Building the foundations

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.

Advertisements

A fortress made of BRICS

The BRICS countries are building a formidable global power base but there are still cracks in the foundations

With the addition of South Africa to the group late last year, the emerging markets bloc has expanded its reach and capability considerably. It now has fingers in pies cooking in all corners of the globe and each member-state has a rough home ‘region’ where it is the dominate force. Brazil has majority sway over Latin American affairs, China rules the construction industry in Africa and Russia has diplomatic and industrial control throughout the former Soviet Union nations. But the way they influence and react with each other – let alone other countries – is both a cause for celebration and concern.

China is the most successful of the BRICS. It competes with Brazil in Latin America and rivals South Africa throughout Africa, be it through construction contracts in Angola or oil agreements in Sudan. Its conveyor lines drive European businesses back home and its markets are being opened up to foreign firms. It is powerful militarily, diplomatically and economically. China also is skilled at both comforting and irritating rival BRICS. It is happy to let South Africa be a diplomatic voice for Africa while it maintains its industrial strength there. But it has annoyed India by cosying up to Pakistan recently with economic agreements and plans for motorways and railways between the two countries. The transport links would pass through a part of Kashmir that India sees as its own and that Islamabad ceded to Beijing in 1963.

The other powers have also tried to carve out distinct paths across the globe. Brazil is promoting itself as a leader of a new international diplomacy by flexing its negotiation muscles and by engaging with Iran and the Middle East. Russia is still sending rockets to the International Space Station and is arguably the closest of the BRICS to Europe. India is starting to move its weight in South East Asia and has belatedly broken free from its comfortable domestic engine room to engage with African nations and make its nuclear-backed voice heard. South Africa is aiming to make the continent it foots its own, at first through diplomacy (President Jacob Zuma recently met Colonel Gaddafi for talks), and later by possibly challenging China industrially.

There are many sticking points. China and India have a disputed border and Beijing is cross that Delhi lets the Dalai Lama use India as his base-in-exile. Diplomatically, Brazil and South Africa are making an impact on the world stage, while quietly letting China continue to invest in their ‘home’ regions. But while China powers on, Russia is stalling and South Africa relatively inexperienced as the baby of the club.

It is up to Brazil and India to move the BRICS on from a second-class talking-shop to the most important international alliance. An Argentine writing his doctorate on Argentina and Brazil’s economies recently told me that “Brazil is big, very big – too big in fact” and the same could be said for India. They are outgrowing their respective Latin American and sub-continental origins and it is time that they give China a rest from pace-setting. They are certainly all building themselves up quickly and strongly and the West ignores them at its peril.

Getting rough in the South China Sea

Tensions are rising across the region and politicians must keep their heads

On Saturday 30 April seven Thai soldiers were killed in a double bombing by suspected rebels. A day later insurgents shot dead two Buddhists in a drive-by in the southern region of Yala. In total, more than 4,500 people have died in the last seven years in the south of Thailand, as suspected Malay Muslim militants fight for greater autonomy. It is a number that has gone unnoticed across much of the world, in a region quietly infamous for violent but sporadic insurgency and politico-religious strains. Also calling for more devolution are Vietnam’s Hmong ethnic minority, from a mostly Christian area up in the far north-west of the country and very close to the border with Laos. A recent protest was fiercely quashed by soldiers.

Another worrying situation that has been brewing for decades between Thailand and Cambodia had its most recent twist in the story at a summit of the Association of Southeast Asian Nations (ASEAN) on Sunday 8 May. The area up for debate was the Preah Vihear temple which stands in the Dangrek mountain range that straddles the Thai-Cambodia border. In 1954, Thai troops stormed the temple but withdrew eight years later. The ancient Hindu complex then fell into the hands of the Khmer Rouge in the 1970s. And this year forces from both sides have exchanged fire, with reports suggesting that two Thai soldiers died in the incidents.

An unhelpful sideshow to the event is the fact that Thaksin Shinawatra, the former Thai prime minister who is wanted back in Bangkok on corruption charges, has been appointed as an economic adviser to the Cambodian government. Because of their reluctance to tell member-states how to run domestic affairs, the ASEAN leaders failed to come to an agreement on what to do about the temple issue. This is not surprising, however, seeing as the matter has been simmering away since France left as colonial power at the turn of the last century.

There are some positives. The ASEAN hopes to form a single economic community by 2015 and already has lots of free trade agreements in place. Indonesia is growing in stature and is taking up the role of the region’s mover and shaker on the world stage. Late last year Burma held its first national elections for 20 years.

But the Philippines is wobbling: corruption is rife and political assassinations continue. Malaysia has to take the lead on the other Indo-China nations’ religious shoot-outs. A regional stand-off would heavily affect the commercial arrangements the ASEAN has fought hard to secure. India and China stand quietly in the background and the region must be careful not to split along superpower allegiance lines. But for now, the tourists still have faith in the Thai beaches and the Indonesian surf and they must not be dissuaded from visiting the temples in the mountains as well.

