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Facing Tough Challenges
World Economy

Facing Tough Challenges

The recent downgrade of Brazil’s credit rating to junk status was followed by a raft of articles heralding the crumbling of the BRICS (Brazil, Russia, India, China, and South Africa). How predictable: schadenfreude almost always follows bad news about the BRICS, whose members were once hailed as the world’s up-and-coming economic powerhouses and next major political force.
There is something deeper going on here. The world’s seeming obsession with the BRICS’ perceived rise and fall reflects a desire to identify the country or group of countries that would take over from the United States as global leader. But, in searching for the “next big thing,” the world ignores the fact that the US remains the only power capable of providing global leadership and ensuring some semblance of international order, Project Syndicate reported.
The story of the BRICS is a familiar one. It began as a technical grouping in 2001, when the British economist Jim O’Neill lumped them together (without South Africa) and gave them their catchy name for the sole reason that they were all large, rapidly growing emerging economies. But, recognizing that economic power could translate into political influence, the BRICS held their first informal meeting in 2006, and their first leaders’ summit in 2009.
The bloc was going places–or so it seemed. But seven years, seven summits, and one new member (South Africa joined in 2010) later, the significance of the BRICS remains hotly debated.
The disparities among the BRICS are well known. China’s economic output is nearly twice that of the rest of the BRICS combined, and roughly 30 times that of South Africa. Their governance models are vastly different, from India’s robust democracy to Russia’s illiberal model to China’s one-party system. Russia and China, both permanent members of the UN Security Council, have offered, at best, lukewarm support for the other BRICS’ aspirations to join them. And then there are its members’ bilateral disagreements, including a heated territorial dispute between India and China.

  Dual Game
Nonetheless, the BRICS have acted in concert on more than one occasion. Last March, amid near-universal condemnation of Russia’s annexation of Crimea, the country’s BRICS counterparts–even those that had long supported the inviolability of borders and non-intervention–abstained from a UN General Assembly resolution affirming Ukraine’s unity and territorial integrity.
Three months later, the BRICS released their “Leaders’ Summit Declaration” condemning the imposition of economic sanctions on Russia by the European Union and the US.
Most concretely, the long-anticipated New Development Bank, run jointly and equally by the five BRICS countries, opened its doors in Shanghai in July.
Clearly, the BRICS are a thing. They are just not the thing.
The BRICS arose at a time when much of the world, especially the advanced economies, was mired in crisis. The “fall of the West” narrative ran alongside that of the “rise of the rest.” But the story has not played out quite as anticipated.

  Serious Challenges
Economically, the BRICS are facing serious challenges. In addition to a well-documented growth slowdown, China has lately experienced considerable stock-market turmoil and currency devaluation. The Brazilian and Russian economies are contracting; South Africa’s growth has slowed; and India, though maintaining relatively strong growth, must undertake important reforms.
The BRICS have also failed to fulfill their promise of international leadership. At the beginning of the decade, Brazil showed a certain aspiration, along with Turkey, to press ahead with an alternative nuclear deal with Iran. But that proposal fell apart, and, amid pressure from corruption scandals and falling commodity prices, Brazil left the global stage.
South Africa and India also continue to punch below their apparent weight internationally (notwithstanding Indian Prime Minister Narendra Modi’s visibility).
Only China has displayed an inclination to lead, as exemplified by President Xi Jinping’s visit to Washington, DC last week, which produced major announcements on climate action, cyber security, and international development. China has also been pursuing initiatives like the Asian Infrastructure Investment Bank and the revitalization of the Shanghai Cooperation Organization. All in all, the BRICS no longer seems to be rising.

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