BRICS remains shine after a decade

By Yu Jie

While the world focuses on the saga of President Trump’s team and the bitter divorce between London and Brussels, the rest of us try to get on with life. For the upcoming Ninth BRICS (Brazil, Russia, India, China and South Africa) Summit in Xiamen, China should strike a more uplifting chord to the world.

One of key objectives of China’s presidency of the Bloc this year is for the five powers to strengthen their advocacy for economic globalization in the face of signals from the Trump administration of rising protectionism. 

Chinese President Xi Jinping speaks at the eighth BRICS summit in Goa, Oct. 16, 2016.[Photo: Xinhua]

As President Xi addressed at DAVOS earlier this year, “we should strike a balance between efficiency and equity to ensure that different countries, different social strata and different groups of people all share in the benefits of economic globalization”.

The timing of this campaign comes at a pivotal moment in the globalization. Both UN and the World Bank data indicate that, for the first time in two hundred years, overall global income inequality—a crucial measure of economic inequality—appears to be declining.

The BRICS have been the key contributors to this decline towards overall global income inequality. For example, the astronomical economic growth and very large population of China have lifted hundreds of millions of people out of poverty. That is what China should be proud of.

Within the North hemisphere, there is a trend of growing income inequality in many developed economies. The concerns over inequality and stagnant living standard have delivered a sweeping victory of Donald Trump’s “America First” agenda. The United Kingdom also voted to leave for the European Union for almost identical reasons.

These two opposing trends are pushing against each other, and lead to some unintended negative consequences to global order or disorder. There is also now important evidence to demonstrate the positive effect of growing income equality due to the continuous economic growth of the BRICS members.

The political crisis in Brazil over economic mismanagement and Russia’s uneasy relations to the West have reinforced the fashionable view, popular among governments and business of the developed economies that the BRICS bubble has burst

Yet on the world order, one must acknowledge the economic rises of BRICS have profoundly shaped the post-Cold War international affairs. The geostrategic intricacies amongst the Bloc and between other great powers also require diplomatic fineness to mitigate any potential conflicts. The ever closer global economic interdependence makes conflicts mutually destructive not a victory of any particular state.

By 2016, BRICS owns 43% of the world population, and 23% of the total world GDP. It is inevitable BRICS voice for greater clout within the existing international economic governance framework and in good attempts to provide meaningful alternative to complement current international financial architecture. 

On global climate change, BRICS also hold similar views---It is not just for flourished diplomatic rhetoric but more importantly, fighting for carbon reduction is a prerequisite to better economic well-being of BRICS’ own populations. This is also to demonstrate BRICS with a strong determination to make the world better.

Fighting global warming and projecting sustainable economic growth is not a contradiction but complementary to each other. BRICS have the strong willingness to do so. And the established green finance initiative within the BRICS Development Bank is a good starting point. 

Needless to say, BRICS members have so many differences yet share so much in common. It is important for five powers to not become self-obsessed, and to retain keen interests in what other members of the club want, expect, or fear from their interaction with one other.

It is a critical moment for China to deliver its own promise to the rest of the world—that is open to global economy and provides positive contribution to the rest.

China’s ethos of strengthening BRICS draws many similarities to other initiatives Beijing has proposed—that is to benefit many not the privileged few. The ambitious Belt and Road Initiative is not merely for China’s very own immediate economic interests, but shares its own experience of economic developments after 1979 to other emerging economies.

Beijing will incorporate some elements of “Belt and Road” initiative into this year’s BRICS Summit agenda such as increasing connectivity amongst the Bloc and facilitating better financial mechanisms to further infrastructure projects amongst five powers. It is also a sure way to harness the financial architecture exclusively for the BRICS that was built in the past ten years. Like many other international entities, it should not be forgotten the success of the BRICS, whilst clearly dependent on China’s objectives and actions, is also dependent on how much others are willing to cooperate with each other. If one hopes BRICS to remain shine, it is time to work on it now.

(Dr Yu Jie is Head of China Foresight at LSE IDEAS, London School of Economics and Political Science.)