Daniel W. Drezner
2013 has not been a great year for the BRICS
Late last year, Ruchir Sharma wrote a short essay for Foreign Affairs in which he said, "no idea has done more to muddle thinking about the global economy than that of the BRICs." Sharma meant that too many pundits were buying growth extrapolations as gospel, when it turned out that the state capitalism model embraced by ...
Late last year, Ruchir Sharma wrote a short essay for Foreign Affairs in which he said, "no idea has done more to muddle thinking about the global economy than that of the BRICs." Sharma meant that too many pundits were buying growth extrapolations as gospel, when it turned out that the state capitalism model embraced by some of these countries might have a few flaws in it. And indeed, the announcement this week that China has decided to, "conduct a broad audit of debts incurred by government agencies" is a data point in Sharma’s favor.
There’s a related point about the BRICs that gets lost in the mist, however — they’re also behind the curve when it comes to their diplomacy. Now, part of this is because, Russia excepted, they are latecomers to a lot of these international institutions, so they still need to move down the learning curve. Part of it is that others believe that they’re rising faster than they actually are, which can lead to a mismatch in expectations. In Foreign Affairs a few months ago, Manjari Chatterjee Miller noted:
Other observers fret about the pace of India’s rise, asking whether New Delhi is living up to its potential, whether the country’s shoddy infrastructure will hold it back, and whether it is strong enough to counter an increasingly ambitious China. All of this frenzied discussion, however, overlooks a simple fact: within India itself, the foreign policy elite shies away from any talk of the country’s rising status. As a senior official who has worked on India’s relations with Western countries recently told me, “There is a hysterical sense, encouraged by the West, about India’s rise.” A top-level official in India’s foreign ministry echoed the sentiment: “When do we Indians talk about it? We don’t."
Sometimes the two phenomenon combine to some curious BRIC behavior in international institutions… which leads to today’s intriguing Financial Times story from Samantha Pearson and James Politi:
Brazil reversed its hardline stance on Greece’s bailout on Thursday, saying it had not authorised its representative to the International Monetary Fund to withhold support for the latest aid to Athens.
Guido Mantega, the country’s finance minister, said it was a “mistake” for Brazil’s representative, Paulo Nogueira Batista, to abstain on the €1.8bn tranche of aid. Mr Mantega said he fully supported the IMF’s efforts to supply financial aid to Greece.
“[Mr Nogueira Batista] did not consult the government, nor was he authorised by us to vote in this manner and the finance minister has ordered him to return to Brazil immediately to explain himself,” Brazil’s finance ministry said….
Mr Mantega’s statement was met with some disbelief among political consultants in Brazil, given that the finance minister has been among the most vocal of the IMF’s critics.
As well as leading efforts to create a rival development bank funded by the Brics – Brazil, Russia, China and South Africa – emerging economies in March, Mr Mantega has frequently complained about the damage that US stimulus measures have done to emerging economies.
Paulo Kramer, a political scientist with the University of Brasília, said Mr Mantega’s latest position may be a sign of his political weakness after almost three-years of subpar growth and amid calls for him to resign.
“He knows he is hanging by a thread,” Mr Kramer said. “Probably someone warned him to tone it down, to change his rhetoric about the first world always taking actions that damage the developing world.”
Do bear all of this in mind the next time someone says "The BRICS are coming!!!"