BRICS and the challenges in fighting inequalities

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Thirteen years after it was conceived by Jim ONeill, the BRICS has gone through several phases to consolidate itself as a group of countries able to act jointly in the international arena. More than being a new North to global investors, Brazil, Russia, India, China, and South Africa are protagonists in the spread of hopes throughout the globe to reduce poverty and social inequality, as well as the construction of a new world order, marked by new centers and protagonists. The existence of a group of countries like the BRICS demonstrates to the whole world that mobility is a real possibility in the international arena. What it does not make clear, however, is whether this mobility will result in profound systemic changes towards an equal and more democratic world. Thus, in order to understand if the BRICS can collaborate in the construction of an equal and more democratic world, it is necessary to understand the world that these five countries are creating for themselves. Produced jointly by BRICS Policy Center and Oxfam, this document contains four analyses of key issues for the understanding of BRICS and its world, and the possibilities of changes brought to the fore by the joint action of these five countries. The objective of this document is to strengthen the debate between civil society organizations in the BRICS countries on key issues to combat inequality, promote sustainable development, and thus find ways for the BRICS to become a vector to a less unequal and more democratic world.

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  • COORDINATOR Sergio Veloso ASSISTANT Andr Jobim FINANCIAL COORDINATION Aurlie Delater GRAPHIC DESIGNER Tiago Macedo tgmacedo.art @ gmail.com TRANSLATION AND REVISION Barbara Alves Renata Gomide Rua Dona Mariana, 63 Botafogo 22280-020 Rio de Janeiro - RJ Brazil www.bricspolicycenter.org SCS Quadra 08, bloco B-50, sala 401, edifcio Venncio 2000 70333-900 Braslia - DF Brazil www.oxfam.org ORGANIZATION The contents of this publication do not necessarily represent the views of Oxfam or of the Brics Policy Center.
  • SUMRIO 1 INTRODUCTION 2 THE FIRST CYCLE OF BRICS SUMMIT: A CRITICAL REVIEW 3 URBAN INEQUALITY 4 PUBLIC EXPENDITURE ON INOVATION 5 SOCIAL-ENVIRONMENTAL SUSTAINABILITY 6 7 33 19 47
  • Thirteen years after it was conceived by Jim ONeill, the BRICS has gone through several phases to consolidate itself as a group of countries able to act jointly in the international arena. More than being a new North to global investors, Brazil, Russia, India, China, and South Africa are protagonists in the spread of hopes throughout the globe to reduce poverty and social inequality, as well as the construction of a new world order, marked by new centers and protagonists. The existence of a group of countries like the BRICS demonstrates to the whole world that mobility is a real possibility in the international arena. What it does not make clear, however, is whether this mobility will result in profound systemic changes towards an equal and more democratic world. Thus, in order to understand if the BRICS can collaborate in the construction of an equal and more democratic world, it is necessary to understand the world that these five countries are creating for themselves. Produced jointly by BRICS Policy Center and Oxfam, this document contains four analyses of key issues for the understanding of BRICS and its world, and the possibilities of changes brought to the fore by the joint action of these five countries. The objective of this document is to strengthen the debate between civil society organizations in the BRICS countries on key issues to combat inequality, promote sustainable development, and thus find ways for the BRICS to become a vector to a less unequal and more democratic world. Srgio Veloso, BRICS Policy Center INTRODUCTION 06 | INTRODUCTION
  • THE FIRST CYCLE OF BRICS SUMMIT: A CRITICAL REVIEW AUTHORS: JUREK SZEIFERT, SRGIO VELOSO* INTRODUCTION A fascinating and dynamic process that started after the end of the Cold War has put Brazil, Russia, India, China, and South Africa -- the so called BRICS countries -- in the center of the global scene. Born as an acronym, the BRICS gave life to a metaphor that nourishes new economic and political arrangements. As such, they set the scene for new power relations and the emergence of new actors in the international arena. Throughout the last decades of the twentieth century, social and political transformations triggered by neoliberal reforms were automatically replicated in indebted countries. During this time, the BRICS were peripheral actors with little or no bargaining power. In the current context, however, the BRICS have emerged as pillars that will maintain the dynamics of production and the circulation of capital-sustaining global capitalism. In the aftermath of the relative decline of the United States and the European crises, the BRICS emerged as mediators. They worked particularly for the consolidation of the G20, for trade negotiations, and for the building of new, cooperative frameworks. This context of new perspectives and possibilities is due to the extraordinarily active role the BRICS have been playing in their regions and continents. They are emerging as new protagonists on the global scene and are creating new bridges for South-South and East-West cooperation and integration. Since 2009, the BRICS have been meeting annually in a series of events, gathering heads of state as well as ministers, businessmen, scholars, diplomats, and civil society actors. Throughout these years, the group was able to come up with a common agenda largely guided by a developmental objective. The announcement that the group would launch a BRICS Development Bank indicates the opening of a new stage in the relationship among these countries. This new stage coincides with the end of the first cycle of BRICS summits and marks a turning point in the development of the BRICS countries as a group and as international actors. This paper aims to analyze key aspects of the agenda developed during the first cycle of summits, and it will be organized as follows: 1) a brief summary of the first five summits; 2) the BRICS position as key actors and agenda setters within the G20; 3) the BRICS as actors in South-South cooperation. The paper ends with final considerations on the institutionalization of coopetition and the new stage of synergy among BRICS. THE FIRST CYCLE OF BRICS SUMMIT: A CRITICAL REVIEW | 07 * Jurek Szeifert and Srgio Veloso are researchers at the BRICS Policy Center.
