Bursting the BRIC Bubble

Ariel Cohen, writing on the Heritage Foundation website:

On April 15–16, the city of Brasilia will host a summit of the leaders from Brazil, Russia, India, and China (BRIC). Since Goldman Sachs economist Jim O’Neill employed the acronym BRIC in 2001 to help sell emerging markets investment products, the world has been bullish on the BRICs.

At the BRIC summit, China’s Hu Jintao, India’s Mammohan Singh, Russia’s Dmitry Medvedev, and Brazilian host Lula da Silva will seek to advance the impression that the BRICs are uniquely positioned to shape the global economic and political agenda. Such an impression is reinforced by the Obama Administration’s readiness to buy into the notion that America is declining in competitiveness, influence, and power as part of a transition to a “Post-American,” multi-polar world. Yet, there are five myths about BRIC that Americans should recognize before succumbing to Obama-inspired fatalism

Myth 1: BRIC Economies Are Eclipsing the U.S.

Fixated by China’s astronomic growth rates, Americans tend to overrate the BRICs’ economic weight. The International Monetary Fund estimates that, after trying to adjust for purchasing power, the BRICs collectively are about 15 percent bigger than the U.S. Using standard GDP, however, the U.S. ($14 trillion) is more than 60 percent larger than all four BRICs combined ($8.6 trillion). The BRICs combine for about 15 percent of the world ’s economy, while the U.S. alone accounts for almost 25 percent.
On a per capita basis, the results are even more disparate. Adjusting for purchasing power, one U.S. citizen (of which there are 307 million total) is almost eight times richer than the average BRIC citizen (of which there are 2.6 billion total). Using standard GDP, that number explodes to the average American being almost 15 times richer.

Myth 2: BRICs Have Much in Common

While all four BRIC members hope to maximize their influence in international economic and security affairs, there are far more fundamental differences than similarities within the BRICs.

In standard GDP terms, China’s economy is larger than the rest of the BRICs put together, thereby giving the PRC a far bigger global footprint. Yet on a per capita basis, China is poorer than Brazil and Russia, though considerably richer than India. While China is arguably the world’s biggest commodities importer, Brazil and Russia are among the biggest commodities exporters. Russia’s exports are primarily hydrocarbons and natural resources, whereas the other three BRIC members have robust, diversified industrial economies. India has started a demographic expansion the likes of which the world may never have seen, China is growing old before it is rich, and Russia’s population is shrinking outright.

With regard to foreign policy, Russia wants to revive its Soviet-era “sphere of exclusive interests” and be perceived as Washington’s equal. Moscow is obsessed—more than other BRIC members—with diluting American power around the world. India, on the other hand, seeks to demonstrate it is pursuing a foreign policy based on its tradition of “strategic autonomy.” During the Cold War years, India was a major leader of the Non-Aligned Movement, and leftist constituencies in India today oppose India’s warming relations with the U.S. Prime Minister Manmohan Singh and his Congress-led government, on the other hand, are deeply committed to stronger ties with the U.S. Participating in BRIC activities showcases India’s role as an emerging economic power and plays well at home.

Unlike China or Russia, Brazil has democratic roots, limited global reach, and the smallest military base of the BRICs. The left-leaning Lula has presided over a remarkable economic boom but leaves office this year. He hopes his legacy includes an upgrade in Brazil’s international role—such as a permanent seat on the U.N. Security Council—and increased influence throughout South America. As a BRIC member, Brazil believes it can project global, economic, and diplomatic influence.
Moreover, there are longstanding security concerns that divide the BRICs, including outstanding border issues between China and India, Indian reliance on Russian arms to balance China, and Russian concerns about the influx of Chinese immigrants to the under-populated Russian Far East.

Myth 3: A Multi-Polar World Will Enhance Global Security

A Russian spokesman recently announced that the BRICs are a “stabilizing factor” and a “reliable pillar in the formation of a poly-centric, fair, and democratic world order.” Regrettably, such rhetoric—calling for a change in the world order—has far too often proven to be the stalking horse of leaders harboring anti-West, anti-U.S., anti-democratic venom.
Today’s tyrants and anti-American firebrands—from Zimbabwe’s Robert Mugabe and Iran’s Mahmoud Admadinejad to Venezuela’s Hugo Chavez—have all reiterated a similar desire for a ‘multi-polar” world” and the diminution of U.S. influence. Premature proclamations of a new, BRIC-centric international order only lend credence to the fiery rhetoric of these rogue leaders.

