.” The BRICs’ share of world GDP rose from 16% in 2000 to 22% in 2008. Collectively they did better than average in the subsequent global recession. Together, they account for 42% of world population and one-third of global economic growth in the past ten years. Putting aside the United States (which ranks third in population), annual economic growth in the other four most populous countries – China, India, Indonesia, and Brazil – was above 5-6 % in 2000-2009.
Obviously, that is good news for the world economy, but an economic term has taken on a political life of its own, despite the fact that Russia fits poorly in the category. As the Beijing Review commented, “when Goldman Sachs created the acronym BRIC in 2001, neither the economists nor the rest of the world imagined that Brazil, Russia, India, and China would finally sit together to build up a substantial platform one day.” In June 2009, the foreign ministers of the four countries met for the first time in Yekaterinburg, Russia, to transform a catchy acronym into an international political force.
The BRICs hold $2.8 trillion or 42% of global foreign reserves (though most of that is Chinese.) So, in Yekaterinburg, Russian President Dmitri Medvedev declared that “there can be no successful global currency system if the financial instruments that are used are denominated in only one currency.” After China eclipsed the US as Brazil’s largest trading partner, China and Brazil announced plans to settle trade in their national currencies rather than dollars. Although Russia accounts for only 5% of China’s trade, the two countries announced a similar agreement.
After the recent financial crisis, Goldman Sachs upped the ante and projected that the combined GDP of the BRICs might exceed that of the G-7 countries by 2027, about 10 years sooner than initially believed. Such simple extrapolations of current economic growth rates often turn out to be mistaken because of unforeseen events. But, whatever the merits of this linear economic projection, the term BRICs still makes little sense for long-term assessments of global power relations.
While a BRICs meeting may be convenient for coordinating some short-term diplomatic tactics, the term lumps together disparate countries that have deep divisions. It makes little sense to include Russia, a former superpower, with three developing economies. Of the four members, Russia has the smallest and most literate population and a much higher per capita income, but, more importantly, many observers believe that Russia is declining while the other three are rising in power resources.
Russia today not only suffers more from the aftermath of the global recession, but it faces severe long-term liabilities: a lack of diversified exports, severe demographic and health problems, and, in Medvedev’s own words, an urgent need for “modernization.” As The Financial Times recently pointed out, just two decades ago “Russia was a scientific superpower, carrying out more research than China, India and Brazil combined. Since then it has been left behind not only by the world-beating growth of Chinese science but also by India and Brazil.”
When one looks closely at the numbers, the heart of the BRIC acronym is the rise in China’s resources, but the role of Brazil is a pleasant surprise. When the BRIC acronym was first invented, The Economist objected that “a country with a growth rate as skimpy as its swimsuits, prey to any financial crisis that was around, a place of chronic political instability, whose infinite capacity to squander its obvious potential was as legendary as its talent for football and carnivals, did not seem to belong with those emerging titans.”
Now, as The Economist notes, “in some ways, Brazil outclasses the other BRICs. Unlike China, it is a democracy. Unlike India, it has no insurgents, no ethnic and religious conflicts nor hostile neighbors. Unlike Russia, it exports more than oil and arms and treats foreign investors with respect.”
Since curbing inflation and instituting market reforms in the 1990’s, Brazil has shown an impressive rate of economic growth in the range of 5%. With a territory nearly three times the size of India’s, 90% of its 200 million people literate, a $2 trillion GDP equivalent to Russia’s and per capita income of $10,000 (three times India’s and nearly twice China’s), Brazil has impressive power resources. In 2007, the discovery of massive offshore oil reserves promised to make Brazil a significant power in the energy arena as well.
Brazil, like the other BRICs, also faces a serious number of problems. It ranks 75th out of 180 countries on Transparency International’s corruption perceptions index (compared to 79th for China, 84th for India, and 146th for Russia). The World Economic Forum ranks Brazil 56th among 133 countries in terms of economic competitiveness (compared to 29th for China, 49th for India, and 63rd for Russia). Poverty and inequality remain serious problems. Brazil’s Gini coefficient is .57 (1.0 is perfect inequality, with one person receiving all income), compared to .45 for the United States, .42 for China, .37 for India and .42 for Russia.
So, how seriously should analysts take the term BRIC? As an indicator of economic opportunity, they should welcome it, though it would make more sense if Indonesia replaced Russia. In political terms, China, India, and Russia are competitors for power in Asia, and Brazil and India have been hurt by China’s undervalued currency. Thus, BRIC is not likely to become a serious political organization of like-minded states.
Joseph S. Nye, Jr., a former US Assistant Secretary of Defense, is a professor at Harvard University and author of Soft Power: The Means to Success in World Politics.
Copyright: Project Syndicate, 2010.
www.project-syndicate.org
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belgradetokyo 05:11 11 May 10
Well, expecting an objective or, dare I say, positive analysis of its global competitors by a former US Ass-Sec of Defence is rather naive. BRIC is a true 21st century geo-political phenomenon combining geographically, culturally, and in many other ways disperate nations as a global counter- balance to the old world order. Unfortunately, Indonesia is not as yet ready to be a leading partner in this conglomerate due to its vulnurable economy and internal political situation, however, the door should be left wide open to ASEAN. BRIC's diversity and institutional ununiformness make it difficult to categorize and, therefore, isolate. Writing it off as dysfunctional and unsustainable only underlines the sense of unease felt by the upper echelons of a global power structure that is rapidly losing its influence.
oxforduniversity 08:27 10 May 10
Sorry but Russia is a superpower again, there is just so much information verifying Russia is a superpower again that your article is misleading the readers this article above.
