Introduction
This book brings together a body of research conducted under the Rising Powers in International Development Programme led by the Centre for Rising Powers and Global Development at the Institute of Development Studies (IDS) in the UK with partners across the five BRICS countriesâBrazil, Russia, India, China and South Africaâthat have come together to form the grouping since the first BRIC Summit was held at Yekaterinburg, Russia, in 2009. It combines primary and secondary research from scholars and experts from the BRICS and from OECD countries. The bookâs aim is to contribute to the growing field of study of emerging powers, recognising the need to understand the rising powers, and particularly the BRICS, in their evolving engagement with developing countries. The volume seeks to offer a comprehensive set of insights and a comparative perspective on the growing development cooperation activities occurring across the BRICS, and the national-level drivers for engagement within each country.
We also examine current institutional developments in BRICS development cooperation, paying attention to key actors from across the BRICSâthe state, business sector and civil societyâand their degrees of participation in development cooperation overseas. Finally, we examine the growing mobilisation of the BRICS as a collective body in multilateral forums, the significance of the BRICS New Development Bank (NDB) and BRICS development finance more broadly. Although the focus of this volume is not on the impact of the BRICS on the development trajectories of other countries, we believe that this analysis provides essential insights into their likely future impacts, given their significant potential for engendering poverty reduction and growth in low-income countries (LICs).
In this opening chapter we examine the emergence of the BRICS as a geopolitical association with systems for intellectual, policy and financial interaction and cooperation, and their growing impact on international development and global governance arrangements. The chapter also discusses the historical patterns of development cooperation across the BRICS. We trace the history and rhetoric of South-South cooperation (SSC), exploring whether it presents an alternative to the OECD-DAC model of development aid and the future evolution of this SSC model as the BRICS themselves develop. We then give a breakdown of the bookâs structure, briefly summarising the chapters that present successively the case studies of each BRICS country, civil society and the development of collective discourse and institutions in the light of the contrasts (as well as the commonalities) that mark this heterogeneous grouping.
As ârising powersâ, albeit at different points of transition from being recipients of foreign aid to becoming net donors, the BRICS have huge significance in the global development landscape and a growing role to play in generating economic development and poverty reduction in LICs and the developing world, particularly as they move towards growing collective ventures such as the NDB, established in July 2014. However, analysis of these countriesâ role in development has tended either to be restricted to a single country or to generalise about what they represent as âthe BRICSâ; there is little systematic understanding of how each countryâs individual activities and their distinct development discourses and agendas relate to those of other members of the grouping, as there has been little comparative study into what each of the BRICS has been doing in their development practices, hence little international understanding of their domestic discourses and attitudes towards development cooperation.
The studies presented in this book seek to address this information gap. The volume offers a comparative lens on the BRICSâ activities in development, with a systematic framework of analysis of the political economy drivers and normative discourse for each of the five countries. Notably, the book brings together a set of perspectives from each of the BRICS through a network of authors based both in BRICS and OECD countries, who combine comparative and international perspectives with distinct insights into the internal narratives within each BRICS country. This volume therefore forms part of an emerging tradition of joint analysis by scholars from the BRICS and OECD countries (e.g. Chaturvedi et al. 2012; Li and Carey 2014; Sidiropoulos et al. 2015, Gu et al. 2016), which complements analysis carried out by experts based in the Global North or the BRICS countries themselves (e.g. Esteves et al. 2011; Mawdsley 2012; Abdenur and da Fonseca 2013; Carmody 2013; FuDan 2013; Nadkarni and Noonan 2013; Gu et al. 2014; Kragelund 2015; Larionova and Shelepov 2015; Stuenkel 2015).
