By Saliem Fakir · 27 Apr 2010
They go by different names: IBSA (India, Brazil and South Africa), BRIC (Brazil, Russia, India, and China) and BASIC (Brazil, South Africa, India and China). These formations all amount to more or less the same thing: the new “emerging economies” seeking to redefine relations between themselves and the rest of the world.
They are widely seen as new symbols of power in the global arena.
The shaping of the alliances between these powerful new emerging economies raises questions both about themselves and their relations to other developing countries, especially the G77 group.
This was brought to the fore by the recently held BRIC meeting in Brazil (which South Africa is desperately trying to be part of), followed very quickly by the IBSA meeting, attended by president Jacob Zuma where he launched a joint satellite initiative, and the somewhat unknown BASIC meeting on climate change held in a secret location in Cape Town.
Will the “emerging economies” go it alone and leave the rest of the poor world behind?
Their emergence in global geopolitics signals a major shift in the South and that at least for Brazil, China and India, their economies will collectively overtake the developed economies in terms of contribution to global GDP and income.
South Africa’s status within these various groupings is still an open question. It has presence because it is the largest economy in Africa and contributes about 20% of the total GDP output for the continent.
But, the groupings’ pursuit of global eminence and power is not without rivalry. Neither are they free of internal conflicts and contradictions, both within each of their countries and amid the countries.
Nations don’t live statically with each other or within their own body politic. Once there was a wide class distinction between the Western World and developing countries, today that class distinction is increasingly between the new rising powers and the rest of the developing world.
As their own internal rich and elites rise and begin to share similar aspirations as the middle class and rich of dominant Western economies, so too, will the disparities between rich and poor within their domestic body politic become a source of friction and resistance. The class division will be between nations in the south as well as within the citizenry of these powers.
The World Bank estimates that the number of people classified middle class in these countries will soar by 200% by 2030 or something like 1.2 billion people will fall within this income category.
The very pursuit of their external foreign interests depends on what deal they carve amongst themselves as nations and how they resolve their domestic internal tensions; notably the chasm between the externally focused cosmopolitan elite and the internally subjected poor who carry the yoke of demands for cheap labour.
We can be sure of one thing: no matter how the rivalry unfolds between this lose alliance of countries; the curtailment of existing Western hegemony is on the horizon. We are certainly in the throes of a transition to a new type of world order and nothing, as we know it, is for certain.
Besides, the old world order did not come to us from mere passivity of relations between countries and this preaching of ‘free trade’. If anything, strong-arm tactics brought the desired balance of power in favour of western hegemony.
People forget the gunboat diplomacy that went into the emergence of the old order. Think of Commodore Perry’s black ships as they coasted along Japan’s coastline threateningly and eventually compelling Japan to open trade to the west in 1853. Recall the two ‘Opium Wars’ Britain imposed on China because of its trade surplus, which led to Britain claiming Hong Kong. And finally, think of the explicit task of the British East India Company, which ruled and ransacked India’s wealth through a few men until its rogue behaviour become intolerable, leading to the Indian mutiny and Britain slowly losing grip over India.
Geopolitical shifts in the world are forcing us to rethink the conception of the South. There is a new South in the making -- a very different kind of South that will force us to discard old concepts that don’t speak to the new facts on the ground.
The question remains whether the rise of these countries will be a benign phenomenon. Is it to be trusted and will it amount to a gain for the swathe of the world’s underclass, under-privileged and destitute?
Will the transition be stable and will there be enough of an income shift for those at the bottom of the ladder to benefit and share in the prosperity?
In the meantime, developed economies are facing a quandary and it has to do with demographics. Their decline is inevitable. The developed economies’ populations are aging. Over the next decade, several countries will have significant retirees and smaller numbers of economically active people.
As populations age welfare costs go up, pensions get depleted and medical costs increase. All the major developed economies are most likely to have growth rates of less than 2% per annum and 80% of the world’s GDP growth and contribution will come from developing economies.
At the same time, as the income shift is happening, developing countries are urbanizing at an unprecedented rate. The US for instance only reached urbanization levels of 65% when its per capita income was around US$13, 000.
However, some developing countries, with massive populations, are reaching similar rates of urbanization with per capita income only between US$1,800-US$4,000. This may be insufficient to meet all the needs of the newly urbanized poor and/or to deal with the related discontent.
China, which is about 40% urbanized, is expected to be 73% urbanized by 2050 and India which is 30% urbanized is expected to be 55% urbanized by 2050. The pace of urbanization is happening with lower levels of income per capita. This could be a source of major internal political tension.
Urbanization itself will force states to seek paths that will lead to rapid national economic growth, which will generate new types of tensions and contradictions. The demand for internal distribution of income share will force its way into the global geopolitical sphere as the imperatives for national economic growth and stability may well intensify economic rivalry at the global level.
As this shift from West to East is beginning to take shape, projections of economic power are an interesting ingredient in the dynamics of power relations and will define the nature of friendships that are being fostered between states.
Relations are expected to be time-bound and expedient. In some instances, these countries will co-operate for mutual strategic advantage and in other cases they will be rivals seeking to out manoeuvre each other in the game of global power.
After China annexed Tibet in 1950, India and China went on to fight a petty border war in 1962 for a strip of land in Aksai Chin considered crucial for China’s control over Tibet. The point of this is that even then when these countries are friends, they are not without rivalry and conflict.
While India and China may be in sync with each other on many global issues, they are also mutually suspicious. India’s nervousness stems from its own relations with the US, which is being countered by China’s ties with Pakistan, Nepal and Burma (where India and China both have interests in Burmese oil, gas and minerals).
National economic interests will not go without prudence. They become paramount in the context of internal challenges to manage the apportioning of wealth where disparities are of such a nature that they produce instability and conflict.
The whole sentiment on which the idea of the South, as a geographic and ideological construct is based, has to change given the nature of this income shift and the nationalistic projections of this simultaneous dalliance of friendships and rivalries within the groupings mentioned above.
A new class division is on the horizon, as the West’s presence wanes. The class division will be between rich and poor nations in the South and rich and poor citizens within the South. It is a fissure that already existed, but will become more pronounced and its true implications we do not know yet.