The South African Civil Society Information Service

BASICs, BRICs and PIGS: New Acronyms and the New World Order

By Leonard Gentle · 13 May 2010

Picture: SACSIS

Quietly, but inexorably, the world is changing. In the past three months a number of events have occurred, which, in and of themselves may go nowhere, but indicate the emergence of tectonic shifts that will change the world as we have known it for much of the 20th century. 

These changes may not necessarily be for everyone’s good, they may even portend more frightening developments, but if we don’t know about them we’ll only experience their effects like the victims of a sudden tsunami, arising out of nowhere and sweeping thousands into oblivion.  

Here in South Africa, in the midst of a media obsession with Julius Malema and the soccer World Cup, we are surprisingly silent and largely ignorant of these momentous shifts in global politics. This is compounded by a white middle class public discourse that sees South Africa as bit of a joke, an embarrassment -- an African nightmare. 

This is a shame because the South African state and big business are very much active players taking initiatives, intervening in others and competing for influence in the new world order, but not necessarily always with good motives. Yet, we as citizens are not active participants in, let alone keen observers of these developments.

Now diplomatic alliances have been the stuff of international geopolitics for many decades. The United Nations (UN) has existed for years as a vehicle for such alliances. But, the alignments of the BRICs (Brazil, Russia, India and China) - a term coined by Goldman Sachs to promote these countries to speculators - and the BASICs (Brazil, South Africa, India and China) are telling us something more important about the world. A new alignment of forces is emerging and it is one in which South Africa is something of a player of some importance. 

This was evident in December 2009 at the Copenhagen climate conference. Despite an international clamour for states to agree to cut greenhouse gas emissions, the United States of America (US) brokered, instead, a cynical “political” deal with an exclusive group of rising powers – the BASIC countries.

Recently, on 15 April 2010, South Africa met India and Brazil in what is known as an IBSA (India, Brazil, South Africa) meeting in Brasilia. Almost immediately thereafter, Jacob Zuma had to leave, as the heads of the BRIC countries met. South Africa used the IBSA meeting to lobby for an invitation to the BRIC group, overstepping the claims of Turkey, Mexico and South Korea, all of who have larger GDPs, but none of whom have the kind of regional domination South Africa has in Africa.

If there is one overarching context within which all these manoeuvres make sense then it is the story of the decline of the American empire. The US, the epicentre of the global economic crisis, is in deep trouble. Its US$14trillion federal debt is only being offset by China buying and holding its treasury bonds. This means that the US is reliant on China to lend it money, which it then uses to buy goods that China is exporting to it. 

The US desperately wants China to raise the value of its currency and increase its domestic consumption. This would make US exports more competitive. But it can’t get China to toe the line. The consequences of continued manufacturing decline and growing federal debt are driving the US to the wall, and it can’t get China to back down. 

America has also suffered imperial over-reach in Iraq and Afghanistan. It was forced into a humiliating military climb down when Russia sent in the troops to occupy part of the rebellious Ossetia region in the Caucuses (a territory supposedly enjoying US protection).

For much of the 20th century the US replaced Britain as the global imperial power and organiser of world capitalism. But after all the “shock and awe” of its power in the aftermath of World War II and the triumphalism of its 1989 victory in the Cold War, its imperial power is in decline. Some would trace the beginnings of this decline as far back as President Richard Nixon being forced to devalue the dollar in 1971 and so tear up the Bretton Woods Agreement, which had made the dollar the international currency and the embodiment of US power. Others say that America’s power depended on its role as the imperial unifier against the Soviet-bloc, and that with the collapse of the latter, there was no rationale for it to be accepted as the leader of one bloc in uni-polar world. Ironically, just at the point when the US became the epicentre of a uni-polar world, its power started to unravel.        

Europe, on the other hand, was largely rebuilt with the US-led Marshall Plan after WWII. While initiatives such as the EU and the adoption of the euro saw many commentators pose Europe as an alternative pole to the US. This was always a chimera because even European economic rivals to the US - like Germany - were happy to finance America’s wars, as the Germans did during the first Gulf War. 

Nevertheless, countries within the EU, like France and Germany, did use the EU’s status to muscle space within US hegemony and the euro was punted as a challenge to the dollar as the world currency.

But the EU itself is now in crisis.

Its poorer southern states, Portugal, Italy, Greece, Spain, the PIGS, are all in a huge debt crisis (PIGS becomes PIIGS if you include Ireland). Standard & Poor has just downgraded Greek bonds to “junk status,” which means it must pay even more to borrow. Within a common currency, this means that Greece and now Spain are dragging the Euro down with them. Speculators are having a field day betting that Greece and Spain will default. Greece has been forced to take an IMF loan and wage war on its own people by cutting social spending (which is understandably proving enormously unpopular). The alternative is to step out of the euro zone, which threatens the existence of the EU as a project. 

So the US is on the wane and the EU is very sick…creating the space for new centres of power to come into view. 

A number of contesting alignments are emerging with some countries rotating around China as the fastest-growing economy. China on its own, however, is ill equipped to play the role of the new imperial power. Its holding of so much US debt means that it cannot entirely abandon America. China is also the factory of the world for transnational corporations (TNCs) seeking to exploit its cheap labour. And, it sits on its own social contradictions of repressive state capitalism and rising civil unrest. So, it has to seek alliances.

