BRICS

A sustainability agenda for BRICS

The BRICS has invaded the Brazilian press and television media in the past few weeks. This acronym, so far very little known outside discussions among economists and specialists in international relations, was included on the national economic and political agenda after the Sixth BRICS (a group made up of Brazil, Russia, India, China, and South Africa) Summit, held in Fortaleza, Ceará state, just after the FIFA World Cup. The Summit results made it clear that Brazil’s future is increasingly tied to the fate of that bloc; that’s why it is so important to better understand our new “team.”

Key messages

1) The Sixth BRICS Summit took significant steps to build a new global geopolitical and economic order.

2) It is key that the media and public opinion in general have a better discussion on the meaning of the increasing and inexorable influence of the BRICS countries on global productive chains for the future of our planet and environment.

3) Current development models adopted by BRICS pose many challenges concerning social and economic inclusion and environmental protection. Hence, it is crucial to demand from BRICS a stand on how they understand sustainable development and how this will influence operations by the recently created New Development Bank.

The influence of BRICS on global geopolitics: from financial arrangements to the climate change summit

Institutionalizing BRICS as a bloc has a very important economic, geopolitical, and environmental meaning for our future. However, almost no one talks about the environmental aspect or the capacity and responsibility of the BRICS for influencing the planet’s future.

The creation of the New Development Bank and the Contingency Reserve Arrangement decided at the Sixth BRICS Summit formalized the group’s determination to act jointly within the international financial architecture and thus expand its instruments for influencing other countries’ development models.

The Fortaleza Declaration’s 72 agenda items made clear the bloc’s willingness to work on a broad array of strategic themes now under dispute in the global arena. Stressing the centrality of the United Nations, the BRICS assumed clear positions on the conflicts in Syria, Iran and its (related) nuclear issue, Afghanistan, Iraq, Ukraine, and Palestine. They also reaffirmed “the need for a comprehensive reform of the UN, including its Security Council, with a view to making it more representative, effective and efficient, so that it can adequately respond to global challenges.”

In signed declarations and acts, the BRICS member countries affirm their desire to work conjointly on climate change and biodiversity; they also express their willingness to strengthen sustainable development and renewable energy goals.

There is no doubt that the success or failure of the COP21 Conference of the Parties on climate change, to be held in Paris in 2015, will depend on the work of BRICS members. It is not yet clear whether or not the BRICS countries will act as a bloc. However, it is clear that these countries continue to avoid binding targets. Their explanation is that the fair, but now distorted, principle of “common but differentiated responsibilities,” as laid out by the 1992 Convention on Climate Change, could still be a justification to shirk greater responsibilities in relation to the international community.

In addition to the Fortaleza Declaration, but within the Sixth Summit framework, several bilateral acts and agreements were signed between Brazil and other members, involving areas such as energy, technology, defense, logistics, infrastructure, agriculture, industry, information exchange, and institutional aspects. A joint declaration between China and Latin America, inaugurating the China-CELAC Forum was also signed.

BRICS – more of the same or a real alternative for sustainability?

Currently, 43% of the world’s population lives in the BRICS countries. Their economic participation is growing, already surpassing 22% of the global GNP. Their combined carbon emissions already account for 36% of global emissions. The member countries are rich in natural resources that are vital for their populations and for the planet’s survival. BRICS members have very high rates of income concentration and their environmental challenges are still viewed as conflicting with their social and economic challenges.

Although all countries have had high rates of economic growth in the last decade, the bloc’s member countries, except for China, are in an accelerated process of reprimarization of their exports. This trend is a response to the huge Chinese demand for minerals, fossil fuels, soybean and other agricultural products. Such products have transformed the BRICS countries, and also their neighbors, into large suppliers of natural resources to the Chinese giant. To give an idea of the situation, primary products and manufactured products based on natural resources make up more than 85% of Latin American exports to China.

