Bonds, Currencies, Emerging Markets, Frontier Markets, Stocks

BRICS vs the West

BRICS

By Enrique Lescure

Introduction

Francis Fukuyama coined the term “end of history” in 1992, following the collapse of the Soviet Union. The bipolar world, divided between the Capitalistic and Socialistic blocs, was no more, and was replaced with a world characterised by unipolar hegemony by the United States, and the strengthening of supranational institutions aiming to create a world with harmonised systems pertaining the operations of markets – in order to consolidate and expand a system of globalised financial capitalism and the norms and values it was based upon. The latest incarnation of this strivance towards capital convergence are the free trade agreements of the TPP and the TTIP.

However, this narrative of greater global harmony and a harmonisation towards a world order characterised by the universal adoption of modern western values are challenged by the (re)emergence of major non-western powers, that arrange themselves with a web of cooperation agreements that circumvent the Western sphere.

Ultimately, the issue is about whether we should have a world governed by trans-national institutions that are built to support the current paradigm of a world under the increasing control of multi-national corporations, or if we should move (back) towards a world characterised by great powers with exclusive rights to “spheres of interest”. Neither of these two options seem to be very attractive, but understanding the innate conflict between the BRICS and the West would help us to understand what kind of world we are living in today and towards where we are moving.

Some hard, basic facts

Lion

Human beings throughout the world are largely organised in de-facto hierarchical structures which ultimately are built on brute force. There have been human societies which from the beginning have been egalitarian and peaceful, but those societies have generally been absorbed by aforementioned hierarchical societies. A hierarchical society is generally built on the foundations of an elite which exerts control – either directly or indirectly – over a state, which in its turn exerts direct control over armed civilian and military forces.

The purpose of most states is to uphold law and order and to maintain stability. A seldom openly expressed part of the “keep stability”-aspect of the state’s goals is to protect the interests of the elite and maintaining the status quo. Meanwhile, the general population would accept this as long as their own security and their ability to pursue their own livelihood is not infringed on.

This “power ideology” of preserving the elite and the state underlies basically all other ideologies – no matter what social and socio-economic system we are talking about. It is not pretty – in fact it is often very disgusting and horrendous. However, experiences have shown that abolishing the state through force often leads either to the breakdown of civilised society or the turn towards an even more violent state (consolidated states are often less repressive than newly established ones, mainly because newly established states have not yet attained legitimacy in the eyes of the population).

With this I would not claim that all states are equally tyrannical. For example, the Nordic states are less repressive in many regards than for example the United States, when it comes to the usage of force against their own population if needs would arise. The United States in its turn, is a far more accountable social arrangement than for example the Russian Federation, where officials and oligarchs can prey on ordinary citizens with impunity – and finally Russia is probably a far more safe society than North Korea, Haiti and the Islamic State.

However, the hierarchical power relationship exists in different degrees in all these societies, though it varies through times.

Ultimately, what has characterised the history of the world’s civilizations has been a struggle between the elites of different societies in establishing sovereign spheres of interest, or in case of small peripheral states like Sweden, Cuba and Qatar, establishing their own national sovereignty and ensuring the safety of their elite and citizens.

The United States found itself as the world’s hegemon during the 90’s, and moved towards strengthening international institutions and easening trade regulations during the Clinton Presidency, with the implicit goal of securing status quo by creating a supranational elite not tied to any particular nation-state, and to secure economic growth and thereby security by keeping the oceans open.

While the states of the world would renounce their economic sovereignty to multi-national corporations and supranational institutions, the political bordersand recognised states of the world would be protected by the international system headed by American leadership. There are two reasons for this, firstly to reduce the threats towards trade and stability, and secondly to attain tools to prevent aspiring regional great powers from carving out interest spheres.

Military Spending

This order rests on three legs, namely international treaties (a legalistic framework), continued economic growth (an insurance against political instability) and American military power (since the Gulf War a viable threat to aspiring regional powers).

What the BRICS are and how to understand them

Photo courtesy of The Russian International Affairs Council (RIAC)

Photo courtesy of The Russian International Affairs Council (RIAC)

The BRICS stands for Brazil, Russia, India, China and South Africa.

The BRICS can be understood as an economic acronym denoting five emerging large economies in the non-western world. It can also be understood as a collaboration between five regional great powers regarding economic issues. What BRICS ultimately is, however, can be understood in terms of the Eurasian landmass, where three of the four BRICS powers are not only located, but also are directly bordering one another. Two of the five BRICS powers contain almost ten times the population of the other three powers together.

However, if we want to understand the BRICS, we need to understand it as a part of the reapproachment between China and Russia, two regional powers that complete one another in many regards (Russia has ICBM’s and vast natural resources, China has capital and an oversupply of labour) and who also both desire to increase their influence in two regions – at the expense of the American-led world order.

This does not say that there are regions where both powers compete and where they potentially could clash in the future, but neither power is interested in a confrontation, mostly because both powers feel that their primary geopolitical problem is related to security and a sense of curtailment by the West – Russia in eastern Europe and China in the sea region outside of their Pacific Coast.

