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BRICS: A global child of our time
March 27, 2013, 5:06 am

A quick survey of the world’s current areas of co-operation is a revealing and sobering experience; when one considers the way the world works, it is still based on age-old allegiances of geography or empire.

The EU, Nafta, Asean, LatAm and the Middle East all operate on the basis of proximity, being good neighbours and recognising shared geographical (and often cultural) challenges, while the Commonwealth is the last remnants of the days of Empire, a disparate group of territories brought together previously by British expansionism and now all sharing a desire to move on from those dark colonial days.

Until recently, the Commonwealth was probably the most diverse geo-political group, but not its most economically active, especially given the exploitative nature of its past.

Little wonder then that while the modern world has, in the last two decades, become a marketplace that is becoming truly global, it is still riven by undercurrents of those cultural and economic legacies, and it into that world that the BRICS group has been born.

Global events have been kind of the new child; the West has been plunged into recession by a banking crisis created by its own arrogance and largesse, the Middle East continues to face upheaval as its people strive for the freedom that massive oil and gas wealth should have brought them decades ago, and Japan is on its knees, having just recovered from its own banking crisis it was hit by a real tsunami, driving it back into the red as it tried to make up for the loss of much of its energy-producing capability.

In the 20th century, the idea that five of the world’s largest countries, situated on three continents, could come together to form an effective trading partnership, was, for the most part just a dream, albeit one that very few took seriously; it took a new Millenium to make the dream come true.

With today’s instant global communications, such globally networked partnerships are commonplace in business, so why not in politics and economics as well?

"The challenge now is to ensure that momentum is not lost; it is one thing to start a movement, it is much harder to maintain and grow it once that entity becomes established and recognised"

“The challenge now is to ensure that momentum is not lost; it is one thing to start a movement, it is much harder to maintain and grow it once that entity becomes established and recognised”

It is a well-known aphorism that nature abhors a vacuum, and with the West’s economic strength being sucked into a black hole of debt and the Middle East wasting its money on ever taller follies, it was hardly surprising that the BRICS countries would become big news.

Although not entirely insulated from the fallout of the West’s economic crisis, the BRICS group have ridden the global storm and come out of it with their economies and their individual and collective dignity intact, as a result they are now in the driving seat, and the rest of the world is beating a path to their door in search of economic help.

Watching Cameron, Kerry, Hollande and other members of the G8 bending over backwards to ensure they stay on good terms with India, Russia and China has been like watching the medieval lords of old lining up to pay their homage to a new king; the intent and motive are obvious – they all know where the world’s money is now, and they must all stay on good terms if they are to attract the kind of business that will pull them all out of their self-induced collapse.

Like the politicians, businesses in the West are starting to wake up to this: Figures from the Office of National Statistics show that UK exports to the BRICS countries rose from $19.2 billion in 2007, to just over $41 billion in 2012 – more than doubling in five years, to represent 5.6 per cent of UK export activity today.

By comparison, exports to the US and Europe, the legacy markets which account for two-thirds of UK exports have been moribund, and there are calls for more to be done by David Cameron’s government to explore the potential benefits of doing business with the BRICS.

It is a story that will be repeated again and again as the world realises that the traditional economic powerhouses, especially the US, the Eurozone and Japan have lost their way and face the very real possibility of economic irrelevance unless they change course.

But with the US having driven itself over its own fiscal cliff and the Eurozone struggling to keep its worst offenders on course, especially Greece and Italy, it is hard to see real recovery happening there for many years to come.

It is also worth noting that similar trans-national groupings are being formed, such as the Trans-Pacific Partnership, have also begun to emerge, potentially countering the dominance of China in that region, but also demonstrating that imitation is the sincerest form of flattery.

Little wonder then that for the first time, the rest of the world will really be taking note of the BRICS Summit, and seeing for themselves the potential that the participants are bringing to the table.

Previous summits have been dismissed by critics as mere photo opportunities and talking shops, but with the BRICS countries representing almost half of the world’s population and one-fifth of today’s global economic output, the derision of those critics, has been dismissed as the churlish disdain for an unwelcome challenge to the established, possibly failing, old world order.

True, each of the BRICS group has their own challenges ahead of them; political, economic and social, but working together they have built up a momentum which has the potential to restore balance to the global economic order, and as we have already seen, this opportunity has not been lost on the some of the leaders of the G8.

Given their own growth, many will also be looking to them to take on the role of advocates for the emerging economies lower down the global economic league table, a move which would further distinguish them from the established global elite.

The challenge now is to ensure that momentum is not lost; it is one thing to start a movement, it is much harder to maintain and grow it once that entity becomes established and recognised. How they achieve this will be the defining line between maturity and misadventure.

Individually, the BRICS have not been willing to follow the crowd, they have been able to stand alone when they felt it was necessary and it is that quality of distinct thinking, along with huge domestic markets, which has helped to give them their current economic strength.

On its own, that would be a huge benefit, but working collectively, being a part of a group with some shared economic objectives, will amplify that, supporting their policies of expansion into the wider global marketplace.

If the momentum can be maintained, it is clear that BRICS has the potential to become much bigger than the sum of its parts, and as it moves towards maturity in Durban and beyond, the rest of the world would be wise to take heed and join the party.

The views expressed in this article are the author's own and do not necessarily reflect the publisher's editorial policy.