Since we began the research for this volume in 2012, the topic of the BRICS has attracted even more significant interest both in and beyond Western states, particularly following the establishment of the BRICS Development Bank, with the growing visibility of collective actions from the BRICS as a bloc. There has also been a substantial growth in interest in the BRICS states themselves, as they increasingly engage in mutual learning from each otherâs development cooperation experiences and seek to observe and understand how each country is doing with regard to engagement in development cooperation practices. Meanwhile, audiences based in LICs, particularly in the African region, have begun to search more actively for information regarding the activities and motivations behind growing BRICS engagement in their countries, the implications of this for their domestic development, and the domestic and international political economy drivers behind this development cooperation. As we argue in this volume, understanding these drivers requires careful attention to history, both for each individual country and for the BRICS grouping as a whole.
The Beginning: Whatâs in an Acronym?
It is commonly understood that the political association now functioning under the acronym BRICS was inspired by the acronym BRICs, created in a paper written in 2001 by Jim OâNeill (now Lord OâNeill), then chief economist of Goldman Sachs. The Goldman Sachs article proposed that on the basis of their dynamic economic performance in the 1990s, Brazil, Russia, India and China would be the drivers of world economic growth in the foreseeable future and should all be invited to join the G8 (Russia had been part of the G7/8 since 1997) (Goldman Sachs 2001). The first decade of the new millennium validated this economic prognosis. And in 2008, in the midst of severe financial crisis, all of the BRICs were included along with other major players in the global economy in the G20 Heads of State Summit, an historic global governance innovation created overnight by building on the established G20 Finance Ministers process which included South Africa as well.
Yet the etymology of the BRICs can be derived another way, more closely entwined with the ongoing political association that held its first Heads of State Summit Meeting in Yekaterinburg, Russia, in 2009. Here, the history begins with the RIC clubâRussia, India and Chinaâmeeting informally in New York in the margins of UN General Assemblies from 2003, and annually on a stand-alone basis at the level of foreign ministers since 2005. The idea of establishing a BRICs grouping came as a carefully thought-through Russian initiative worked out by Foreign Minister Lavrov and President Putin. In 2006, Russian foreign minister Sergey Lavrov invited Brazilian foreign minister Celso Amorim (building on a long established personal friendship) to an informal lunch of RIC foreign ministers in New York. Following from that first contact and on the initiative of President Putin, a BRIC foreign ministers meeting was convened in September 2006 in New York, and again in 2007, on the fringes of the of UN General Assembly. The first stand-alone BRICs heads of state meeting was convened by President Medvedev in Yekaterinburg in July 2009. After the second BRICs Summit meeting in 2010 in Brasilia, an invitation to South Africa to attend the 2011 Summit meeting in Sanya (Hainan, China) as a new member generated the acronym BRICS (Shubin 2013). Alphabetical serendipity thus complemented the economic and political logic, while serving to reinforce the existential ambiguity of the BRICS acronym with its dual etymology. 1
As a prelude to this volume on the development cooperation policies and programmes of the BRICS, in this introduction we map out some of the economic and geopolitical dynamics that underlie the BRICS phenomenon and its relevance in an era of increasingly complex, interactive political and economic challenges at subnational, regional and global levels. As will become clearer later in this introduction and in the country chapters that follow, there is at this point not much concrete collaboration among the BRICS in the field of development may change as the NDB established by the BRICS begins to function and Chinaâs ambitious regional development initiatives, including the Asian Infrastructure Investment Bank and One Belt One Road Initiative, the Johannesburg Action Plan of the Forum for China-Africa Cooperation (FOCAC) and the cooperation agreement between China and the Community of Latin American and Carribean States (CELAC), gather steam. Against this background, we look ahead in a final chapter, to the prospects for a more coordinated approach by the BRICS to their development cooperation endeavours. Throughout the volume we consider the extent to which the BRICS as a political association is promoting multidirectional development learning across a range of public policy fields both among its members and more widely.
The BRICS as an Economic Vector
As a symbol of the broader emerging markets phenomenon, the BRICS acronym, applied in its broader common usage, has captured a remarkable transition in the global economy. According to the Chief Economist of the IMF, in the 1980s, emerging and developing countries accounted for 36 % of world output in purchasing power parity terms, and 43 % of world growth in that decade. In 2010â2015 those numbers leapt to 56 % of world output and 79 % of world growth. The conclusion to be drawn is that a predominantly advanced developed country lens is an ever more outmoded approach to viewing the world economy (Obstfeld 2016).