  • 08 | THE FIRST CYCLE OF BRICS SUMMIT: A CRITICAL REVIEW A BRIEF SUMMARY OF THE FIRST CYCLE OF BRICS SUMMITS The first official gathering of the heads of state of the (at that time) BRIC countries was hosted by Russias then-president Medvedev in Yekaterinburg on 16 June, 2009. Against the background of the global economic crisis that started in 2008, the four countries focused on possible changes in the international financial system and the role that the BRICs could play therein. In many ways, the joint statement that was issued after the summit already depicted the role the BRIC countries aimed at global governance by stating that emerging and developing economies must have greater voice and representation in international financial institutions. It can be argued that, by officially taking a step towards consolidating themselves as a group and holding a head of state summit, the BRICS meant to consolidate their claim to a bigger say in matters of global governance. However, this claim did not extend to changing the system of international institutions, as much as it could give the impression of doing so. Instead, it shifted the balance of powers within it in favor of the new players. This mindset is further demonstrated by the explicit adherence of the BRICs in their joint statements to the rules of democracy and transparency, the condemnation of terrorism, and the reassurance of multilateralism. In addition, the declaration outlines the BRICs development agenda by stating their support for the Rio declaration, for renewable energies, and for the UNs Millennium Development Goals (MDGs). With respect to the G20, the BRICs expressed their intention to coordinate their position within the group. On the 15th of April, 2010, Brazil hosted the second summit in Braslia. Once again, they highlighted their support for a multipolar, equitable and democratic world order, based on international law, equality, mutual respect, cooperation, coordinated action and collective decision-making of all States. Regarding the financial crisis, the BRICs reaffirmed their position within the G20 and stressed its relevance as a way out of the crisis. Furthermore, the summit focused on economic issues, such as international trade, agriculture and energy, as well as the BRICs role in the IMF and other multilateral institutions. The BRICs commitment to the UNs MDGs was proven, and they affirmed their willingness to favor developing countries through development cooperation. On 14 April 2011, the third BRICS summit was held in Sanya, China, the first meeting that counted South Africa as a member state. The member countries -- besides renewing their commitment to international multilateralism -- once again focused on the reform of the international financial system. The group also once again expressed its commitment to further intensify economic cooperation between the members, without concretizing this cooperation on a group level, however. TABLE 1: LIST OF BRICS SUMMITS (2008-2013) Summit Date Location Released Documents 1st 16th of June, 2009 Yekaterinburg, Russia BRICS Leaders Joint Statement; BRICS Joint Statement on Global Food Safet 2nd 15th of April, 2010 Braslia, Brazil BRICS Leaders Joint Statement 2nd 15th of April, 2010 Braslia, Brazil BRICS Leaders Joint Statement 3rd 14th of April, 2011 Sanya, China BRICS Leaders Joint Declaration 4th 29th of May, 2012 New Delhi, India Delhi Declaration Delhi Action Plan 5th 27th of March, 2013 Durban, South Africa eTheKwini Declaration; BRICS Leaders Statement on the Establishment of the BRICS-Led Development Bank Source: Homepage of the 5th BRICS summit.1 1 http://www.brics5.co.za/about-brics. Rev. 01.12.2013
  • THE FIRST CYCLE OF BRICS SUMMIT: A CRITICAL REVIEW | 09 The fourth BRICS summit was held on 29 May 2012 in New Delhi, India, with the theme BRICS Partnership for Global Stability, Security and Prosperity. The New Delhi Declaration made references to the crisis in the Eurozone, the then-upcoming UN Conference on Sustainable Development (Rio+20), the G20 summit in Mexico and the 8th WTO Ministerial Conference in Geneva. It also highlighted the importance of the BRICS in light of the financial crisis, as well as the comparatively good performance of the member countries despite the crisis. Accordingly, the BRICS stated that the G20s role [...] as a premier forum for international economic cooperation at this juncture is to facilitate enhanced macroeconomic policy coordination, to enable global economic recovery and secure financial stability. Also during the fourth summit, the leaders of the member countries discussed the idea of putting up a South-South development fund (Singh 2012), which is expected to become the cornerstone for the proposed BRICS Development Bank. The last summit of the first cycle was hosted by the newcomer