The Brics narrative is crumbling—the five countries need transparent institutions and lessons in self-relianceby George Magnus / March 21, 2016 / Leave a comment
Read more: Big ideas of 2016: the decline of the Brics
The term “Brics” lives on as an acronym linking the world’s largest emerging economies, Brazil, Russia, India, China and South Africa, but the notion it was meant to convey about the development of a new world order, based around them, is dust. When Goldman Sachs closed its “Bric” investment fund after nine years at the end of 2015, a period in which assets under its management had fallen from a peak of $800bn to just under $100bn, it seemed to signify the end of an idea. Only India looks as though it has the potential to sustain high economic growth, but even then not without qualifications. Last week provided some good examples of why the Brics are in the news, mostly for the wrong reasons.
Brazil is in its worst recession on record. Against this backdrop, the country’s political crisis is gathering momentum: a full-blown constitutional crisis may be near as the executive, legislative and judicial branches of the country’s government dispute each other’s powers, while President Dilma Rousseff may soon be impeached—it is alleged she broke federal accounting laws. Judicial investigations into alleged corruption involving the elite, oil giant Petrobras and the inflated contracts of construction and engineering companies are unrelenting. There have been large demonstrations in Brasilia and Sao Paolo over recent days as it has become known that former President Lula was offered a government post so that he will be shielded from investigation. The move was duly blocked by a Judge of the Brazilian Supreme Court. As I wrote last week, this spirited anti-corruption campaign could serve Brazil well in the long-run, to the extent it helps to bring about a change in government, attitudes and respect for stronger, independent institutions. For now though, economic policy is paralysed. Brazil’s economy is in intensive care, its fiscal position perilous.
Last week, Russia made headlines with its sudden announcement that it will withdraw its armed forces from Syria. Whatever this really means,…