POWER SHIFTS AND ECONOMIC CHANGE THE DECLINE OF THE WEST:RISE OF THE BRICS?
1. Transfer of Power “ The transfer of power from West to East is gathering pace and soon will dramatically change the context for dealing with international challenges -- This time, the populous states of Asia are the aspirants seeking to play a greater role ...” James Hoge in Foreign Affairs 2004 2
2. The Rise of the “Rest”? “ The real change America faces is not its own decline, but the rise of everyone else. The most extraordinary thing about the 20 years since the end of the Cold War is the unprecedented explosion of capitalist development across the globe. The gigantic wave of growth in China and India, not to mention Indonesia, Brazil, Turkey, South Africa, Russia and the oil-rich states, constitutes a shift of the same magnitude as America's rise to power after the Second World War ”. Fareed Zakaria The Post-American World . 2008 3
3. A New Historical Cycle? “ The West's long period of global dominance is ending, encouraged and accelerated by its own mistakes and irresponsible behaviour. We are entering a new historical cycle, in which there will be proportionally fewer Westerners, more Africans and Middle Easterners, and – with greater relevance economically and strategically – many more Asians” Dominique Moisi. European Voic.com. 15.2.10 4
4. Rise and Decline “The most significant political phenomenon of our new century (are) the relative rise of Asia, perhaps China especially, and its natural concomitant, the relative decline of the west as a whole and more particularly of both of its two greatest components, Europe and the US” Paul Kennedy . WORLD TODAY. Fall 2010 5
5. North to South: West to East “ There is no longer any question: wealth and power are moving from the North and the West to the East and the South, and the old order dominated by the United States and Europe is giving way to one increasingly shared with non- Western rising states. But if the great wheel of power is turning, what kind of global political order will emerge in the aftermath?” G. John Ikenberry. Foreign Affairs. May-June 2011. p. 56.) 6
6. The Rise of Asia “ The kind of incredible domination of the world that America and the West enjoyed for the last 200 years was a hugely artificial moment of history. For 1,800 of the last 2,000 years, the two largest economies in the world were consistently China and India. So by 2050, or earlier, the No. 1 economy will be China, No. 2 India,No.3 the United States of America — that’s the normal scheme of things” Interview 2011. Kishore Mahbubani: See also his: The New Asian Hemisphere: The Irresistible Shift of Power to the East. 2008 7
7. The Rise of the BRICs The acronym “BRICs” was coined by Jim O'Neill in a 2001 paper entitled "Building Better Global Economic BRICs". It has come into widespread use as a symbol of the shift in global economic power away from the developed G7 economies towards the developing world 8
Lecture Plan 1. Visualizing the BRICs 2. 2007/2050: rise of BRICS 3. Inventing the BRICs: 2001 4. Acronym to organization 9
FIRST BRICS SUMMIT 2009 10
FOUR BRICS 11
THE FIFTH BRIC: 2010 12
Brazil welcomes the BRICS 2014 13
BRICS 14
Putin welcomes Xi Jin Ping 2015 15
BRIC SUMMIT 2016 India welcomes China 16
THE WEST’S WORLD: 2007 17
A BRIC WORLD: 2050 18
BRICs League Tables Total GDP 2007/2050 ($bn) 2007: China – 3.5 (4) Brazil 2.0 (10) Russia – 1.9 (11) India – 1.8 (12) 2050: China – 70.0 (1) India 35.0 (3) Brazil 15 (4) Russia 10.0 (5) 19
GROWTH: BRICS (%) 80 70 60 50 Developed Emerging markets 40 BRICs 30 China 20 10 0 1991-2000 2001-2008 2010-2015 20
INVENTING THE BRICs The term “BRICs” was coined by Jim O’Neill of Goldman Sachs in a 2001 paper entitled "Building Better Global Economic BRICs". Global Economics Paper 66. 30th November 2001 http://www.goldmansachs.com/ourthinking/topics/brics/brics-reports- pdfs/build-better-brics.pdf 21
Who were the original BRICs? a)Brazil (South America) b)Russia (Europe) c)India (South Asia) d)China (Asia) 22
Jim O’Neill 3 features of the BRICs (2001) • WEIGHT Over the next 10 years, the weight of the BRICs - and especially China in world GDP - will grow, raising important issues about the global economic impact of fiscal and monetary policy in the BRICs. • GOVERNANCE: In line with these prospects, world policymaking forums should be re-organised and in particular, the G7 should be adjusted to incorporate BRIC representatives. • GROWTH: In 2001 and 2002, real GDP growth in large emerging market economies will exceed that of the G7. On a current GDP basis, BRIC share of world GDP is 8% and rising 23