Russia is also a Superpower; it is a state with a leading position in the international system which has the ability to influence events globally and its own interests by projecting its power on a worldwide scale to protect those interests.
Russia for fills the criteria of a superpower for its resources measured by its four axes of power: massive military, economic power, political power, and cultural (and the ability to use soft and hard power).Russia has as a massive political community that occupies a continental-sized landmass, has a sizable population (relative at least to other major powers); a super ordinate economic capacity, including ample indigenous supplies of food and natural resources; has a high degree of non-dependence on an international intercourse; and, most importantly has a well-developed nuclear capacity (in fact the worlds largest).
Russia is able to conduct a global strategy as a superpower including of having the ability to destroy the world (in fact more than the United States can); can command vast economic potential and world influence; and to present a universal ideology as Russia can project its power, soft and hard, globally on a world wide scale.
The facts:
Netanyahu calls Russia an important Superpower-Voice of America News editor by Robert Berger Feb. 15, 2010-http://www1.voanews.com/english/news/europe/Netanyahu-Heads-to-Russia-with-Call-for-Crippling-Sanctions-on-Iran-84341537.html
Transcript: Russia a Superpower in every Aspect-Premier.gov.ru - Feb. 16, 2010- http://premier.gov.ru/eng/events/news/9424/
"Netanyahu: Russia is an important "superpower"- ISRIA.com; Feb. 16, 2010- http://img237.imageshack.us/img237/861/primeministerputinneten.jpg
The Dangers of Nuclear Disarmament- Sergei Karaganov- Project-Syndicate News- http://www.project-syndicate.org/commentary/karaganov14/English
Azerbaijanis, Armenians can be good neighbors (Superpower Neighbor Russia)- News Az Tue 02 March 2010 by Akper Hasanov -http://www.news.az/articles/10482
The dangers of nuclear disarmament-TODAY’S ZAMAN News by Sergei KaraganovMay 1, 2010- http://www.todayszaman.com/tz-web/news-208967-104-opinion-the-dangers-of-nuclear-disarmament.html
Sergei Karaganov: Weapons that save us from ourselves-Scotsman News: 05 May 2010 - http://news.scotsman.com/world/Sergei-Karaganov-Weapons-that-save.6272226.jp
Obama restricts America’s use of nuclear arms-April 6, 12:45 PM San Diego Conservative Examiner by Robert Rische-Senator John Kerry declares Russia as a World Superpower-April 2010-http://www.examiner.com/x-36784-San-Diego-Conservative-Examiner~y2010m4d6-Obama-restricts-Americas-use-of-nuclear-arms
Kyrgyzstan conflict-Right after the uprising, on Wednesday, Russian Prime Minister Vladimir ... in a tug-of-war between the two rival superpowers-Sunday's Zaman by Dogu Ergil April 17, 2010 ERGIL-http://www.sundayszaman.com/sunday/yazarDetay.do?haberno=207039
The Dangers of Nuclear Disarmament-By Sergei Karaganov May 4, 2010- Saint Petersburg Times- http://www.times.spb.ru/index.php?action_id=2&story_id=31370
PM's visit underlines rising Indian interest in Ibsa, Bric-Business Standard News; Jyoti Malhotra / New Delhi April 16, 2010-http://www.business-standard.com/india/news/pm%5Cs-visit-underlines-rising-indian-interest-in-ibsa-bric/392092/
Snap Analysis: U.S. and Russia seek boosts from arms pact-Reuters by Paul Taylor; April 8, 2010-http://www.reuters.com/article/idUSTRE6371ZQ20100408
A Superpower Is Reborn-The New York Times: August 24, 2008-http://georgiandaily.com/index.php?option=com_content&task=view&id=6527&Itemid=68&lang=ka
Czech press survey- Russia showed by the Georgian war that it can be a superpower, while the European Union showed during the war that it is not able to be a superpower-September 1, 2008-http://www.ceskenoviny.cz/news/index_view.php?id=331160
“Venezuela's Hugo Chavez recognizes independence of breakaway Georgia republics, Russia is a Superpower”-Los Angeles Times by September 11, 2009 editor Megan K. Stack-http://articles.latimes.com/2009/sep/11/world/fg-russia-chavez11
Is Russia Warming Up For A New Cold War? Oct 20, 2008 by Brian Mciver- http://www.dailyrecord.co.uk/comment/columnists/showbiz-tv-columnists/brian-mciver/2008/10/20/is-russia-warming-up-for-a-new-cold-war-86908-20820901/
Medvedev or Putin: Who Holds Real Power in Russia? By Anya Ardayeva
Moscow
16 October 2008 http://www.voanews.com/english/2008-10-16-voa24.cfm
A multipolar world with multiple scenarii-The rise of China, the reborn of Russia as a superpower-Agora Vox News: January 2010-http://www.agoravox.com/comment/article/a-multipolar-world-with-multiple-11184
Washington announces Russia as a Superpower 2007-http://www.kommersant.com/page.asp?id=768929
The Cold Peace- Sept 9, 2008 Spiegel News http://www.spiegel.de/international/world/0,1518,575581-3,00.html
Russia is a Superpower CNN, US Senators telling the truth - CNN News August 2008- http://video.google.com/videoplay?docid=-9079543725663390621&ei=R2VGS4T4Lo2YqAPY8P3IDg&q=russia+superpower&hl=en#