The 2017 annual BRICS summit was recently held between 3-5 September in Xiamen, China and attended by the heads of state/government of each of the five member states of Brazil, Russia, India, China and South Africa. These five countries together make up approximately 40% of the world’s population, 25% of the world’s land, and each country is a major economy and member of the G20. With factoids such as these, the 2017 BRICS summit had the markings of an event capable of impacting the future of the global economy.
Since the first inception of the BRICS in 2001 (or more accurately ‘BRIC’ at the time), however, the once incredible economic growth of these nations that heralded them as upcoming key economic players has long since faded, and the world is left with an annual reminder of a time that is now well behind us. Even for those countries still forging ahead with high growth (India and China), weak geopolitical relationships within BRICS highlight an all-too-clear inability for the member nations to capitalise on their economic strengths to instigate their desired changes to the global economic order.
Held under the theme of ‘BRICS: Stronger Partnership for a Brighter Future’, the ninth BRICS summit to be held since 2009 provided a somewhat ironic reminder of the rather dim economic futures and weak partnerships that the BRICS countries consist of in 2017.
Brazil
Between 2002 and 2008, Brazil’s economy expanded at an average of 4% a year thanks to commodity demand and domestic spending. This resulted in increased living standards and a drastic reduction in poverty. This was a time of considerable optimism, both domestically and for foreign investors. However, the 2008 Global Financial Crisis and 2009 European Sovereign Debt Crisis brought demand for Brazilian commodities down to a trickle at a time when Brazil’s domestic consumption had also been stalled by interest rate hikes. This combination of unfavourable internal and external factors led to Brazil’s economic growth slowing, eventually grinding to a halt in 2014, and contracting 3.9% in 2015. It’s only now that Brazil is showing signs of recovery, having broken its recession with two consecutive quarters of growth in 2017 despite the political scandals that continue to plague the nation.
Russia
Similarly to Brazil, but on an overall larger scale, Russia’s economy expanded significantly between 2000 and 2008. Averaging 7% growth per year during this time, rising commodity prices and increased domestic consumption led to poverty drastically falling. Unlike Brazil, Russia managed to keep the good times rolling through to 2014. During this time, Russia enjoyed continued high growth, as well as international influence through both its trade and permanent place on the UN Security Council. However, both Russia’s economic growth and geopolitical capital dropped sharply in 2014, following the annexation of Crimea in March and the subsequent sanctions placed on Russia by many of its largest trading partners. With a 2.5% growth rate in the second quarter of 2017, but a 0.5% growth rate in the first, Russia’s economic future remains murky and is little helped by its the alleged meddling in the United States’ 2016 election.
India and China
Unlike their BRICS counterparts, India and China remain strong economic powers and geopolitical influencers. Although China’s growth has long since fallen from its heady double digits days, it still holds to an annual growth rate of 6.8%, while its ‘One Belt, One Road’ initiative is likely to further its prosperity and influence with developing nations.
India likewise has gone from strength to strength, looking poised to emerge as an economic superpower with its young populace compared to the ageing populations of China and the Asian Tiger economies. But in contrast to their enviable growth, both India and China have had their influence shackled by geopolitical tensions, including ongoing territorial disputes between India and Pakistan, and China’s relative inaction against North Korea’s weapon testing. Days prior to the summit, India and China successfully agreed to an expeditious disengagement from the Doklam border dispute. This underscores the ongoing tensions between the strongest of the BRICS economies which will still require significant time to overcome.
South Africa
Always somewhat of an odd inclusion to the bloc being a comparatively small economy next to the giant BRICs, and not particularly notable in growth, South Africa’s economic outlook nonetheless echoes its Brazilian and Russian counterparts. A bleak economic outlook and ongoing political scandal arguably makes South Africa fit into BRICS more than its economy ever has.
16 years since inception, and nine since the first summit, perhaps it’s now time to abandon the economic predictions of the past and work towards functioning relations before jumping to more multilateral summits. Despite the catchy acronym, it’s hard to see a future where these BRICS will be building anything together.
Dylan Hubbard is the International Trade and Economy Fellow at Young Australians in International Affairs.