Time for a Latin lesson

Despite the disaster in Japan and the alternative power sources, dozens of countries have an unstoppable thirst for nuclear power. They should have a look at what is going on in Latin America and the Caribbean.

70% of the electricity that Latin America and the Caribbean region use comes from renewable energy sources, according to a report published last week by the Inter-american Development Bank (BID). The BID has ploughed millions of dollars into energy development projects across the regions in the last decade or so, and the results have been admirable.

Arnaldo Vieira de Carvalho, an energy specialist at the BID, said that, after the conferral of the loans:

“The only obligation that they [national governments] have with us is to work in two areas: on the generation of renewable energy and on climate change. These are long-term loans for more than 30 years, and this gives them more freedom for their work.”

After what happened in Japan, Germany, (which has 17 reactors on the go at the moment), announced an immediate review of its nuclear programme. The UK and Indian governments (19 and 20 reactors respectively) both asked for safety reviews. Even China (13 reactors) postponed the approval of any more for the time being. It has plans lined up for an astonishing 160 new reactors.

But the desire for nuclear energy is weak in Latin America and the Caribbean, where there are only six reactors in total (Argentina, Brazil and Mexico have two each). The three major players in the region are leading the way in their renewable ambitions and the BID is excited about what has been achieved so far from its support. According to Vieira de Carvalho, the renewable energy output of Brazil and Costa Rica is more than three times the global average.

What is also pleasing is that others seem keen to follow. Nicaragua, dotted with volcanoes, has just secured a $30.3 million loan to overhaul a geothermal energy plant in the west of the country.

According to the Financial Times, coal and gas make up 62.2% of the annual global energy consumption, whilst nuclear (13.5%) lags behind hydroelectric (15.9). And although more than 20 countries have more than 400 new reactors in the pipeline, none of them are in Latin America or the Caribbean, where nuclear power is used sparingly. There the plans are very much for a greener, cleaner future.

The fine line between defence and politics

On Monday 18 October the Chinese vice-president, Xi Jinping, was promoted to second-in-command of his country’s Central Military Commission, the government body which controls the 2.2 million-strong army. It is a posting which is undoubtedly seen as a stepping-stone to the presidency in 2013 in a nation where the military and political promotions go hand-in-hand.

The next day, 5000 miles away in London, the coalition government led by the Conservatives announced wide-ranging defence budget cuts. The run-up to the publication of the ‘Strategic Defence Review’ was dominated by criticism from the opposition Labour party, the public, soldiers, sailors and airmen alike. Even the Defence Secretary himself was found to have been railing against the cuts he was asked to find by George Osborne, the British Chancellor. The outcome of the report has been a source of contention and paradoxy: the Royal Navy’s flagship, HMS Ark Royal, is to be retired four years earlier than planned but two new aircraft carriers will be built. However, there will be no British planes for use on the ships for 9 years. In addition to the naval cuts, the number of tanks and artillery pieces will be slashed by 40% and up to 20,000 service jobs will be at risk.

The government has stressed that a streamlining of a mismanaged and economically wasteful budget was imperative but there is no doubt that the British military standing in the world will be severely reduced, and any future conflicts will probably be impossible without allies’ aid.

But this notion does not apply to the UK alone. The Falklands War in 1982 was a purely British-Argentine affair, although each combatant did receive oral backing, Argentina from some fellow South Americans and Spain, and the UK from the US and Chile. Times have advanced though and if tensions rise once more in the South Atlantic, then Argentina would be able to call on direct military support from friends on the continent, notably Hugo Chavez’ Venezuela. Britain would be unable to respond as it did in 1982 and would have to seek out allies of its own.

The current Argentine president, Cristina Fernandez de Kirchner, reshone the spotlight on Las Malvinas last weekend through Twitter when she labelled British soldiers carrying out exercises on East Falkland island ‘pirates’. Chavez also joined in online, recalling for the return of the archipelago to Argentina.

Looking further north, there is a different type of military deployment occurring in Colombia and Mexico. Both countries have large-scale deployment internally, as presidents Santos and Calderon look to conquer the drugs gangs. Mexico has sent the greatest number of soldiers to the frontline, and has also increased the remit of the navy and its marines, who are regularly involved in operations inland, not just in coastal areas. The gangsters are ingenious, and only the armed forces have the firepower to engage with the gangs, and the know-how to intercept seaborne missions and underwater deliveries via miniature submarines, although these conflicts have led to a massive death toll over the last four years, with more than 28,000 killed.

Somalia and the Democratic Republic of Congo (DRC) are the two African countries which are consistently in the current military news regarding Africa. Somalia hits the headlines for the ongoing unrest and firefights between the Al-Shabab militia and government forces, with the armed piracy situation adding to the problem. And the DRC is in the news for the gross abuses of villagers carried out by the army. The African Union (AU) provides peacekeeping elements to both these nations, among others, and it is in Africa where we see this type of military sanctioning and control the most in the current climate.

