An article by Eduardo J. Gómez (King’s College) recently published on Foreign Affairs (access here) argues that “The past two decades have been all about the BRICS […] But now, with their economies slowing down, those days seem to be over. What’s more, by some measures, the BRICS have squandered their years of plenty. Even as they poured money into building dynamic economies and becoming global leaders, they neglected to invest in their own populations. As a result, they are less far down the development road than many would have expected. Nothing demonstrates the problem more clearly than a group of economies that have avoided it entirely. Mexico, Colombia, and Singapore have invested more in economic and social welfare than in becoming global leaders. As a result, these smaller economies seem to be doing better in some areas than the BRICS.”
Is this true? Here is my take on the piece:
Problems with E. Goméz’ argument:
1) Global entrepreneurship has a cost but it also has benefits. What Gómez does not seem to realize is that a large share of those costs are short term and born by each “global entrepreneur” individually while a large share of those benefits are felt only in the long run and are shared among all developing countries (including Mexico, Colombia and Singapore). The creation of alternative international financial institutions can create benefits that will materialize only in the longer run (for each BRICS individually and for developing countries as a whole) even though BRICS governments have to spend economic and political resources right now to meet and make plans for such institutions. As BRICS countries become important players in Africa, countries in this region have more bargaining power when making international agreements in comparison to a previous situation in which they could only deal with Western powers. In this case too, BRICS global entrepreneurship implies individual costs for each of the BRICS that can result in benefits for other developing countries (and the BRICS) in the long run. Therefore a short-term cost-benefit analysis taking each BRICS country as an individual unit (the type that Gómez did) can be misleading.
2) It is also debatable that, to increase its international profile and become a more active actor in the global political economy, a developing country needs to sacrifice its domestic policies. One doesn’t necessarily come at the expense of the other and there is a conservative bias in saying that it does. Resources applied in the international projection of a country are only to a certain extent fungible with those applied in domestic policies. To the extent that they are fungible (and a high opportunity cost thus exists), some BRICS will retract their international positions as the global economic crisis persists. This seems to be the case of Brazil, as some Brazilian transnational corporations are selling assets abroad and as President Rousseff is increasingly criticized for a low profile foreign policy. Still, building a development-friendly structure of global governance can be consistent with development-friendly domestic policies, even if the costs of this venture fall more over some developing countries. Western powers failed to provide such a structure, so someone else will have to do it. Should we criticize BRICS for taking advantage of the window of opportunity offered by the favorable international political and economic environment of the early 2000s?
3) There is a “black box” in Goméz’ account. How can we be sure that the differences between the performances of Mexico, Colombia and Singapore, on one hand, and those of BRICS, on the other hand, are due to differences in the efforts made by each country to become a global leader? These countries have adopted different development models, they have different geopolitical positions and different resource endowments, all of which can compete with “efforts to become a global leader” as an explanatory variable for development outcomes.
4) The evidence presented by Gómez also needs scrutiny. He ends the article referring to Colombia, Mexico and Singapore as “welfare-focused nations” contrasting to BRICS. At least for Brazil this assertion seems problematic. The Brazilian state has been internationally praised by its social policies, which have reduced inequality and lifted millions from poverty over the past decade.
We academics should avoid acting like the press, which is talking about the demise of BRICS just as quickly and acritically as it talked about their rise years ago.