The emerging markets story, including the BRICS and beyond, has thus been a powerful catalyst for trade and investment and poverty reduction globally over this period, notably helping to boost growth in the Asian, Latin American and African regions. This âshifting wealthâ phenomenon has underpinned the basic agenda of the BRICS as a political association working to shift global governance norms and arrangements established under a US-led post-World War II, to reflect the present and future configuration of world economic and political power.
At the same time, the extraordinary role of China in generating the emerging markets phenomenon in general and the economic trajectories of the BRICS as a particular group is essential to this story. As it integrated into the global trade regime and opened up to foreign investment, Chinaâs growth surged, generating a super-cycle in commodities which lifted growth rates in commodity-exporting countries around the world, in rich and poor regions alike. Chinaâs own investments in creating commodity supply chains further pushed this process, along with the âgoing outâ policy to encourage direct investment by Chinese companies, notably in the construction and information and computer technology (ICT) industries (Gu 2009 and 2011). When China countered the global recession of 2009 with a major investment package for provinces and local governments in China, the macroeconomic impact via commodity markets was global, helping commodity exporters to survive the financial crisis generated in the financial markets of the USA and Europe. Among the major beneficiaries were fellow members of the BRICSâBrazil, Russia and South Africa.
From 2014 the BRICS economic vector changed. Chinaâs move to a lower ânew normalâ growth path based on domestic consumption and decarbonisation of the economy rather than investment and exports has pushed the commodity cycle into reverse, exposing the weaknesses in the economic structures and testing the political systems of the commodity-exporting BRICS. Brazil, Russia and South Africa each have particular structural and political challenges of a medium-term nature and are unlikely to be in the ranks of emerging country growth stories again until they find a new way forward. Meanwhile it is India that is moving forward at a fast pace (albeit with some recent uncertainty), spurred by economic reforms that favour private sector development and mass consumption, with ICTs helping to rationalise and improve poverty reduction programmes. 2
Assuming that China will be able to manage its ambitious and comprehensive reform agenda in a way that maintains the ânew normalâ growth rate of 6.5 %, there is the medium-term prospect that together China and India, with a combined population approaching some 3 billion people, will be major drivers of global growth into the medium- and long-term future. This prospect is important not only for the other BRICS but also for the global economy and development prospects at large, underlining the global significance of the issues raised by the financial volatility in China that has emerged in 2015 and early 2016. 3
The cogency of the BRICs as an investment category has thus changed radically. For the ten years through 2010, the MSCI Bric Index had returned 308 % compared with a 15 % return on the Standard and Poors Index in that period. But with other fast-growing developing countries emerging onto the scene, a new larger category of emerging markets has become a more compelling investment story (OâNeill et al. 2011). With this ongoing change, Goldman Sachsâ emblematic BRICs Fund declined by 21 % over 5 years and in 2015 was folded into a wider Goldman Sachsâ Emerging Markets Equity Fund. The original BRIC investment story was over. But the story of China and India as major global growth engines, now forecast at between 6â8 % growth per annum for the next two years, and with the possibility of maintaining such growth through to the middle of the century, would indeed change the shape of the global economy and hence the shape of global governance and development patterns.
The BRICS as a Political Vector
What could be the cogency of the BRICS as a political vector in such a scenario, where it is surmised by some observers that, by mid-century, India would be as large as the US economy and China would be 50 % larger than the India and the US combined? (Merchant 2013) The three other BRICS, with their complementarities as resource suppliers, would be pulled along by such a China and India growth vector, as would many other developing and developed countries, albeit in a world of declining resource intensity as green growth and broader technological advances change the nature of demand for goods and services and for labour and human capital. Clearly, such scenarios need to be approached with a degree of caution. Nevertheless, the BRICS are not alone in facing uncertainty, which also continues to affect the OECD cou...