Anyone paying the slightest attention to international news would have noticed the surge in reporting on the BRICS (Brazil, Russia, India, China, South Africa) group, with each month bringing news of yet another country that desires membership in this new club. At the same time, there is increasing mention of a re-energised Global South, a somewhat misleading catch-all geo-political category, which seems to denote every country outside the western world.
These articles highlight a growing sense of disquiet on the part of countries in the developing world – a dawning recognition that the system of rules that undergirds global governance is not serving them well.
Even without the two ongoing wars, in Ukraine and Gaza, the churn in the global political and economic environment has been evident for some time, underscoring concern about the business as usual, “western-dominated” model, be it regarding the structure of global economy or finance, security architecture, international disputes and conflict resolution, or the operations of multilateral institutions.
But, why is the recognition growing in importance today? What kind of realignment and what alternative structures are being imagined or incubated?
The primary factor responsible for this shift in global perception is the rapid transfer of the economic centre of gravity from the “West” to Asia, with India and China playing leading roles, and whose significance is actually understated by standard official data.
India is the fifth largest economy in current dollar terms, but by other metrics it is much larger. Benchmarking the total economic output of countries in dollars has a long tradition. There are alternate measures for the overall value generated by an economy (GDP) such as purchasing power parity (PPP ), which take into account that some goods and services cost much less in India and other developing countries than in western countries, and their contribution to GDP can be underestimated if measured at current exchange rates.
But PPP adjustment can be hard to understand and may not fully convey the economic size and heft of a host of countries in the BRICS and Global South, including China, India and Brazil.
A simpler metric – actual physical production, shorn of pricing – can sometimes demystify economic-statistical obfuscation. For example, we can take a look at the leading countries by electricity production, widely recognized as being the most important proxy for an economy’s size. Economists also recognise the importance of certain tangible goods which are used as inputs in the entire later production process, and therefore constitute critical elements of the structures of our everyday lives at present. These include steel, cement, plastics, ammonia – products that are commonly referred to as the four “pillars” of an economy. As data shows, much of the “real” stuff is made in the Global South, (with India and China coming out very well indeed), well outside of the erstwhile metropoles of industry – UK, Germany, France. None of the latter, incidentally, are any longer in the top five countries by PPP GDP, with the latest World Bank data listing China, US, India, Russia, and Japan as the five leading economies, in that order.
The story extends to other vital goods and products that are the indispensable core of a modern economy – auto production, grain output, and the construction of bridges, housing, highways, train lines, and overall infrastructure among others.
The awareness of their increased, even dominant share in many vital sectors of the global economy contributes to the pervasive grievance in many countries outside the western ambit, that their voices and concerns are not being “taken into account” commensurate with their newly earned place in the global hierarchy.
Beyond the leadership, even common citizens of these countries view reports of G7 as the world leaders with considerable bemusement given that the group includes countries such as Italy and Canada, which are not even in the top ten list of economic powers.
As of 2018, the BRICS formation, as a whole, has overtaken the G7 (see figure) in economic output. A lesser known story is the huge increase in intra-global south/intra-BRICS trade and economic activity – i.e. trade and economic interdependence among themselves, vis-a-vis the western partners – with even greater potential for growth.
The persistent perception, that in the so-called rules-based-order the “order” is one-sided and the “rules” themselves seem arbitrarily imposed, has led to an enhanced appreciation of the sovereignty of nation states. This rethinking is not restricted to the elites in the BRICS or by those in the rest of the world who are looking for a larger share of the pie. Rather, it also points to the coming of age of the growing middle classes of the developing world – an educated, engaged, and well informed force.
The structural and secular trends outlined thus far have resulted in a compelling urge to redo some of the rules, practices, institutions and laws that underpin the existing world order, especially those that relate to economic relationships, payment and currency mechanisms, and political and security arrangements. Part of the motivation stems from watching the entire western bloc act as one.
In the colonial era, colonised subjects had at least some room for manoeuver – they could take advantage of the fact that the colonising powers fought with each other in their campaigns of conquest. Thus, one could expect the English to battle the French, or the Spaniards to fight the Dutch. The Marathas and Tipu Sultan, among others, took shrewd advantage of this opportunity from time to time. The realisation of the power of the unity achieved by the western bloc and its impressive demonstration effect has now spurred at least some countries in the rest of the world to work together.
Paraphrasing and extending the poet Ameer Qazalbash’s evocative phrase – Usi ka shahar, wahi muddai, wahi munsif, hamen yakeen tha hamara kusur niklega (Its his city, he is the accuser, he is the judge; I knew I would be declared the guilty party) – captures the emerging collective view of the countries of the Global South:
Agar, unhi ka shaastra, unhi ka astra, unhi ki awaaz, unhi ka andaaz, unhi ke shadyantra, unhi ke mantra, unhi ke aadesh, unhi ke updesh, wahi muddai, wahi munsif…to phir haar kiski aur jit kiski hogi? (If its their rules and their tools, their voices and their choices, their machinations and their invocations, their admonitions and their conditions, if they are the judge and the accuser, who will end up the loser?)
What are the prospects, and what is the outlook, for this nascent attempt at realignment? The Global South is shot through with conflicting interests, dispersed geography, patchworks of alliances and little history of coordination. If wishes were horses, BRICS would gallop; but the festering discontent has not yet resulted in a coordinated, systematic approach. What exists, at present, is a plethora of trade, finance and security initiatives which are defined more by what various groupings of developing countries do not want rather than by the concrete building blocks of an alternative structure.
In the coming years, Global South’s leaders will face a number of choices: Do they play by the old rules and try gradual reform or do they throw the baby out with the bathwater and set up, for example, an alternative currencies and payments system? How should they coordinate and line up sequencing of policies without jeopardising seriously the delicate web of relations holding these countries together, while winning over those groups within every country that are interested in preserving the status quo?
The existing order is the result of centuries of initial conflict among the leading powers, and their later reconciliation among themselves. Could the participation of the Global South – with no history of overseas colonial expansion, and a long tradition of cross-civilisational engagement – manage to avoid conflict and present a path of rapprochement with the dominant powers of today? It would require sagacity on the part its leaders, who may want to heed the advice from a classic of pragmatic statecraft, the Arthashastra, on how to deal with interlocutors, whether allies, competitors or adversaries – praise their qualities, develop harmonious relationships, point out mutual benefit, show vast future prospects and stress identity of interests.
Ashok Bardhan is an independent economist.
