As the coming BRICS Summit will occur amidst a faltering world economy, the emerging world is pressing for change, and the advanced world will cling to the past.
Much has changed since the previous BRICS Summit. During the past year, the United States has lost its triple-A sovereign credit ranking. Meanwhile, the 1.5 percent growth in the Eurozone has turned into still another recession. In turn, Japan has had “two lost decades.”
The BRICS economies are not immune to the challenges of the advanced economies, through trade, financial, migratory and growth channels.
Wealthy but stagnating economies do not like change. They would like to retain the world as it is. Poorer but rapidly-growing economies embrace change. They would like to realize the world as it could be.
In the long run, both need each other. But advanced economies will seek to retain the status quo, while history will be fueled by the large emerging economies.
Development of, by and for Developing Countries
In New Delhi, the leaders of the BRICS nations of China, India, Brazil, Russia and South Africa have been discussing the world economy and closer coordination.Among other things, they will look closer at creating a joint development bank to coordinate their financial power. While the talks over the proposed multilateral bank remain in the early stages, such a global tool would enhance coordination among the BRICS.
Most importantly, there is a vital need for a development bank of the developing countries, by the developing countries, for the developing countries.
Even though economic growth is shifting toward the large emerging nations, proposed reforms in multilateral international organizations proceed slowly.
Advanced economies are reluctant to give up their entrenched positions in the International Monetary Fund (IMF), World Trade Organization (WTO), World Bank and other organizations, which were founded after World War II. As a result, the nations that guide the world economy no longer fuel global growth.
Since the postwar era, the top IMF job has gone to a European, just as the World Bank has been led by an American. In the past, the BRICS were assured that “things will change.”
The realities are different.
No Voice, No Justice
Last year, Mexico’s central bank chief, Agustin Carstens, campaigned for the top post at the IMF, but failed to get adequate support. As a result, the top IMF job went to former French Finance Minister Christine Lagarde.
Next June, Robert Zoellick, who has headed the World Bank since July 2007, will step down. In the past few weeks, the BRICS have discussed the selection process of his successor, arguing that the selection should be based on transparency, openness and merit.
The World Bank has received three nominations for the top post. The Obama administration is promoting Jim Young Kim, former director of HIV/AIDS programs at the World Health Organization (WHO). A number of developing nations are supporting Jose Antonio Ocampo, a highly-regarded Colombian economist, and Ngozi Okonjo-Iweala, Nigerian Finance Minister, another respected economist and diplomat.
Behind the façade, Washington has insisted that to keep funding flowing from Congress for the World Bank, the U.S. must retain the presidency. Last summer, European leaders insisted that only a European can understand the Eurozone crisis.
Both arguments ring hollow. The world is no longer Euro-centric. Nor is it any longer US-centric.
Today, the world economy is becoming increasingly multipolar. In such a world, the demands of the BRICS for adequate voice and representation in the international community are only a prudent way to ensure that the world is led by those nations that fuel its growth.
A Century of Waiting
What we are witnessing is the eclipse of the old order of international affairs and the rise of a new one. The transition will not happen overnight. But it is in the interest of both the advanced and emerging economies alike that it is ongoing, directional and proceeds with adequate momentum.
After World War I, the Peace Conference took place in Paris in 1919. At the center were the leaders of the Great Powers: President Woodrow Wilson of the United States, Prime Minister David Lloyd George of Great Britain, and George Clemenceau of France.
What about the BRICS?
After decades of colonial intrusion, the Chinese delegation called an end to imperialist institutions. The Western powers refused Chinese claims, thus paving way to the Japanese invasion of Manchuria in 1931 and to World War II a decade later.
Although a million Indians served in World War I, India had no representative in Paris. In the eyes of the West, it did not exist as a sovereign. Brazil’s role in Versailles was marginal. The Soviet Union was not invited to attend. South Africa participated in World War I, even as the segregationist apartheid policies were consolidated at home.
Altogether, the BRICS comprised about half of the human population on the planet. Yet, they had no role in the creation of the 20th century international order.
Wrong Side of History
While Wilson, George and Clemenceau represented only a tenth of humanity, they made the decisions for the remaining 90 percent.
When President Hu Jintao, Prime Minister Manmohan Singh, and Presidents Dilma Rousseff, Vladimir Putin and Jacob Zuma convene in New Delhi, they will represent almost half of the world’s population and close to a fifth of world GDP.
As the BRICS demand political power that is commensurate with their economic role, they are hardly being irresponsible. In contrast, the BRICS have waited patiently – for a century.
What is pressingly needed today is a real dialogue between the advanced and emerging worlds. Otherwise, the advanced nations will fall on the wrong side of history.
Slightly modified from “The Eclipse of the Old World Order,” China Daily, March 29, 2012