Since 1991, "reform" in India has meant only one thing: unbridled commerce and getting the state out of the economy. Not surprisingly then, nothing is being done to reform public institutions, which are a scandal in themselves. Efficient public administration? Don't even think about it. In a nutshell, India is a chaotic economic dynamo and yet, in some sense, not even an emerging power, not to speak of a superpower.
Russia, too, is still trying to find the magic mix, including a competent state policy to exploit the country's bounteous natural resources, extraordinary space, and impressive social talent. It must modernize fast as, apart from Moscow and St. Petersburg, relative social backwardness prevails. Its leaders remain uneasy about neighboring China (aware that any Sino-Russian alliance would leave Russia as a distinctly junior partner). They are distrustful of Washington, anxious over the depopulation of their eastern territories, and worried about the cultural and religious alienation of their Muslim population.
Then again the Putinator is back as president with his magic formula for modernization: a strategic German-Russian partnership that will benefit the power elite/business oligarchy, but not necessarily the majority of Russians.
Dead in the Woods
The post-World War II Bretton Woods system is now officially dead, totally illegitimate, but what are the BRICS planning to do about it?
At their summit in New Delhi in late March, they pushed for the creation of a BRICS development bank that could invest in infrastructure and provide them with back-up credit for whatever financial crises lie down the road. The BRICS know perfectly well that Washington and the European Union (EU) will never relinquish control of the IMF and the World Bank. Nonetheless, trade among these countries will reach an impressive $500 billion by 2015, mostly in their own currencies.
However, BRICS cohesion, to the extent it exists, centers mostly around shared frustration with the Masters of the Universe-style financial speculation that nearly sent the global economy off a cliff in 2008. True, the BRICS crew also has a notable convergence of policy and opinion when it comes to embattled Iran, an Arab Sprung Middle East, and Northern Africa. Still, for the moment the key problem they face is this: they don't have an ideological or institutional alternative to neo-liberalism and the lordship of global finance.
As Vijay Prashad has noted, the Global North has done everything to prevent any serious discussion of how to reform the global financial casino. No wonder the head of the G-77 group of developing nations (now G-132, in fact), Thai ambassador Pisnau Chanvitan, has warned of "behavior that seems to indicate a desire for the dawn of a new neocolonialism."
Meanwhile, things happen anyway, helter-skelter. China, for instance, continues to informally advance the yuan as a globalizing, if not global, currency. It's already trading in yuan with Russia and Australia, not to mention across Latin America and in the Middle East. Increasingly, the BRICS are betting on the yuan as their monetary alternative to a devalued U.S. dollar.
Japan is using both yen and yuan in its bilateral trade with its huge Asian neighbor. The fact is that there's already an unacknowledged Asian free-trade zone in the making, with China, Japan, and South Korea on board.
What's ahead, even if it includes a BRICS-bright future, will undoubtedly be very messy. Just about anything is possible (verging on likely), from another Great Recession in the U.S. to European stagnation or even the collapse of the eurozone, to a BRICS-wide slowdown, a tempest in the currency markets, the collapse of financial institutions, and a global crash.
And talk about messy, who could forget what Dick Cheney said, while still Halliburton's CEO, at the Institute of Petroleum in London in 1999: "The Middle East, with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies." No wonder when, as vice president, he came to power in 2001, his first order of business was to "liberate" Iraq's oil. Of course, who doesn't remember how that ended?
Now (different administration but same line of work), it's an oil-embargo-cum-economic-war on Iran. The leadership in Beijing sees Washington's whole Iran psychodrama as a regime-change plot, pure and simple, having nothing to do with nuclear weapons. Then again, the winner so far in the Iran imbroglio is China. With Iran's banking system in crisis, and the U.S. embargo playing havoc with that country's economy, Beijing can essentially dictate its terms for buying Iranian oil.
The Chinese are expanding Iran's fleet of oil tankers, a deal worth more than $1 billion, and that other BRICS giant, India, is now purchasing even more Iranian oil than China. Yet Washington won't apply its sanctions to BRICS members because these days, economically speaking, the U.S. needs them more than they need the U.S.
The World Through Chinese Eyes
Which brings us to the dragon in the room: China.