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Thursday, 5 April 2012

BRICS Ascendant

Readers of most Newspapers in the postindustrial economies, and the wider spectrum of society that half-notice news headlines on television and radio, have been left unaware of the fact that the last days of March produced major news in the field of Political Economy, from Delhi. A meeting of the Heads of Government of China, India, Brazil, Russia and South Africa disappointed US and EU delusionists who hoped that major areas of disagreement - and different perceptions of their national interests - would cause this group of countries [commonly called the BRICS] to come to no practically-useful agreements. They instead issued their Delhi Declaration summarising a developing shared view of the state of the global economy, an increasing frustration with the unfairness of the nineteen-forties institutions that regulate world affairs [insofar as such matters are regulated], and a shared determination to gain appropriate recognition for their group - and for its members individually - in global institutions.

Their importance in the global economy has already gained recognition as a fact, as more of the goods in a typical European or American hardware store are marked as having been made in some of those countries; and oil, crops, minerals and other 'primary products' from those sources are increasingly important. China has gained control of the global market in 'rare earths' as well as a massive market share in simple manufacturing. Indian firms control globally renowned brands of high-quality cars and have exported their software building and managing skills into the highest technology laboratories and factories worldwide. Brazil is increasingly gaining respect for the balance between sectors that is being achieved as it grown rapidly. Despite the threat to economic stability that is posed by Zimbabwe-style pressure to dispossess 'white' firms and farms that comes from the 'left' of the ruling party, South Africa has managed to display economic data that currently justify their membership of the club. Enemies stress the weaknesses of Russia - declining population, oligarchy, corruption, the failure to establish 'real democracy' and the dubiety of the rule of law - but the combination of military strength and natural resources that always provided the basis for Tsarist power is still enough to ensure the global significance of the biggest country on the planet.

The Delhi group asserted that half of the world economic growth that is forecast for the next few years will take place in those countries. When 'the west' was in the lead, its Economists and politicians extolled their role as 'the locomotive' for the world economy: the concept has quietly been forgotten now that the BRICS can claim to be the motive forces for the present era. The most influential of the post-war institutions, the International Monetary Fund [IMF], was structured to serve the victorious wartime allies and even after many revisions to reflect changes in the world [and much weakening of the role of the US dollar] the EU together has 36% of the votes, the US still has 17%, and the BRICS together have just 11%: while their turnover is 28% of the global economy [and rising quickly as the west stagnates]. The Delhi assembly criticised this, demanded a reorganisation of the United Nations, and especially of the permanent seats on the Security Council, to reflect the shift in power. The rigidity of the World Bank - and the probability that yet another American would become its chairman - led to the BRICS examining the possibility of creating a South-South Development Bank through which they could lend money to each other and their emergent-country clients.

If the old-world institutions do not open themselves to recognition of the shift in the basic facts of Global Political Economy, they will compel the BRICS to set up their own parallel institutions: and the potential of global institutions to foster Peace among the Nations, which was promised to the whole world by the victors of 1945 - which included China and Russia and Imperial India - will be vitiated. The BRICS have the resources and the ability to go their own way: within the first half of the present century the Chinese and Indian economies will both be larger than the American. If these powers are not welcomed with due respect into the global institutions, the postindustrial countries will be much the loosers.

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