Reality or mirage?: BRICS and the making of multipolarity in the global political economy.

• Author: Unay, Sadik
• Position: Emerging markets Brazil, Russia, India and China - Essay

In the first decade of the new millennium, the international system embarked on a grand process of transformation from the short-lived and unipolar post-Cold War regime to an unprecedented and heterogeneous configuration of international relations and a global political economy. This profound transition is perceived to stem from a multifaceted shift from Western political, economic, and cultural predominance to a more diverse and sophisticated system in which emerging/resurgent powers increasingly assert their respective interest formulations, distinctive values and worldviews. Therefore, in the developing international system, the complex diversification and asymmetric distribution of national/regional and public/private power assets arguably create obstacles to the unilateral temptations of all global powers, albeit with varying degrees. The wider redistribution of political and economic power elements, as well as deepening interdependence among the established and new actors, are the fundamental ingredients of the emerging global order which render issues of global governance increasingly vital.

On the side of the global political economy, the main driving forces of the emerging order have been the accelerated trends of global integration through transnational production networks, and strenuous flows of trade, finance, information and services. The perceptive change in the major parameters of the unipolar global political economy--dominated by the U.S. in the context of the 'embedded liberal compromise'1 of the post-war era and two generations of neoliberalism since the 1980s (forms of Washington and Post-Washington Consensus)--acquired a new impetus with the global economic crisis after 2008. Mature industrial economies, conceptualized through the widespread notion of the 'Triad'--made up of the U.S., Western Europe and Japan--have become increasingly integrated and interdependent with several groups of emerging economic powers, led by China, India and Brazil, over the course of this transformation. These countries took bold steps toward integration with global capitalism by occupying prominent positions in the global supply chain and production networks, thanks to their unrivalled manufacturing potential and an untapped labor reservoir, thereby altering their impact on the global governance architecture. They were joined by countries controlling international energy flows (oil and natural gas) that had strong global leadership ambitions including some Gulf countries, but most notably the ambitious and resurgent Russia. Since the early 2000s, the emerging powers of the multipolar global political economy have been involved in a 'competitive game' (2) to build up commensurately large international reserves, acquired through trade surpluses from manufactures or energy exports. This, in turn, triggered massive capital flows from established capital markets in London, New York, Frankfurt and Tokyo to emerging financial hubs, which had huge consequences for the recognized norms and balances of the global financial system, including exchange rate volatilities and expanded opportunities for speculation. In the emerging system of multipolarity, major players such as China and Russia cautiously used their economic influence over Western politico-economic interests as a diplomatic tool to accelerate the transformation of global governance structures toward a more balanced status quo. The major revisionist bloc in the world economy including China, Russia, India, Brazil and South Africa (BRICS) triggered manifestations of Western (mainly Anglo-Saxon) anxiety concerning the future trajectory of transformation in the international economic order.

This article is aimed at presenting a critical account of the BRICS as an analytical category within the context of ongoing debates of multipolarity in the global political economy, which acquired added vibrancy in the aftermath of the recent global economic crisis. To this end, the evolution of theoretical debates in politics, political economy and development literatures are highlighted from the conventional center-periphery models to nuanced formulations of multipolarity. The historical evolution of the BRICS from an international investment strategy to a widely adopted symbol for the alleged decline of American/Western hegemony is evaluated by looking at various signals indicating the speed and reality of this decline. The premature, superficial or ideologically motivated characters of various analyses on 'hegemonic decline' and 'power shift' arguments are carefully underlined. Then, the internal composition and features of the five states comprising BRICS are studied in an attempt to show the high degree of heterogeneity in domestic political-economic regimes, geo-strategic alignments and national interest formations involved in this unorthodox grouping. In stark contrast to the exaggerated and generalized approaches depicting the categorical decline of American power and the rise of China or the BRICS in the global order, this study offers a subtle understanding of this systemic transformation by focusing on the wide scope of interdependence between the established and emerging actors of the global political economy. Therefore, it is preferred to conceptualize the BRICS as a relatively successful 'international regime' operating in a specifically designated field, rather than the harbinger of a profoundly novel global order. In the same vein, it is emphasized that decisive power instruments in international finance, trade, marketing, mass-media and global governance structures continue to reflect the interests and values of the 'triad,' despite the complex interdependence and more balanced distribution of power.

Challenging Conceptual Presumptions: From Center-Periphery to Nuanced Multipolarity

In the emerging landscape of the modern global political economy, sustained access to strategic natural resources and energy became a central element of economic competitiveness, which considerably expanded the interest areas of major powers across the world. Concurrently, the financial, commercial and productive factors of economic growth, as well as environmental sustainability and governance of global crises, provided the revised context of complex hegemonic struggles within deeper interdependence. This transformation stimulated a lively debate in many fields and literature about the prospective configuration and future trajectories of the main actors within the emerging international system. The major emerging powers were characterized by their strong desire to maximize economic capacity and to translate economic might into political influence in global platforms. The expansion of the playing field in the world economy led to pervasive anxieties in the Western world. Conservative political scientists and realist international relations scholars began asking what the transformed world economic order would look like, and whether this last 'global shift' (3) would instigate new international conflicts due to the intense competition over scarce economic and energy resources. On the other hand, liberal economists and liberal institutionalist international relations scholars drew attention to the emergence of a more inclusive and multipolar global political economy--one in which new players interact more substantially with established actors and form relations of complex interdependence. (4) This development was interpreted as a positive trend that could lead to world peace and stability, as sophisticated socioeconomic interdependencies could reduce the risks of military conflict and violence. At this juncture, a central issue arises concerning the nature of the shift from the conventional center-periphery model to multipolarity in the modern global political economy and what this means for the BRICS countries.

As stated, the classical center-periphery notion maintained that the world economy is organized around two poles that are linked to each other in an asymmetrical power relationship, whereby countries in the center control and influence developments in the periphery. Countries located in the center were considered preeminent in industrial manufacturing and therefore generated a consistent trade surplus, which they exported to the peripheral areas via financial capital, which institutionalized relationships of financial dependency. Moreover, the flow of trade was largely in a unidirectional form, with high-value industrial goods exchanged for primary goods, commodities and low-value consumption goods. (5) During the era of financial liberalization, the classical center-periphery model has been updated to include countries with open capital markets and market-determined floating exchange rates, such as the U.S., the U.K. and members of the Euro zone in the center; meanwhile, countries with relatively closed capital markets and managed exchange rates --China, Russia, East Asia and Organization of the Petroleum Exporting Countries (OPEC) countries--were placed in the periphery, or semi-periphery of the global system. (6) Accordingly, this updated model assumes that the center in the system undertakes the central role of issuing the main international reserve currency and maintaining its stability in terms of purchasing power over tradable goods and services. In this nuanced conceptualization, the ability to maintain market efficiency in the presence of floating exchange rates (the norm in advanced capitalist economies after the 1980s) is indicative of maturity and depth in financial markets, as well as the effectiveness of the established rules and institutions that safeguard monetary and fiscal stability. (7) On the other hand, countries in the periphery and semi-periphery are assumed to face serious problems in maintaining a floating exchange rate due to their structural and institutional deficiencies--as a result of which they peg their currency to major...