One of the iconic rock albums of my young adulthood was Pink Floyd’s rock opera The Wall. The theme was the wall, built by society and its establishment, cutting off youth from the rest of the world and the marrow of life. The most famous line of the album described education as “all in all, just another brick in the wall”.
By the time the album came out I was, technically, already on the wrong side of the wall. I was no longer a student, had graduated, had even tried my hand at teaching... only to bolt into the legal profession. I had progressed, or perhaps regressed, from ‘brick victim’ to ‘bricklayer’ to ‘brick maker’ in a few short years.
However, the album acquired its classic status because it appealed beyond the youth market. It spoke to all of us with a humanitarian interest in world affairs, fatigued by all the walls that partitioned the world and fragmented social justice.
There were visible walls like the Berlin Wall and other tangible if invisible walls set up by the Cold War. There were other walls, like that of apartheid in South Africa, held together thanks to the passive complicity of developed nations. There was the wall of catastrophic debt that separated what were then called the developing countries, such as Brazil, from the developed economies of the North. The latter were the creditors of the global South and imposing crippling interest rates.
For those of us, therefore, who remember those days, the fifth summit of the so-called BRICS nations (Brazil, Russia, India, China and South Africa) will have been a dramatic event. It was held last week and took place in Durban, South Africa.
It brought together five of the most dynamic economies of the world, no longer struggling, at a time when it is the former ‘developed world’ that is struggling to emerge from a deep economic crisis that has mired it in debt.
A single figure could capture the dramatic contrast between then and now. In 2012, the seven (former) leading financial countries registered an average growth of 0.7 per cent. The former laggards, in contrast, registered a common growth of about four per cent. It is almost painful to remember that the enviable four per cent actually represents the BRICS’ growth rate in the wake of an economic slowdown.
The importance of the Brics summit goes beyond the stark contrast of then and now. What was discussed and agreed on will have repercussions not just for the protagonists themselves. It will affect the eurozone, the special relationship between the US and the EU and global politics.
In other words, BRICS seem intent to bringing down other institutional walls of global governance, brick by brick, and to replace some of those walls with their own architecture.
The summit was preceded by news reports that suggested some of the shine was coming off the BRICS nations. Now established economies, they were facing problems of bureaucracy and economic slowdown. They were no longer exciting emerging markets. They needed to plan for the long haul.
Plan this way they did. They behaved with the confidence of nations that know that, between them, they represent 40 per cent of the global population and 17 per cent of world trade. The leaders of the two political giants, Vladimir Putin of Russia and Xi Jinping of China, both made it a point to praise the potential of the grouping.
The group went beyond the usual political rhetoric of urging cooperation to increase volumes of mutual trade, investment and technological and industrial partnerships. They proposed a mechanism to enable this. A Development Bank with access to $50 billion in funds to enable all this.
The repercussions are enormous. International groupings acquire greater solidity and durability when they build their first institutions. Moreover, the Development Bank could end up as a serious alternative, for the global South, to the World Bank and IMF, whose leadership is dominated by the US and Europe.
On the sidelines of the summit, China and Brazil signed a currency deal. An agreement to swap currencies, to the tune of $30 billion, to ensure enough liquidity for their bilateral trade to continue even if the world economy suffers from another financial shock.
The swap is strategically significant. China is Brazil’s biggest trading partner. In nine years, trade has grown from $6.7 billion per year, in 2003, to nearly $75 billion in 2012. Brazil is key export market for China, while it provides important resources, such as iron ore and soy products, to the world’s second-largest economy.
Such developments change the entire world, not just the economic relationships between the participants. What all the summit reports I read failed to point out is the political identity of the summit participants.
China and Russia are permanent members of the UN Security Council. The rest are leading candidates to become their respective continents’ representatives should the permanent membership be expanded.
The BRICS nations are engineering a change in the architecture of global governance as significant, potentially, as that which took place in the aftermath of WWII. All in all, a very different set of bricks in the wall!
John Attard Montalto is a Labour member of the European Parliament.