ACRONYM to ORGANIZATION BRICs SUMMITS: 2009-2016 2009: 1 st Summit in Russia 2009 • 2010: 2 nd Summit in Brazil • • 2010: South Africa joins BRICs 2011: 3 rd BRICs summit in China • • 2011: Creation of BRICs ‘Forum’ 2012: 4 th BRICs summit in India • • 2013: 5th BRIC summit South Africa 2014: 6 th BRIC Summit Brazil • 2015: 7 th BRIC summit Russia • 2016: 8 th BRIC summit GOA India • 2017: 9 th BRIC Summit China • 2018: 10 th BRIC Summit South Africa • 24
BRICs Challenge to West ? 1. BRICS on the BRICS 2. Common BRIC positions 3. BRICS v IMF and World Bank. 4. Reducing ‘exorbitant privilege’ of US $. 5. BRICs less vulnerability 6. Economic relations between BRICS. 7. China/Russia: closer strategic partnership 8. Improving India-China relations 25
1.BRICS on BRICS a. A Russian View of the BRICS (2012) • Andrei Ilyashenko (Russian analyst) “The BRICS Summit’ in India “proved conclusively that the strongest nations in the developing world are eager to achieve unity”. • Dimitry Medvedev (Russian PM/President) The ultimate objective “gradually to transform BRICS into a full -format mechanism for interacting on the critical issues of the global economic and political agenda.” 26
b. A Chinese View of the BRICS (2014) • BRIC used to be a “grouping acronym” and .. “a loose political grouping”. The BRICS bloc of nations is now an economic and robust locomotive which represents about 40 percent of the world's population, nearly a fifth of global gross domestic product, an estimated 4.4 trillion U.S. dollars worth of combined foreign reserves, and 17 percent of world trade”. China Daily. 15/7/2014 • "We have become an important player in international relations," BRICS cooperation is an "ongoing historical process“ which will help to achieve sustainable economic development, and favourable external economic environment. Beijing "will always be a good friend... of our BRICS partners.“ President Xi Jinping. 15/7/2014 27
c. India view of the BRICS • Indian Prime Minister Modi: Brazil BRICS Summit (July 2014) comes "at a time of political turmoil, conflict and humanitarian crises in several parts of the world.“ • "I look at the BRICS Summit as an opportunity to discuss with my BRICS partners how we can contribute to international efforts to address regional crises, address security threats and restore a climate of peace and stability in the world" • Modi hailed Russia as "India's greatest friend" and looked forward to a major improvement in relations with China. 28
2. Common BRIC positions: (i) Non-interference • Members of the BRICs do not criticize each other’s policies or actions eg: Russia not criticized over annexation of Crimea at 6 th BRIC summit; human rights not raised. • BRICs have opposed any western- style ‘interventions’ and oppose ‘conditionality’ as expression of interference into the internal affairs of other states. 29
BRICs (ii) Changing the balance • “The BRICS may not be allies but they all see a common interest in preventing the US from calling the shots and isolating one of their own.All but one of the BRICS have been subjected to U.S. sanctions and others to strict IMF conditionality. Indeed, for some it is personal — Modi was barred from the United States up until his recent election. And, they see the U.S. sanctions on Russia as a test run for a strategy that may be used on others that incur Washington’s displeasure in the future. Thus, the BRICS want to diversify their relationships beyond western dominated institutions and have a safety net if they get pushed out”. The BRICS Safety Net Bruce Jones and Thomas Wright | July 17, 2014. 30
3. Global Economic Governance IMF and World Bank • IMF functions as a regulatory authority providing long-term loans. IMF is headed and dominated by European nations. • World Bank gives long-term development loans to fund infrastructure projects in member-countries. World Bank is headed by Americans. 31
IMF Quota system Votes allocated on financial contribution. G5 have 39 votes, BRICs have 11 32
BRICs on IMF Reform • "The IMF reform process must lead to the modernization of its governance structure so as to better reflect the increasing weight of emerging markets and developing countries in the world economy…….. We remain disappointed and seriously concerned with the current non- implementation of" the IMF reforms” discussed in 2010. BRIC Summit Statement. July 2014 33
Recommend
More recommend
