Knowledge Meets Power: How The BRICS Were Born
It’s rare for an academic economist to create a new political grouping of nations. Rarer still for this to happen via a 16-page review paper. If there was ever a prize for an academic report to have directly influenced international policymaking, Jim O’Neill’s paper from 20011 has got to be among the strongest contenders.
As Andrew Harmer and colleagues write on page 34, O’Neill, a former head of research at Goldman Sachs, created the BRIC acronym. He did so after working out that the collective GDP of Brazil, Russia, India and China was set to rise from 8 per cent of the world economy to 14 per cent within a decade, according to one scenario. O’Neill argued that these countries’ rising share of global wealth production needed to be reflected at the highest forums of economic policymaking.
He called for the BRIC economies to be allowed into the Group of 7 industrialised nations, with the case for China being “overwhelming”. He also suggested that Europe’s representation on the G7 be reduced from four countries (France, Germany, Italy and the UK), down to just one, or two depending if the UK joined the single currency.
Academic papers that influence policy are almost always written in accessible if not entertaining language with a strong top-line. They also tend to have influential support in places that count. And yet in that regard, O’Neill’s dreamy vision of redistributing global power has made little headway. We shouldn’t be surprised. No country with a permanent seat at the top table is likely to give it up voluntarily.
But inside the BRIC countries it’s a different story where O’Neill is a mix of rock star and prophet. His thoughts from 2001 spurred BRIC leaders to organise themselves into a group (later including South Africa) to rival the G7. BRICS leaders have since met annually four times since 2009 and this year’s fifth summit takes place in Durban at the end of March.
As Harmer and colleagues write, it is too soon to say if the BRICS will start to act more as a power-bloc. They are still very tied into existing policymaking networks (whether bilateral or multilateral), and a recent attempt at creating a BRICS-funded development bank (like the World Bank) remains mired in political wrangling.
This is deeply ironic. It suggests that when it comes to their own money, BRICS leaders aren’t really that confident in the investment potential of emerging markets. They could do worse than keep an eye on what’s been happening at Goldman Sachs. In 2010 the bank put O’Neill in charge of asset management, responsible for $800 billion of its clients money. And at the end of January the bank announced its most profitable quarter in three years.
Ehsan Masood is the Editor of Research Fortnight and teaches International Science Policy on the Science Communication Master’s Course at Imperial College London.