LARGE ALLIANCES AMONG EMERGING POWERS

By Marcio Pochmann and - - Reprint | | Print |

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BRASILIA, Oct 9 2008 (IPS) - Emerging powers are weaving alliances and reciprocal economic and political links that are modifying the traditional world order between the center and the periphery, developed and under-developed countries, and the planet’s North and South. One of the major movements in that sense is the IBSA Forum, formed by three democratic nations India, Brazil and South Africa which will hold its third summit meeting in New Delhi, next October 15th, writes Marcio Pochmann, Brazilian economist and President of the Institute of Applied Economics Research (IPEA). Along with expanding their economies in recent years, the three nations have increased their presence in the global economy. In 1975, the IBSA member countries amounted to 3.7% of the world’s Gross Domestic Product (GDP), while in 2006 that figure grew to 4.8%. In 1975, India, Brazil and South Africa accounted for 2.1% of world exports, and in 2006 that total grew to 2.9%. IBSA’s expansive trend is parallel to that of most of developing countries, which in 1970 amounted jointly to 25% of world exports, while in 2006 that total was more than 41%. Trade among Southern countries has grown in an even larger proportion.

Along with expanding their economies in recent years, the three nations have increased their presence in the global economy. In 1975, the IBSA member countries amounted to 3.7% of the world’s Gross Domestic Product (GDP), while in 2006 that figure grew to 4.8%. In 1975, India, Brazil and South Africa accounted for 2.1% of world exports, and in 2006 that total grew to 2.9%.

Being countries with extensive land areas, and with large and considerably diverse populations, it may be noticed that the weight of their domestic markets is a significant factor in their economic growth. Some differences among these countries should also be pointed out in order to focus on development as a balanced process in terms of future perspectives.

Brazil, South Africa and India have experienced much differentiated periods of fast GDP growth, being India the last of the three to undergo this evolution. There is always a time in which fast growth strategies reveal their limits and it is more difficult to mitigate tensions, especially of the social type. Apart from that, and this is essential, growth strategies are often reflected in an increasing structural diversity, whose most latent expression is the growth in income concentration.

This phenomenon is already happening in India. Between 1990 and 2004 it had a 24% growth in income concentration according to the Gini Index, while Brazil had a setback of more than 9% in 1990-2005, and South Africa had a more than 10% drop in 1990-2000. The Gini Index expresses inequality and is normally used to measure income inequity.

Brazil, at a time of rapid growth of its productive forces, has become aware that growth alone does not lead to development, given that most of its population was not incorporated into the process. That encouraged the drafting of a new Constitution that guarantees universal rights of access to education, health and income in case of misfortune or loss of working ability.

Although it was harshly criticized by many, that universalization movement promoted citizenship and a reduction in inequalities. Apart from that, studies commissioned by the Institute of Applied Economics Research (IPEA) revealed that this option assures a new and sustained growth drive. Given the promising possibilities that are opening up for Brazil with the discovery of new riches – in particular of huge hydrocarbon fields -, it will be possible, perhaps, to finally reconcile growth with the solution of social problems which, in short, is development’s true nature.

The fact that India, Brazil and South Africa sought to form the IBSA Forum acknowledges the benefits that stem from mutual action and cooperation. The 2003 Brasilia Declaration, approved by the three countries’ Ministers of Foreign Affairs, identified trilateral cooperation in trade, investments, transportation and tourism. Cooperation in science and technology is focused on biotechnology, alternative power sources, aeronautics and the aerospace industry, information technology and agriculture.

IBSA’s expansive trend is parallel to that of most developing countries, which together amounted to 25% of world exports in 1970, while in 2006 that total was more than 41%. Trade among Southern countries has grown in an even larger proportion.

South-South relations are more than a passing fade. Global economic trends show that exchange and cooperation between these countries is a necessity. Thinking of changes from a South-South perspective is the way to resume the debate on development, its dimensions and challenges. (END/COPYRIGHT IPS)