Myth 4: BRIC Will Help Curb Iran’s Nuclear Ambitions

At the recently concluded Nuclear Security Summit, the Obama Administration worked hard to convey the impression that participants, especially Russia and China, are amenable to working with the U.S. and others on sanctions against Iran. Outside of the Obama charm orbit, Chinese officials including Hu Jintao reiterated their commitment to dialogue and negotiations, a codeword for inaction. Russia’s cooperation with Iran on nuclear and missile matters remains vital to its nuclear ambitions, and India’s Singh says sanctions will only hurt the Iranian poor. In Washington, Lula practically defended Iran’s right to nuclear arms, noting that Israel and Pakistan had them and therefore the world should understand Iran’s quest for security; Lula is scheduled to visit Tehran in May. With regard to Iran’s nuclear program, BRIC leaders are likely to remain a coalition of the unwilling and will not provide the U.S. with the genuine diplomatic support it seeks.

Myth 5: The Western Hemisphere Profits from BRIC Actions

While China’s purchases of commodities helped fuel Latin American growth, investments have often lagged, and the region’s capacity to escape its dependency on commodity exports has been limited, with domestic industry often undercut by Chinese competition. China has helped sustain the outdated, tyrannical Communism of the Castro brothers in Cuba and works closely with Chavez in Venezuela and Evo Morales in Bolivia as it seeks to consolidate populist authoritarianism.

The Venezuela–Russian relationship—now focused on energy, arms, and nuclear power—should cause concern in Washington as arms sales and regional insecurity increase. From the standpoint of U.S. interests and influence, the roles of China and Russia in the hemisphere are far from benign.

An Effective Response

In order to respond effectively to the BRIC challenge, the Obama Administration and Congress should:

  • Work with BRIC member governments on a bilateral level to secure their support for sanctions against Iran, reminding them that such support is a litmus test for relations with Washington and vital to international peace and security.
  • Recognize that BRIC countries are, however, massively investing in their public diplomacy capabilities. A comparable effort by the U.S. to enhance public diplomacy and strategic education about BRICs is urgently needed.
  • Get back to basics by promoting competition and completing free trade agreements. The BRICs confidently tout accumulating economic clout while the Obama Administration offers deficits, federal regulation, and a sluggish trade agenda. The Obama Administration owes the American people a coherent strategy for growth with security.

An Exercise in Stagecraft

While anxious to flex economic and diplomatic muscle, BRIC leaders will engage in international stagecraft in Brasilia as much as actual statecraft. In response, the U.S. should recognize its underlying strengths and awaken to the international challenges ahead. The American people cannot blindly cede global leadership on critical issues like trade, democracy, and Iranian nuclear weapons.

14 responses to “Bursting the BRIC Bubble

  1. Myth 2: BRICs Have Much in Common

    Why are you publishing this outdated article? Didn’t you brag earlier today that you think that BRIC no longer exists? “What used to be BRIC is now BICK. ”

    https://larussophobe.wordpress.com/2010/04/18/editorial-south-korea-vs-russia-duh-no-brainer/

    First Union had decided to boot Russia out of the so-called “BRIC” conglomeration and replace it with South Korea. What used to be BRIC is now BICK. Bye bye, Russia.

    Since in your mind, there is no BRIC, only BICK, and Russia is no longer there, why would you care that BICKs “don’t have much in common”?

    • The problem isn’t us, it’s your illiteracy. We didn’t report that BRIC no longer exists, we reported that a leading financial institution had negated it. That is only the first step, though a radically humiliating one for Russia.

      Your illiteracy is characteristic of the Russophile scum we routinely deal with. It’s because you’re so ignorant and hysterical that Russia is such a mess.

      We’re warning you that you are now making bad faith comments on our blog. If your goal is to lose your commenting privileges, you’re on the right road to doing so. You have been warned.

  2. “In order to respond effectively to the BRIC challenge…”

    So, there is a challenge, despite the five myths! Ariel Cohen and his brothers neocons are afraid of destroying the uni-polar world. No worries, mate, it will be destroyed!

  3. The BRIC nation do have a lot in common; here are some of their shared values, systemic corruption, extreme poverty, child labour, slums, massive human rights violations, so what sort of a new world order would this shower have to offer the West, let me tell you ; something a hell of a lot worse than we have now.

    Anyway as we know Russia is a junior partner they produce no consumer goods of any note, their role in the world is to supply energy, which should be a simple task, but they even balls this up, they have alienated most of their would – be customers in the EU (their most profitable market). And they are yet to build a gas pipe line to their BRIC buddies in china. Just to rub salt into the wound Turkmenistan have stolen a march and with Chinas help are providing the gas that Russia through incompetence can’t.