While India is economically important, the main reason for the inclusion of India in the cooperation is that India and China have been adversaries since China’s annexation of Tibet in 1950 and the Sino-Indian border conflicts of the 1960’s. While India has always had good relations with the Soviet Union and its successor state the Russian Federation, China has been an ally of India’s adversary Pakistan and has been perceived as a great threat to the north.

India – sheltered as it is by the Himalayas, the Hindukush and the Arakans – is more concerned with keeping economic growth and preventing ethnic and religious separatism than with expanding their influence beyond their borders (though they have engaged themselves in neighbouring countries such as Bangladesh, Nepal and Sri Lanka, the United States has generally not opposed the Indian sphere of interest very much).

Lastly, the inclusion of South Africa and Brazil is mutually beneficial both for the great Asian powers and for the non-Asian powers involved, since it will give the Asian powers access to resources from Latin America and Africa, and the ability to project their power there, while South Africa and especially Brazil are recognised as great powers and can gain increased investments from Asia, so to diversify the capital invested within their economies.

In terms of agenda, however, India, Brazil and South Africa are not aiming primarily to expand their spheres of interest, but rather to maintain themselves and secure their economic growth, whereas Russia and China are the two main powers with an agency inside the context of the BRICS.

What is the ideology of the BRICS?

Ultimately, the ideology of the BRICS is one which asserts the perceived right for non-western elites to replicate western neo-imperialism within their own spheres, to exert control of their context of economic growth, while still adhering to the values and norms of the growth-oriented model of globalization. Therefore, the BRICS cannot be seen as a progressive force in relation to the power structures of the world, since the aim is not to transform the power structures but to attain them and shape them after the needs of Asian and Third World elites.

At the same time, it is dubious whether the view that the United States is facing Russia alone in Europe and China alone in Asia is correct. While China is undoubtly taking advantage of the Saudi-created fiscal crisis in Russia, China would not strive towards the collapse of the Putinist regime in Russia – because that would weaken the Chinese position in a short time-frame.

What has brought China and Russia together has been the increased western security entanglements in the border regions perceived as vital by both powers. Nixon managed to coax China into an informal alliance with the US against the Soviet Union, through giving China what they desired (recognition and weapons), but nowadays, giving either China or Russia what they desire would lead to the jeopardization of the territorial integrity and sovereignty of key western allies (The Republic of China, the Baltic States, etc).

The future is dark and full of errors

Iraq Soldier

This decade began with the Arab Spring, which saw many dictatorships in the Middle East and Northern Africa collapse, with four states having turned into failed states. While economic growth and urbanization have brought hundreds of millions out of abject poverty, unsatisfied demands for political influence amongst the population as well as stress factors caused by the depletion of natural resources have driven and will drive societies towards the verge of political collapse.

This will increase the number of areas in the world where crises can emerge. Moreover, China and India are two societies which consist of entire civilizations, which have constantly increasing needs for securing their energy and food supplies – while both societies have political institutions badly adapted towards handling sudden stress factors. This could prompt more and more interventions in the future, and therefore increasing flashpoints between the West and the non-western world.

This is very bad, since what we need for the world in the future is not a race between great powers to deplete what natural resources are left, but a concerted effort by human beings, states, organisations and businesses to move towards a sustainable future for the human race. This can only be done through cooperation, sacrifices and a realisation that either we all will become winners together, or we will lose separately.

The EOS position

postcards-from-a-green-future-1_smape_11446

We denounce the idea of taking sides in a struggle which is happening within a narrative that is thoroughly based on the sham-work that is today’s growth-oriented paradigm. Yes, it is true that the Anglo-American and European powers have engaged in ruthless exploitation of Asia, Africa and Latin America for 500 years. And yes, it is true that within the BRICS powers, corruption and human rights violations are running rampant.

Ultimately, little of that will matter when we are down to our last fresh-water reservoirs, when the soils of the Earth are depleted of their nourishment, when climate change forces migrations of hundreds of millions, and when eco-system after eco-system collapses.

What is important is to increase our presence in social media and to convey a positive message of a realistic, attainable and better future for humanity, and to engage people to take part in the transition from our current paradigm into a new one that is based on the physical reality of our planet. This means that we must work to strengthen the legitimacy of international institutions, protect human rights and try to stay clear from cheering on one or the other side.

Our primary loyalty must under all circumstances be towards Terra, our common home.

stock-footage-people-dancing-together-around-shining-earth-earth-map-courtesy-of-nasa

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The statements, views, and opinions expressed in this article are solely those of the author and do not necessarily represent those of EMerging Equity.


Enrique Lescure is a student of political science, Sweden. He is a member of EOS.

EOS is an autonomous research organisation. It recognises the need for a sustainable civilisation to unlock humanity’s potential. Its goal is to enable the highest possible quality of life for all for the longest time possible.


This material is reproduced with the consent of EOS (Enrique Lescure). For more information on EOS, visit http://www.eoslife.eu/

About ETFalpha

Chief ETF Strategist & Co-Founder at EMerging Equity

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