Domestic success for the BRICS countries backs up their global posturing
Following on from a recent update post about where Brazil, Russia, India, China and South Africa are on the world stage at the moment, (see ‘A fortress made of BRICS‘– 08/06/11), it is worth taking a moment to look at the foundations of their international acclaim.
This week, the Brazilian Department of Work and Business released encouraging figures showing that the economy added 252,067 net payroll jobs in May. Despite some financial woes at the start of her presidency, Dilma Rousseff is clearly focused to try to continue the boom at home that her predecessor, Luiz Inacio Lula da Silva, kick-started.
India has become a hotbed for foreign firms basing themselves in the country or outsourcing many of their operations there. This expansion of the boundaries of domestic business, be it through Indian or overseas companies, allows India to move out itself. A report by US congressman Jim McDermott last year showed how Indian firms created nearly 60,000 jobs in the States between 2004-09 in deals worth $26.5 billion.
There is no doubt that a shift in the global circles of dominance is underway. Commentators in the US believe that, despite the lack of credible Republican candidates, Barack Obama may still lose next year’s election because of one main issue: domestic economic problems. The eurozone is also worryingly wobbly. Greece has to match China’s growth just to get itself out of what is fast becoming a deepening hole from which the only exit seems to be through a door marked ‘Drachma this way’. In contrast, as the Chinese deputy bank governor said in March, his country has the ‘market depth, liquidity and safety’ to see the Chinese yuan replace the US dollar as the major world reserve currency.
It is a cycle which allows an non-stop wheel of development for the BRICS countries. Their success at home breeds success abroad and the rising powers feel confident to challenge established countries on the world stage. By ensuring domestic growth, they can back up their international vision with internal achievements.