Other regional powers – Brazil, in the case of Latin America, Russia, in the case of parts of Eastern Europe and the Caucuses, and India, in the case of the Asian sub-continent – seek out China, as they entertain their own ambitions or at least the ambitions of their TNCs.

And South Africa is in a similar position with respect to Africa. It is a mistake to see Thabo Mbeki’s African Renaissance and NEPAD as merely “feel good” projects with no substance (the arms purchases were part of the project of making South Africa an important power capable of backing its economic and political clout with military might). These projects were always an expression of South African corporations’ own highly successful forays into Africa -- from Anglo American, to MTN, to Standard Bank.

Despite the dumping of Mbeki and the rise of the Zuma faction within the ANC, South Africa continues to build itself as an important regional power and one seeking alliances within the new global order of declining US power. This is why South Africa is such an integral part of the BRICs and the BASICs, even though its GDP is eclipsed by more “deserving” candidates.

On the other hand, and very much on a different trajectory to that of the BRICs, the IBSAs and the BASICs, is the rise of popular movements in Latin America. These movements have given rise to initiatives such as the World Social Forum and its clarion call of “Another World is Possible.” In Cochabamba, Bolivia, popular struggles succeeded in reversing water privatisation -- a first, internationally. 

Democratic elections have led to a swathe of progressive governments in Venezuela, Bolivia, Ecuador, and even in Nicaragua and Uruguay. These governments have used state control of mineral rights or the ownership of petrol companies to siphon off wealth to social programmes. They have forged continental alliances with Brazil and Argentina, mindful of US machinations in the region and the military threat posed by Colombia. They have experimented with forms of popular democracy and have explicitly crafted programmes in opposition to neo-liberalism and the Washington Consensus. They have even experimented with different forms of international trade and finance, based, not on competition, but on cooperation. Two notable examples are the ALBA (Bolivarian Alliance of the America’s), which engenders social, political and economic integration rather than competition; and the Bank of the South, a development bank committed to lending without International Monetary Fund (IMF) conditionalities (such as those now being imposed on Greece).

In September 2009 Jacob Zuma attended the Africa-Latin America summit in Venezuela, coming directly from the G20 meeting in the US. It was at this regional summit that member countries launched the Bank of the South. Zuma declined the invitation for South Africa to join it. South Africa also shunned President Evo Morales’ invitation to the World People’s Conference on Climate Change and the Rights of Mother Earth in Bolivia and instead, the BASIC countries had their own climate change meeting at a secret location in Cape Town, attended by the environmental and foreign ministers of member states. 

Evident in the behaviour of the ANC/South African government is the fact that Malema’s recent “study trip” to Venezuela was about tourism and avoiding the uproar surrounding his disciplinary procedure rather than any strategic alliance with the country. 

So, does the decline of the US portend something good for pro-poor democracies in the world? Well, not in and of itself.

For one, a declining US, much like the kick of a dying dog, summoned up the Bush project and the “war on terror.” The invasions of Iraq and Afghanistan and the threats to Iran and Pakistan are proof of this. Even under the more diplomatic Obama, the attacks on Afghanistan have intensified as well as the threats to Iran. And the 2009 US-sanctified coup against the elected government of Honduras proves that a power in decline is still the strongest power in the world today.  

Is a country like China a better alternative, as some kind of new hegemony? Certainly not.

China’s history of forced labour, state suppression and violent interventions in Asia do not provide comfort for social justice. But if the decline of the US is not simply a transfer from one hegemony to another, then this conjuncture does open spaces for countries to pursue policies, which are about the well being of people and not global dictates.

For many years, as South Africans we were told that we had no choice but to dump the promises of liberation, redistribution and popular democracy in favour of neo-liberalism. We had to follow the dictates of global capital, liberalise, de-regulate capital flows and get the “economic fundamentals” right or face ruin in a uni-polar world of the Washington Consensus. 

Now in trying to understand the changing world it is important to ask: Where has South Africa located itself in these changing power relations and has it used the space to do something different domestically, and to make a better world possible?

Sadly, it appears that the ANC government continues to do on the international stage what it does domestically. Here it speaks the language of liberation and development whilst promoting neo-liberalism, capital markets and big business.

Internationally, it speaks the language of anti-imperialism and human rights whilst allying itself with the G20, the BRICs and the BASICs; feeding off declining US power and yet manoeuvring with the US against the struggle for climate justice; and with China to favour new regional elites; whilst shunning alliances with popular forces in Latin America; and using its regional African power to bolster unpopular regimes in Zimbabwe and Nigeria and reneging on promises it made in the past to democratic forces, such as, the Saharawi in North Africa. 

The world is changing. The global economic crisis continues and the planet screams out for new thinking on how we produce and distribute wealth. A range of countries, including South Africa, is testing the configurations of power that shaped the world over the last 60 years. Without a level of popular engagement, public debate and the building of relations of international solidarity on the ground, it is likely that these new configurations will give rise to new elites controlling the world, as rapacious and destructive as the old ones.

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