The word “decorative” is currently fashionable in Brazil after Michel Temer bemoaned, in a leaked letter to President Dilma Rousseff, that he was being treated as little more than a “decorative Vice President”. Jokes in social media proliferated, some suggesting putting photos of the Vice President on Christmas trees for decorative purposes. As scholars studying the BRICS grouping discuss the 8th BRICS Summit, to take place in India in 2016, some wonder whether South Africa and Brazil, both experiencing profound economic crises, fulfill a similar purpose in the BRICS grouping.
Brazil is in the midst of the worst economic crisis since the 1930s, and, to the chagrin of most, its political elite shows no signs of constructively discussing the reforms necessary to get the economy back on track. The political crisis has led to a generalized paralysis which will prolong Brazil’s agony, and even the most optimistic forecasts have pushed back early signs of recovery to 2017. The government’s woes are set to increase as investigations into systematic corruption at Petrobras, Brazil’s state-owned oil company, will further destabilize the economy. Unemployment, poverty and inflation levels can be expected to increase further.
Just like Brazil, South Africa is facing an ever deeper crisis due to a toxic mix of low commodity prices and an incompetent, corrupt and populist government that has failed to articulate how it seeks to overcome the economic crisis Africa’s second-largest economy finds itself in. To make matters worse, President Jacob Zuma dismissed his highly respected Finance Minister Nhlanhla Nene, thus undermining the country’s hard-won record for sound economic management. As a consequence, South Africa’s currency plunged. Even before that, Standard and Poor’s cut the outlook on its equivalent rating to negative, bringing the nation a step closer to junk status.
Brazil’s and South Africa’s woes are starkly contrasted by the economic performance of India and China, which continue to be the main drivers of global growth. Despite lower growth figures, the Chinese economy is expected grow above 6% in 2016 and 2017. India performs even better and will, for the first time in decades, grow faster than China.
This unequal dynamic is likely to turn the decision-making process within the BRICS grouping more Asia-centric. Russia’s economic struggles are similar to those of Brazil and South Africa, but Moscow’s case is particular as Vladimir Putin remains (at least seen from Beijing and Delhi) a key geopolitical asset to the grouping, and someone unafraid to adopt a confrontational rhetoric that policy makers in Delhi and Beijing are unwilling to emulate, but often silently agree with.
Still, Brazil and South Africa continue to matter greatly for the BRICS grouping’s identity. They provide the BRICS with a global legitimacy (and thus capacity to influence the global debate) that a purely Asian club could never achieve. It is true that their cash-strapped foreign ministries are currently limited in their capacity to initiate and lead debates about future intra-BRICS activities. Still, they stand to benefit, being closely involved in an institutional process that is likely to significantly alter global governance in the coming years.
When discussing where the BRICS grouping will go in 2016 (regarding the BRICS Development Bank, measures to facilitate intra-BRICS trade, the key issues that will be discussed at the next summit, etc.) the answers — for now — can largely be found in Moscow, Delhi and Beijing.
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PHOTO CREDIT : AP