Methods adopted in the production of export commodities are based on large areas of monoculture, with intensive use of agrochemicals and minimal use of labor. This growth and development model, based on the extraction of natural resources and carbon-intensive economies, is characterized by frequent land conflicts, and violations of land rights by agribusiness and mining companies against peasants, Indigenous people, fishermen/fisherwomen, and Quilombolas.

In that same framework, manufactured products imported from China, made under demeaning working conditions, make it impossible to compete with Chinese industry. This increases the pressure to reduce labor rights and helps to push all emerging economies further down the road to de-industrialization.

This “division of labor” between China and the other emerging countries is not just unsustainable, but it is also a “made-in-China” reproduction of the unequal and dependent relations established with the old great powers. Understanding how alternatives to this scenario could be perceived requires revising the development model adopted by emerging countries in general and BRICS in particular.

Very little has been discussed about how (and whether or not) the BRICS countries will rethink their development models to ensure that sustainable exploitation and preservation of their natural resources, based on more equitable and low-carbon economies, may become the driving forces of those economic systems.

The Summit chose “Inclusive growth: sustainable solutions” as its main theme. However, it is precisely in this field where the bloc confronts the greatest hurdles and challenges.

Although the Fortaleza Declaration’s highlighting of so-called “sustainable development” merits praise, no definition of this expression can be found anywhere in the document. Despite the emphasis on a sustainable development narrative, the barriers related to social inclusion with sustainability remain the central and strategic problem for BRICS. They reveal the nature of the contradictions and tensions in the development models of member countries. Those models are rooted in sharp social inequalities, intensive exploitation of natural resources, and economies increasingly producing high levels of carbon emissions.

The New Development Bank – Problem or Solution?

One of the main results of the Sixth BRICS Summit was the creation of the New Development Bank (NDB), with initial capital of US$50 billion and a prospect of reaching US$100 billion. Initially, the Bank will provide loans only to bloc members, but there are indications that later on it will also service non-members.

Its main objective is to finance infrastructure and sustainable development projects. However, governments acknowledge that there is no definition for the meaning of sustainable development. Will the promotion of sustainability be a criterion used for selecting the infrastructure projects to be funded? Will it be solely a general direction to be followed in the Bank’s operations? Answers to these questions have yet to be provided, but government representatives recognize that the infrastructure projects they intend to support will have social and environmental impacts.

The experience with some of the bloc member’s national development banks shows us that there is a direct relation between the projects they support and the national development strategies of those countries. This is true for BNDES and its massive support for infrastructure projects. There is much available evidence (see infographics) of the strong growth of BNDES disbursements for projects of that nature, while there were very few fund allocations for social and environmental infrastructure. On the contrary, it becomes clear that much emphasis is given to large energy and transportation projects to support the model of intensive exploitation of natural resources geared to exports.

If the New Development Bank (NDB) takes as reference the funding profile of the national banks of some of its members, there will be a trend to expand even further the infrastructure projects to support development models that intensely exploit natural resources and expel populations from their territories. They are also destined to support the export of those resources to Asian markets, with high levels of carbon emissions.

However, one must acknowledge that the possibilities for influencing NDB’s design and guidelines is more favorable than in the case of existing national and multilateral banks. The BRICS bank is just being born. Many definitions are still open, and the beginning of its operation still depends on legislative approval in the five member countries.

In the case of national and multilateral banks, such as the World Bank, the campaigns to create social and environmental safeguards always had to seek out small breaches to minimize and reduce damages within the general framework that shaped their foundation. Now, civil society organizations have the opportunity to influence the Bank’s design and guidelines at the very beginning. This will depend on one factor still not defined in the BRICS functioning: whether or not they are open to social participation.

Given the lack of definition by the governments of what they understand by “sustainable development,” it is key that the debate on sustainability in this new and powerful geopolitical bloc is placed on the public opinion agenda, on the political agenda, and especially on the media agenda because undoubtedly the BRICS countries will influence not only our economies, but also the future of our planet.

This article can also be found in Portuguese and Spanish.

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