    The BRIC nation’s growth is based on the poverty of their own citizens; yes they can supply cheap goods; because of poverty wages, unsafe working environment, lack of health care, education, child labour. What will happen when these people wise up and start to demand higher wages and a better standard of living? If the BRIC governments meet these demands the price of the goods will rise, and the western companies that own most these businesses will pack up and look for a better deal with the new wave of emerging economies, Any power or influence BRIC thinks it has is an elusion, always remember “he who pays the piper call the tune” and in this case it’s the west.

    • “The BRIC nation do have a lot in common; here are some of their shared values, systemic corruption, extreme poverty, child labour, slums, massive human rights violations…”

      R John, don’t make me laughing. Do you think that what the western civilization (let’s call it WC for short) and, particularly, US make in its foreign policy is not MASSIVE snd BRUTAL human right violation?!!! Think about your f*king british colonies first. Don’t you think that your WC behavior creates (over centuries) all things you mention: systemic corruption, extreme poverty, child labour, slums, etc? So, this is really GOOD that there are countries conspiring themselves again the WC! I hope more will join and the toilet will be finally cleaned.

      • I don’t recall that Russia was ever a British colony. So, how do you then explain “systemic corruption, extreme poverty, child labour, slums, etc.” that can be found in modern Russia?

        Conversely, New Zealand, Australia, Canada and the United States were all British colonies at one time, and I think all the citizens of these countries can be only very grateful.

        Russia is a sovereign country and if she does not want to join Western Civilization, fine, it’s her choice. But then the should stop this self-aggrandizing and not pretend she is a part of the developed and civilized world, a claim she is trying very hard to make. Not too many people believe this anyway

  4. Interesting how “Myth 1” is based on flatly disregarding PPP-adjusted GDP and referring to what is actually nominal GDP by the somewhat misleading phrase “standard GDP,” as if PPP-adjusted GDP is some whacky experimental theorem and that “standard” GDP is the more reliable of the two. This is interesting because it’s insane. Nominal GDP is an inelegant, incomplete picture. There is basically universal consensus that PPP-adjusted GDP is the only way to compare the economic size and strength of established and developing economies. Blindly using nominal GDP is as accurate and complete as comparing box office receipts from 1930 to 2010 without adjusting for inflation.

    This is basic macroeconomics.

    • Do you expect Ariel Cohen to know basic macroeconomics, you ape?! If he were capable of learning science, he wouldn’t be a russophobe, would he?

  5. Today’s tyrants have all reiterated a similar desire for a ‘multi-polar” world

    That’s what tyranny is all about: wanting a multi-polar world.

    What’s next? Slaves wanting “freedom”?

    Regrettably, such rhetoric—calling for a change in the world order—has far too often proven to be the stalking horse of leaders harboring anti-West, anti-U.S., anti-democratic venom.

    Absolutely. That’s what the calling for economic equality is: anti-U.S., anti-democratic venom! Ideals of equality are anti-American!

  6. Ariel Cohen is man of great tolerance, as exemplified by his choosing to work for the Heritage Foundation, an organization founded by neo-Nazi anti-Semites:

    http://watch.pair.com/heritage.html

    THE HERITAGE FOUNDATION

    Power Elites: The Merger of Right and Left

    Paul Weyrich is considered by conservative Powers That Be as the most powerful man in American politics today. Weyrich allegedly founded the immensely influential conservative think tank, Heritage Foundation, in 1973 with funding from Joseph Coors of the Coors beer empire and Richard Mellon-Scaife, heir of the Carnegie-Mellon fortune.

    Paul Weyrich is a Melkite Greek Catholic whose personal background abounds with ties to Nazi collaborators and neo-fascist organizations. These well-documented facts do not seem to concern the U.S. Government, whose agencies have also been infiltrated by post World War II Nazi emigres.

    In the 1970s, Weyrich and Coors made appointments and set up political contacts on Capitol Hill for Franz Joseph Strauss, Bavarian head of state who helped emigre Nazi collaborators. Another fascist, Roger Pearson, writer and organizer for the Nazi Northern League of northern Europe, joined the editorial board of Policy Review, the monthly Heritage publication in 1977. The Coors Connection notes in a caption under an illustration of Pearson’s Eugenics And Race: “Dr. Roger Pearson’s racialist theories are circulated worldwide by neo-Nazi and white supremacist organizations.” (6)

    Pearson was brought to the U.S. in 1965 by Willis Carto, founder of the neo-fascist Institute for Historical Review (which denies the Holocaust) and the anti-Semitic Liberty Lobby, which publishes the weekly Spotlight newspaper. Pearson left Heritage after a Washington Post expose of the racist/fascist orientation of the World Anti-Communist League. Pearson chaired the American branch, the Council on American Affairs from 1975-80, as well as the WACL from 1978-79. The following brief mention of Roger Pearson on the British Eugenics Society web site is an indicator of his abiding contribution to pure racial breeding:

    “Hans K. Gunther, a Nazi anthropologist and eugenicist… was assisted by Roger Pearson of the Eugenics Society, an important figure on the racist journal, Mankind Quarterly… Mankind Quarterly is a racist journal still pumping out venom in 1994, still influenced by Roger Pearson. Josef Mengele’s co-researcher at Auschwitz, Von Verschuer, was on the editorial advisory board of this journal before his death in 1970.”

