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The Sunday Paper – The BRICS as an Alternative Anchor for Global Economic Governance: A Comment

Dan Ciuriak, of Ciuriak Consulting and a three-decade veteran of the Canadian civil service, takes apart the notion of BRICS (+ friends) emerging as a alternate to the Global North in the paper highlighted today.

First, he unpacks the convergence myth. He notes that in the 1980s ‘developed’ countries were about 25% of the world’s total, which is roughly where they are today.

As he points out, the last 30-years have been a fertile climate for development. It’s been a place of peak globalization, massive international investment flows and almost unfettered knowledge flow thanks to the internet.

The fact that so few (he acknowledges only China) countries have moved convincingly from the Global South northwards in the circumstances is remarkable. In fact, as he point out, the challenge for the Global South has not been to achieve convergence but to avoid falling further behind.

Over the period two significant technological developments occurred, both pioneered by the United States and both widely adopted by it’s Global North associates.

The first was the shift to a knowledge based economy that started in the 1980s, the second was the move since 2010 to the data driven economy. Only China among the Global Southerners has shown promise in utilizing these new technologies as growth engines.

He notes how hard development is and credits only Meiji Restoration Japan and China as having transformed their economies since the first Industrial Revolution [Surely Korea, Taiwan and Singapore deserve at least honorable mentions here? Ed.].

From these observations he goes on to BRICS which he reminds “..started out as an investment banker’s perception of a trend that had importance for investment bankers at the turn of the century.” It was never a natural club financially, politically or socially. It may at one time have looked like a synchronous block but that was only because the group emerged from synchronous crisis in the 1980s.

Now, with China breaking away and heading North, there’s even less reason for this group to en bloc. As for the notion of trying to form some form of common currency the practical hurdles are immense given the absence of cohesion, economically or politically, within the group.

The only way such a group could function would be if China was to take the lead. None of the potential members would probably be keen on this and China would, most likely, also be unwilling to take on such a role as it’d represent a backward move when its committed to heading North. Viz.

The way forward for countries seeking to develop is not bridges, railroads and highways, although those are base conditions for development, its emulating those economies at the leading edge of technological development and, where possible, partnering with them.

China gets this, the rest of its BRICS and Global South would-be-fellow- travelers? Apparently, not so much.

You’ll find the work in full via this link BRICS as an Alternative Anchor?

Happy Sunday.

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