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Not just another BRIC in the wall

The old adage about a crisis producing opportunity could not have been truer for Brazil, Russia, India, and China, who held their first summit meeting as ‘BRIC’ amidst the worst economic and financial turmoil the world has seen in eight decades. To cynics and sceptics inured to a world order run by and for the advanced market economies of the west, the four countries have nothing in common other than statistics. They account for 40 per cent of the world’s population, landmass, and output (in purchasing power parity terms) and are among the fastest growing economies even today. But can they have common interests when they speak different languages, come from diverse civilisational traditions, and have markedly different economic profiles? Unlike the G8, whose members share similar if not identical political values and cultures, will BRIC be able to speak with one voice on a full range of economic and political issues? Going by the joint statement and declaration of food security produced by the four leaders at Yekaterinburg this week, the answer is yes. BRIC members do have a common understanding of the causes and consequences of the current world economic crisis— something they do not necessarily share with the U.S., Japan, and Europe — and a joint interest in the reshaping of the global financial architecture. Their ‘statistical’ unity gives them the potential to translate their interest into reality.

To be successful, BRIC needs to proceed on three separate fronts. The most important of these is global. The Yekaterinburg statement speaks about making the institutions of global economic governance more open, transparent, and representative. It also speaks of moving towards a more stable and diversified international monetary system, and pushing for a balanced conclusion to the Doha Development Round at the World Trade Organisation through, among other things, ending the multi-billion dollar western agricultural subsidies that distort global food markets. The second front is internal: BRIC will be stronger and more unified if there are greater internal linkages between its economies, especially on the business front. Finally, BRIC has a political agenda: using its collective strength as a lever for creating what Russian President Dmitri Medvedev called a “fairer world.” If the global economic crisis was triggered by unfair and iniquitous financial rules of the road, many of the world’s political disputes and crises have their roots in the unfairness of the global order. Far from seeing BRIC as a geopolitical irritant, the United States and its allies must recognise the tremendous positive externalities the four can generate for the world system.

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