Emerging powers: Rise of the South or a reconfiguration of elites?

Inclusive Economy08 Jan 2015Achin Vanaik

As emerging Southern powers such as Brazil, Russia, India, China and South Africa (the BRICS) rise up economically, and are joined by others like Turkey, Indonesia, Argentina, Mexico, South Korea, Egypt and Iran, how will existing geo-political and economic relations change?

The economic success of China and other south-east Asian nations means the centre of gravity of the world economy is shifting towards the Pacific. Besides East Asia, India has witnessed average annual growth rates of 5-6% since the 1980s, while the petro-economies of West Asia have performed well, as have South Africa and Brazil by average global standards. The global ‘middle class’ is growing substantially, and it is here that the South is becoming of increasing economic importance to global capitalism.

But economic growth in these newly emerging economies is accompanied by obscene disparities between rich and poor. South Africa and Brazil are among the most unequal societies in the world, while China, Russia and India are also experiencing lopsided growth.

Added to this, there are reasons to worry about the future performance of the emerging powers. As it is, per capita income levels of BRICS (and in others like Mexico, Indonesia, Turkey) are currently way behind those of the OECD countries (only South Korea has entered the OECD club). Given that their per capita figures hide gross inequalities, relatively lower levels in the future will continue to generate mass discontentment and impoverishment. This is particularly true where communications make it possible for even the world’s poor to know how deprived they are compared to their wealthy counterparts. In the South, both relative deprivation and absolute immizeration are in all probability going to persist widely enough to make opportunities for intra-South cooperation more difficult, and will be a source-bed for anger to erupt against ruling elites.

The ‘quintet’ and the role of the US

For all the claims that the rise of the South heralds a dramatic, global power shift, far more likely is the emergence of a quintet comprising the US, EU, Russia, China and India – in which the US, despite its relative (but not absolute) decline, will remain the principal bilateral coordinator and mediator. Brazil, Mexico, Turkey and others will not ‘merit’ entry into this club largely because they are much weaker military powers.

Rather than being a ‘web’ of multipolar powers, this new world order will rather be a ‘hub-and-spokes’ arrangement, with the US at the centre and joined by separate spokes to all other powers including the other members of the quintet. It is noticeable already that, despite the efforts of the major powers on the circumference to move towards each other and to form different groupings excluding the US, they all continue to give priority to their bilateral relationship with the US unless the latter forces by its own behaviour (e.g. with respect to Russia over the issue of Ukraine) any of them to break from this informal quintet. This is an arrangement from which the US benefits greatly and will seek to sustain for as long as possible.

In this new world order there will no collective hegemon nor a replacement of the role played by the US – claims about China as the new hegemon or India as a near equal power are to be dismissed. The BRICS, for example, continues to be too incoherent a bloc to provide an effective alternative or complement to the quintet.

Of the Southern powers, only China can hope to become a major economic rival to the US. But it is no match on the military or cultural front. To exercise hegemony or leadership one must be able to combine the ability to use force with the ability to elicit consent. The latter depends on being to some degree a pole of attraction, of having the kind of society and values that, deservedly or otherwise, other countries and peoples nonetheless would like to imitate. How many states and their ruling and middle classes in the world want to become more like Russia, China or India rather than like the US? Even the EU by its very disparate nature cannot be the single unified aspirational model.

The heterogeneity of the South

The struggle for a much more humane and ecologically sustainable world order must go beyond today’s capitalist globalization, whose principal political ballast remains US power exercised in conjunction with others. This being the case, any project for moving towards a saner world order must seek to greatly diminish American power.

Given this necessity, what are the weak spots in the global system that progressives can identify and work upon? First, there should be no illusions that emerging Southern powers, behaving as they currently do, can provide the desired sources of resistance. BRICS, IBSA, BASIC are groupings that aim to create more favoured positions for their member countries in the existing (and for them more important) institutions of global governance such as the World Bank/IMF/WTO and the UN Security Council.

Nevertheless, should the authority of the US be seriously weakened, this would create conditions in which Southern powers would see much greater virtue in cooperating more with each other and in exploring alternative economic arrangements of a more progressive kind.

The case of Latin America…

Currently, the region where resistance to neoliberal development is faring better is Latin America. It is here that the US-led effort to set up the FTAA (Free Trade Area of the Americas) was decisively defeated and where efforts to build forms of regional integration that spread benefits more equally between and within member nations have gone further than elsewhere.Yet here, as elsewhere, there is no escape from the necessity of national level struggles to replace current elite-serving regimes pursuing either disciplinary or compensatory neoliberalism with genuinely more progressive regimes rejecting the neoliberal path.

…and Asia

For Asia, there are two initiatives that could help change geo-political and geo-economic relations. First, even as we need to pursue the promotion of renewable energy sources over the next several decades, there will nonetheless continue to be reliance on oil and gas. Here the proposal of building an Asian Collective Energy Security Grid with oil and gas pipelines running across Asia from Iran via Central Asia across Russia and Siberia to the eastern coast of China and vertically downwards to the countries of South and Southeast Asia is an idea whose time has come. Not only would this benefit producers and consumers, it would also transform the geopolitics of the region and change relations with an oil and gas hungry Europe and Japan. It would deny the US the leverage it enjoys currently over India, southeast Asian countries, China, Japan and even Europe by its control over the Middle East (and its efforts to do the same in Central Asia) and over the key sea routes for tanker transportation.

Second, the time has come for an Asian Monetary Fund, run much more democratically by its member governments, to replace the role of the dollar and current neoliberal institutions like the IMF and World Bank. Such a body could become a regional clearing house with its own regional currency (in addition to existing national currencies), whose purpose would be to smooth out trade imbalances that would ensure that there are no permanent debtor and creditor nations. This would create a more powerful foundation for permanent cooperation among Asian countries that would also be greatly conducive to resolving conflicts and tensions of a more political-territorial kind.

A new collective vision

What is needed, finally, is a new collective vision of the kind of world we want to live in. This must be one which seeks to transcend today’s global ‘common sense’, namely neoliberal capitalism. Otherwise we will not overcome the four great evils of our times. These are 1) the persistence of mass poverty and hideous inequalities of income, wealth and power that in turn means the reinforcement of authoritarianism everywhere and therefore the hollowing out of democracies where these exist; 2) Ecological imbalances of all kinds threatening irreversible devastation; 3) The negative politics of cultural exclusivism pertaining to ethnicity, religion and nation, either separately or in combination; and 4) Growing militarism and nuclearism.

Such a vision is most likely to emerge from the ranks of those participating in, and identified with, the struggles of the oppressed in both the North and the South; for it is they who have the most to lose from the continuation of the existing order. Karl Marx once said that ‘workers of the world unite, you have nothing to lose but your chains’. Today it would seem that there is another kind of reality and another kind of clarion call or exhortation that is dominant – ‘upper and middle classes of the world unite, you have nothing to lose, certainly not your privileges!’

[This article is based on a longer paper published in Transnational Institute’s Reader, Shifting Power – Critical Perspectives on Emerging Economies ]