By Andrew Hammond
Foreign ministers from Brazil, Russia, India, China, and South Africa (BRICS) met June 1 for a summit which underlined that, while the bloc was formed originally for its economic potential, it has also seen political cooperation rise to the fore in recent years.
This growing political bent is exemplified by this year's Indian presidency of the club of emerging market powers. The four priorities for New Delhi in 2021 include enhancing intra-BRICS anti-terrorism cooperation and enabling greater people-to-people interaction.
India's other priorities are delivering the U.N. Sustainable Development Goals (SDGs), plus also reform of the multilateral system to deliver on what BRICS says is a common ambition of sovereign equality of all states, and respect for territorial integrity.
These examples underline the hunger of the BRICS to become even bigger political (not just economic) players raising fears in some quarters that the bloc could, ultimately, become a unified anti-Western alliance. This concerns many given that the five nations encompass around 25 percent of the world's land coverage, over 40 percent of the world's population and around 16 percent of world trade.
To be sure, the BRICS (like some in the West) certainly have shared concerns about key elements of the prevailing global order. However, it is unlikely, for the immediate future at least, that this means the BRICS will move decisively beyond an increasingly institutionalized forum for emerging market cooperation.
Part of the reason for this is the heterogeneity of the club with its diverse interests, as showcased by Beijing's periodic tensions with New Delhi, including over border issues, which can adversely impact relations between the two. This has been one driver of the so-called Quadrilateral Security Dialogue, also known as Quad, of powers compromising India, the United States, Japan and Australia to act as a regional anchor vis a vis China.
At the same time that BRICS are stepping up their political cooperation, there is growing skepticism of the relevance of the group as an economic club given the diverging long-term economic trajectories of the five nations.
Pre-pandemic, this has seen generally robust economic performance in China and India over the past two decades contrasting with disappointing results in Brazil, Russia and South Africa. However, even Indian growth has been reversed during the pandemic while China continues to power ahead, for now at least.
Yet, with BRICS already accounting for around a quarter of global gross domestic product (GDP), up by over 10 percentage points from around a decade ago, their overall growth is already having a major global impact, despite their diverging fortunes. World Bank research, for instance, has shown that for the first time in some two centuries, overall global income inequality ― one of, but not the only measure of economic inequality ― appears to be declining.
This is being driven by BRICS and other emerging markets. Especially the collective economic growth and very large populations of India and China, in particular, which have lifted a massive amount of people out of poverty, are driving this greater overall global income inequality.
At the same time, however, there is an opposing force: growing income inequality within many countries. It is this factor that has also assumed growing political salience recently, helping fuel populist, nationalist politicians including Brazil's Jair Bolsonaro.
These countervailing pressures, like tectonic plates, are pushing against each other. While the net global trend for the past 200 years has been toward greater overall income inequality, there is growing evidence in the last two decades that the "positive effect" of growing income equality between countries, spurred by BRICS and the development of the Global South, is superseding the "negative effect" from increasing inequality within nations.
Monumental as this could be, however, the picture is not yet clear cut. However, what is certain is that the overall lot of the Global South has improved dramatically.
Especially post-pandemic, it is unclear whether the BRICS and wider development of the Global South have enough momentum to keep driving forward a more equitable world order. The answer will depend, largely, on the same twin issues of whether emerging markets generally continue growing robustly, and also whether the trend toward rising income inequality within countries is sustained.
On the first issue, the trajectory of the global economy will very likely continue to shift toward the South. However, the remarkable wave of emerging market growth of the last generation may now decelerate, and the global transformation it has produced in recent years potentially will not repeat again.
On the latter, it is not set in stone that ever-growing income inequality within countries will continue, especially if there is political will to address it. However, the debate over what long-term reform agenda should be undertaken to tackle this problem is contested by the left and right across much of the world.
While the coherence of the BRICS as a combined club is therefore questioned, they have helped drive what could be the first period of sustained movement towards greater global income equality for two centuries. Yet, the fragile process could yet go into reverse, post-pandemic, especially if growth in China and India flattens significantly as the world recovers from the coronavirus crisis.