    Paul Weyrich also sponsored and currently works closely with Laszlo Pasztor, a convicted Austrian Nazi-collaborator whose Coalitions of the Americas is housed as a subsidiary in the Free Congress Foundation, the political arm of Heritage Foundation. Martin Lee’s book, The Beast Reawakens, refers to Pasztor as Weyrich’s right hand man:

    “In addition to homegrown agitators who dredged up anti-Semitic motifs that harkened back to the 1930s, some countries had to contend with groups that were led or supported by profascist exiles who repatriated from the West where they had carried on as vocal anti-Communists during the Cold War, often with CIA support. The Free Congress Foundation, founded by American far right strategist Paul Weyrich, became active in eastern European politics after the Cold War. Figuring prominently in this effort was Weyrich’s right-hand man, Laszlo Pasztor, a former leader of the pro-Nazi Arrow Cross organization in Hungary, which had collaborated with Hitler’s Reich. After serving two years in prison for his Arrow Cross activities, Pasztor found his way to the United States, where he was instrumental in establishing the ethnic-outreach arm of the Republican national Committee.” (7)

    A recent SCOOP newsletter from the Heritage related National Center for Public Policy Research mentions foreign and defense policy meetings chaired by Laszlo Pasztor. NCPPR is a conservative communications and research foundation which also sponsors Wednesday luncheons frequently chaired by Weyrich and Pasztor.

  7. The Breton wood agreement in the nineteen forties saw the economic world order change the US took over from Britain as the world’s economic driving force and the dollar became the reserve currency replacing sterling, then after the war the US through the marshal plan help to reconstruct Western Europe.

    At the same time Russia the dominant force of the Soviet Union secured its own sphere of influence via the Warsaw pact nations and introduced its commie-com plan.

    So in the intervening years 1945 to 1991 what did we see; Western Europe rebuilt with three of its nations Britain, France and Germany becoming 3 of the world’s top 5 economies (by the way Germany has only recently been out striped by china as the world’s largest net exporter).

    At what of the nations unfortunate enough too end up under Russia’s yoke; all these economies were turned into basket cases, and it is only now after joining the EU in 2004 that these countries have begun the process of repairing the damage caused by the Russians.

    Russia has only been part of OUR economic system for twenty years, in that time they have made little progress, only a boom in oil prices grew their economy, they have failed to diversify, corruption is systemic, human rights abuse is widespread, power is centralised just like Putin’s beloved Soviet Union. They face a demographic nightmare, are shunned by international investors, and produce goods nobody wants.

    A they have the AUDACITY to critises us and want to change our system what a joke!!!.

  8. Despite holding the position as one of the world’s biggest economies, China seems unwilling to shed its reputation for producing cheap replicas.
    And one of their more ambitious copycat efforts may put a strain on Russia-China relations.

    “A new Chinese plane is simply a Russian design stuffed with local electronics,” says Maksim Pyadushkin from the Centre for Analysis of Strategies and Technology ; taking about the Chinese J11B jet’s resemblance to the Russian Su-27. “It’s a knock-off.”

    Last year, Russian aircraft sales internationally topped $3 billion – second only to the US. But others too want a slice of the aviation pie.
    Vadim Kozyulin, program director for conventional arms from the Russian Centre for Policy Studies, says that fake Su-27s are widely offered in the world arms market. “Sooner or later, Russian arms traders will face competition from the Chinese.

    China was given the design plans for the Russian fighter jet in 1995, when it promised to buy 200 kits and assemble them domestically. After building 100 planes, the Chinese said the Russian plane did not meet specifications, only for a copycat version soon to appear – “Made in China” – without copyright.

    BRIC unity don’t make me laugh, when it comes to BRIC its every man for himself, maybe the above news will knock the “Cheshire cat” grin of Medvedevs smug face .

  9. WC people are such a bunch of hypocrites. All I have to say.

  10. Do you even know for how long Brazil has been a democracy?
    How far goes your knowledge about Brazil’s history?
    Do you even know for how long we have been exploited by Portugal (and Britain in certain terms) ?
    GO and google it please. (Y)

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