April 28, 2012
Goldman Sachs – via economist Jim O’Neill – invented the concept of a rising new bloc on the planet: BRICS (Brazil, Russia, India, China, South Africa). Some cynics couldn’t help calling it the “Bloody Ridiculous Investment Concept.”
Not really. Goldman now expects the BRICS countries to account for almost 40% of global gross domestic product (GDP) by 2050, and to include four of the world’s top five economies.
Soon, in fact, that acronym may have to expand to include Turkey, Indonesia, South Korea and, yes, nuclear Iran: BRIIICTSS? Despite its well-known problems as a nation under economic siege, Iran is also motoring along as part of the N-11, yet another distilled concept. (It stands for the next 11 emerging economies.)
The multitrillion-dollar global question remains: Is the emergence of BRICS a signal that we have truly entered a new multipolar world?
Yale’s canny historian Paul Kennedy (of “imperial overstretch” fame) is convinced that we either are about to cross or have already crossed a “historical watershed” taking us far beyond the post-Cold War unipolar world of “the sole superpower.” There are, argues Kennedy, four main reasons for that: the slow erosion of the US dollar (formerly 85% of global reserves, now less than 60%), the “paralysis of the European project,” Asia rising (the end of 500 years of Western hegemony), and the decrepitude of the United Nations.
The Group of Eight (G-8) is already increasingly irrelevant. The G-20, which includes the BRICS, might, however, prove to be the real thing. But there’s much to be done to cross that watershed rather than simply be swept over it willy-nilly: the reform of the UN Security Council, and above all, the reform of the Bretton Woods system, especially those two crucial institutions, the International Monetary Fund (IMF) and the World Bank.