Looking back across the Indian Ocean, Burma has been under the control of a military regime for the past 22 years, and any attempts to promote democracy are dealt a fierce rebuke. Upcoming elections will be closed to outside observers, disallowing direct comment on the campaigns and results. Indeed, as Indian Nobel economics laureate Amartya Sen remarked on Thursday 21 October, only Burma’s closest allies, (which he cited as India, China and Thailand), have enough sway within the governing junta to be able to argue for democracy or promote greater transparency regarding human rights. Burma has an omnipotent role for the military in daily life in the country, but it is not the only Asian country to place such great value on the standing of the armed forces.

Last week, North Korea’s rulers named the present leader Kim Jong-il’s son Kim Jong-un as a general, and the foreign media (which was allowed within the borders, albeit under tight monitoring) was quick to point out the proximity of military high-command to political office. It certainly seems that Kim Jong-un, the dictator’s youngest son, will replace his father as the head of the country, but such a transition would have been extremely difficult without first giving him a prominent military role.

South Korea has US backing but has been keen to extend the diplomatic arm in recent months, refusing heavy-handed retaliative action after its neighbours sunk a warship in May. With Australia and New Zealand playing minor roles in Afghanistan, there remains the possibility that they could find themselves getting more and more involved with the nations to their north in the future.

Is the Nobel Peace Prize becoming a dangerously political award?

The BBC has reported that China is unhappy at the prospect of the Nobel Peace Prize being awarded to the imprisoned activist, Liu Xiaobo. Mr Liu has called on China to account for its actions and has been a fierce human rights activist and is now in jail, serving a sentence for ‘incitement to subvert the state’. So will the plan by the Norwegian Nobel Committee (NNC) to award Mr Liu the Peace Prize upset China? Does this mean that the Nobel Peace Prize is becoming increasingly political?

In December 2009, US President Barack Obama became the 117th recipient of the Nobel Peace Prize “for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples”. Global reaction to the announcement was mainly negative, arguing that as Mr Obama had not even been in power for a year and had only been nominated a fortnight after moving into the Oval Office, there were insufficient reasons to honour him. Mr Obama was widely criticised for accepting the award. At the time it seemed as though his political background influenced the decision and that Scandinavia had taken a dislike to George W. Bush’s foreign policy and assertive conservatism. In short, Obama’s election had signalled a change at the top of the US government, and this change was welcomed in Scandinavia. The NNC seemed to base its decision on Obama’s policies and plans for the future. Immense pressure has been placed on the president to live up to his billing as a laureate and demonstrate his worthiness of the award. So far his progress has been uneven. He missed his own deadline on closing Guantanamo Bay prison but succeeded in ending combat operations in Iraq. He convened Mahmoud Abbas and Binyamin Netanyahu but no deal was reached on the Israel/Palestine Peace Process.

Now the Norwegians are making noises regarding honouring the human rights efforts of Liu Xiaobo. China is unhappy. Beijing jailed Mr Liu for subversion a few weeks after Obama picked up the prize and the US and the EU have both condemned the judgment. Both have called on China to relax its militant approach to political dissidents. So what does this news mean for the Committee itself? It certainly came under criticism for last year’s choice, so it would like to steer clear of an overtly-political ceremony this year. Awarding Liu the prize would do the opposite and result in diplomatic disagreement and argument between China and the West. There is no doubt that Liu is a brave and committed supporter of human rights but the Committee is treading on unsteady ground in the run-up to the announcement of the recipient on 8 October. Its decisions carry huge significance and it must think carefully. If the NNC goes with Liu, China will accuse it of pandering to the liberal democratic policies of Europe and North America whilst Beijing critics will champion Liu as a defender of the sanctity of human rights and highlight China’s repressive regime. If the prize goes elsewhere, China will surely claim a moral victory for political persuasion; the West will complain and be left bewildered by the unforeseen choice of a committee that it sees as a vehicle for its international political ambitions.

There are other ways in which politics is linked to the award. In 1976 Mairead Corrigan and Betty Williams received the prize for the work in establishing the Community of Peace People to try to work towards a peaceful resolution of the Northern Ireland Troubles. Earlier this year Corrigan joined the flotilla which tried to breach the Israeli aid blockade and reach Gaza and which ended in a violent confrontation between activists and Israeli commandoes. She has become a staunch critic of the Israeli political position and spoken up for the Palestinians.

Of course the NNC could not foresee the way in which Corrigan’s activism would manifest itself 34 year after giving her the award but her actions do show that the Peace Prize has become inextricably linked with politics. For better or for worse, its nominations reflect the political attitude of Scandinavia. Such is the prestige and gravity of the award, the honouring of the laureates can represent a stumbling block on the diplomatic tables of the world powers. The global reaction to the decision next week will be intriguing.