South Africa in Durban in March 2013. The overall theme of the summit was BRICS and Africa: Partnership for Development, Integration and Industrialization and the joint declaration gives a special focus on cooperation with other emerging and developing countries, particularly in Africa. It also envisions a summit with the BRICS heads of state and African presidents. With respect to the BRICS development bankpreviously presented as a milestone of the groups process of institutionalizationthe summit once more endorsed its foundation. However, the countries could not agree on the volume of its capital. The de facto foundation was postponed until the next summit in 2014. The BRICS also agreed on a $100 billion Contingency Reserve Arrangement (CRA)2 , as a financial safety net. Therefore, while some perceived the summit in Durban as a failure regarding the consolidation of the BRICS grouping (The Economist, 2013), others agree that the stage has been set for further steps during the first summit of the new cycle, in Brazil in 2014 (Hou, 2013). As can be seen through this first cycle of BRICS summits, the annual meetings have served as a platform for the five countries to demonstrate their intention to act jointly. They learned how to improve coordination as well as to consolidate and articulate their position as emerging powers in the international system. However, the process remained slow and hasat least on the state levelnot yet surpassed the level of declaring intentions. In the next section, two key areas of the BRICS summit will be analyzed: the BRICSs relation with the G20 as the most important forum for global governance that emerged almost parallel to the BRICS; and the BRICS relationship with other developing countries and the consolidation of Global South through the intensification of South-South cooperation. THE BRICSS AGENDA AND THE G20 The agenda of the BRICS summits shows that the formation of the G20 has been an important point of reference for the consolidation of the BRICS as a group as well as for the definition of its position in the international arena. The idea of founding a group that consists of the most important economies and includes not only the industrialized countries (which have already coordinated their economic policies in the G7/ G8 in the 1970s), but also the most important emerging economies, already arose in 1999. The G20 held its first summit in 2006 in Washington and, since then, has served as a high-level forum for the coordination of global economic policies. The creation of the G20 is interpreted as a response to the claim that global challenges could no longer be tackled only by the G7/ G8 (Smith, 2011). The international financial crisis in 2008 -- caused, in the eyes of many, by a Western-dominated financial system -- and the fact the G7/ G8 members apparently were not prepared to deal with this challenge on their own, underlined this necessity. The task of redesigning the global economic and financial system can, therefore, be seen as the central issue that connects all G20 summits since 2008. 2 www.postwesternworld.com/2013/05/12/the-politics-of-the-brics-contingency-reserve-arrangement-cra. Rev. 20.02.2014.
  • 10 | THE FIRST CYCLE OF BRICS SUMMIT: A CRITICAL REVIEW TABLE 2: LIST OF G20 SUMMITS (2008-2013) Summit Year Date Location 1st 2008 November 1415 Washington, D.C., USA 2nd 2009 April 2 London, United Kingdom 3rd 2009 September 2425 Pittsburgh, USA 4th 2010 June 2627 Toronto, Canada 5th 2010 November 1112 Seoul, South Korea 6th 2011 November 34 Cannes, France 7th 2012 June 1819 Los Cabos, Mexico 8th 2013 September 56 Strelna Saint Petersburg, Russia Source: G20 homepage.3 Regarding possible solutions to the financial crises, the propositions made at the G20 summits can be interpreted as oscillations between stronger state intervention in the global economic and financial system and measures that favor continued deregulation and liberalization of markets. These differences were seen during the summits in Washington (2008), where the overwhelming impression of the worlds economic instability brought forth voices that called for stronger state regulation. Meanwhile, at the summit in Pittsburgh (2009), the first trends of economic recovery already led to a return of free-market ideas (Badin, 2012). The BRICS have made constant efforts to find a common position and coordinate their interests in the G20. However, domestic policies and different economic agendas and approaches have sometimes made this difficult. For example, whereas Brazil and China have favored a more expansionary policy and increased spending in Washington, Russia, India, and South Africa did not join this position at that time (Badin 2012). In general, the BRICS have adopted a posit...

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