Andrew Hammond (andrewkorea@outlook.com) is an associate at LSE IDEAS at the London School of Economics.
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This growing political bent is exemplified by this year's Indian presidency of the club of emerging market powers. The four priorities for New Delhi in 2021 include enhancing intra-BRICS anti-terrorism cooperation and enabling greater people-to-people interaction.
India's other priorities are delivering the U.N. Sustainable Development Goals (SDGs), plus also reform of the multilateral system to deliver on what BRICS says is a common ambition of sovereign equality of all states, and respect for territorial integrity.
These examples underline the hunger of the BRICS to become even bigger political (not just economic) players raising fears in some quarters that the bloc could, ultimately, become a unified anti-Western alliance. This concerns many given that the five nations encompass around 25 percent of the world's land coverage, over 40 percent of the world's population and around 16 percent of world trade.
To be sure, the BRICS (like some in the West) certainly have shared concerns about key elements of the prevailing global order. However, it is unlikely, for the immediate future at least, that this means the BRICS will move decisively beyond an increasingly institutionalized forum for emerging market cooperation.
Part of the reason for this is the heterogeneity of the club with its diverse interests, as showcased by Beijing's periodic tensions with New Delhi, including over border issues, which can adversely impact relations between the two. This has been one driver of the so-called Quadrilateral Security Dialogue, also known as Quad, of powers compromising India, the United States, Japan and Australia to act as a regional anchor vis a vis China.
At the same time that BRICS are stepping up their political cooperation, there is growing skepticism of the relevance of the group as an economic club given the diverging long-term economic trajectories of the five nations.
Pre-pandemic, this has seen generally robust economic performance in China and India over the past two decades contrasting with disappointing results in Brazil, Russia and South Africa. However, even Indian growth has been reversed during the pandemic while China continues to power ahead, for now at least.
Yet, with BRICS already accounting for around a quarter of global gross domestic product (GDP), up by over 10 percentage points from around a decade ago, their overall growth is already having a major global impact, despite their diverging fortunes. World Bank research, for instance, has shown that for the first time in some two centuries, overall global income inequality ― one of, but not the only measure of economic inequality ― appears to be declining.
This is being driven by BRICS and other emerging markets. Especially the collective economic growth and very large populations of India and China, in particular, which have lifted a massive amount of people out of poverty, are driving this greater overall global income inequality.
At the same time, however, there is an opposing force: growing income inequality within many countries. It is this factor that has also assumed growing political salience recently, helping fuel populist, nationalist politicians including Brazil's Jair Bolsonaro.
These countervailing pressures, like tectonic plates, are pushing against each other. While the net global trend for the past 200 years has been toward greater overall income inequality, there is growing evidence in the last two decades that the "positive effect" of growing income equality between countries, spurred by BRICS and the development of the Global South, is superseding the "negative effect" from increasing inequality within nations.
Monumental as this could be, however, the picture is not yet clear cut. However, what is certain is that the overall lot of the Global South has improved dramatically.
Especially post-pandemic, it is unclear whether the BRICS and wider development of the Global South have enough momentum to keep driving forward a more equitable world order. The answer will depend, largely, on the same twin issues of whether emerging markets generally continue growing robustly, and also whether the trend toward rising income inequality within countries is sustained.
On the first issue, the trajectory of the global economy will very likely continue to shift toward the South. However, the remarkable wave of emerging market growth of the last generation may now decelerate, and the global transformation it has produced in recent years potentially will not repeat again.
On the latter, it is not set in stone that ever-growing income inequality within countries will continue, especially if there is political will to address it. However, the debate over what long-term reform agenda should be undertaken to tackle this problem is contested by the left and right across much of the world.
While the coherence of the BRICS as a combined club is therefore questioned, they have helped drive what could be the first period of sustained movement towards greater global income equality for two centuries. Yet, the fragile process could yet go into reverse, post-pandemic, especially if growth in China and India flattens significantly as the world recovers from the coronavirus crisis.
Andrew Hammond (andrewkorea@outlook.com) is an associate at LSE IDEAS at the London School of Economics.
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