For Many Years Now, The BRICs have been known as a Consortium that was Predicted to Overtake The Economic might of The Developed Nations. But there are Issues which Put Doubts on The Very Viability, The Workability and The Long-Term Effectiveness of this Ambitious Bloc.
India can learn too. Slowdown can hit it faster than expected. With many sectors in the economy already overheating, with scams and corruption plaguing the conduction of clean business, and with lack of proper infrastructure and human development facilities, the country may suddenly find itself struggling to run half as fast as it is now. It can also lose favour in the eyes of the global investors, signs of which are already showing – as per the Ministry of Commerce and Industry, the country has received only $18.35 billion in FDI in the first 11 months leading to February 2011, indicating a y-o-y fall of 25.5%. The current figure also represents the lowest ever, since FDI inflow first crossed the $15 billion mark for the first 11 months of the fiscal year in FY2006-07. So, the state of affairs in India definitely calls for immediate need of improving governance, a robust infrastructure and better provisions of human development (education, health et al). Even the long impending border issues with China need to be sorted out.
No doubt, the economic uprising of the BRICs could (and will) have unexpected negative consequences for the global environment. So, apart from boosting per capita income, the challenge for the emerging economies will be to improve social security and environment – in order to achieve a living standard comparable to that in advanced countries – as well as increase domestic consumer demand and spending in order to balance the fall in global consumption.
The idea here is not to raise doubts over the growth of the BRIC economies. However, the fact remains that the growth is more likely to occur on an individual level and not as a bloc, as the hype created around these economies suggest. The reason lies in the fact that there are no attempts to address key differences within this bloc that are likely to hamper the growth that is expected of these countries as a unit. The factor here is the absence of a strategic alliance or, for that matter, even an attempt to discuss differences between them. There is no denying that a strategic partnership between these strategically located nations, given their socio-political relevance in their regions, will be highly beneficial for the BRIC bloc. However, the absence of a willingness on the part of any of these nations to discuss and resolve aspects of security, territory et al, leaves the consortium looking like a statue which cares little about strong bilateral ties.
The BRIC economies, though on the right track, are truly far from posing any competition, leave apart being a threat to the alliance of the West. Dr. Suvrokamal Dutta, Economic and foreign policy expert comments that as for the viability of the BRIC alternative to the existing unipolar world order controlled and dominated by US, three power blocs could pose a real challenge to the existing world order, both in terms of political hegemony and economic supremacy – BRIC, IBSA (both of these are official now) and the troika consisting of India-China-Russia. “There were several secret meetings held between the foreign ministers of these three nations during the Vajpayee regime and these meetings had created ripples in Washington, which then used the Tibet issue to vitiate ties between India and China,” he says, adding that a major drawback of the forum is the lack of discussion on bilateral issues and issues of strategic, security and military concerns. It is known to all-and-one that at present, members of the bloc, discuss only economic, social and cultural issues; to have real teeth, business, strategic and military ties should be developed and discussed. While the troika proposition will take long to materialise, the need of the hour is to stop addressing BRIC as a competition or threat to the West, and address our internal and external differences as members of the bloc. The downturn has already shown the entire world what our strengths are. It is time now to work on our weaknesses and capitalise on the growth which is here to stay.
It is apparent that a strategic alliance between the member nations of the BRIC, which goes beyond commerce and trade and enters uncharted horizons, including defence – on the lines of say NATO – will not only tilt the balance of power in its favour, it will, in real terms, help them emerge an economic might. The contours of such futuristic thought-process would envisage a bipolar world, wherein the Troika and Brazil have a greater say in strategic issues pertaining to the landmass bordering Arctic Ocean, Atlantic Ocean and the Indian Ocean.
Not only this, the bloc will also benefit from India’s good economic and diplomatic ties with the Middle East nations. If Troika, or for that matter, BRIC is to see itself emerge as a mighty force at par with the present Western Alliance, it has to wake up to reality. How long can you live in a fool’s paradise?
Read more....
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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Arindam Chaudhuri: We need Hazare's leadership
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IIPM: Indian Institute of Planning and Management
India can learn too. Slowdown can hit it faster than expected. With many sectors in the economy already overheating, with scams and corruption plaguing the conduction of clean business, and with lack of proper infrastructure and human development facilities, the country may suddenly find itself struggling to run half as fast as it is now. It can also lose favour in the eyes of the global investors, signs of which are already showing – as per the Ministry of Commerce and Industry, the country has received only $18.35 billion in FDI in the first 11 months leading to February 2011, indicating a y-o-y fall of 25.5%. The current figure also represents the lowest ever, since FDI inflow first crossed the $15 billion mark for the first 11 months of the fiscal year in FY2006-07. So, the state of affairs in India definitely calls for immediate need of improving governance, a robust infrastructure and better provisions of human development (education, health et al). Even the long impending border issues with China need to be sorted out.
No doubt, the economic uprising of the BRICs could (and will) have unexpected negative consequences for the global environment. So, apart from boosting per capita income, the challenge for the emerging economies will be to improve social security and environment – in order to achieve a living standard comparable to that in advanced countries – as well as increase domestic consumer demand and spending in order to balance the fall in global consumption.
The idea here is not to raise doubts over the growth of the BRIC economies. However, the fact remains that the growth is more likely to occur on an individual level and not as a bloc, as the hype created around these economies suggest. The reason lies in the fact that there are no attempts to address key differences within this bloc that are likely to hamper the growth that is expected of these countries as a unit. The factor here is the absence of a strategic alliance or, for that matter, even an attempt to discuss differences between them. There is no denying that a strategic partnership between these strategically located nations, given their socio-political relevance in their regions, will be highly beneficial for the BRIC bloc. However, the absence of a willingness on the part of any of these nations to discuss and resolve aspects of security, territory et al, leaves the consortium looking like a statue which cares little about strong bilateral ties.
The BRIC economies, though on the right track, are truly far from posing any competition, leave apart being a threat to the alliance of the West. Dr. Suvrokamal Dutta, Economic and foreign policy expert comments that as for the viability of the BRIC alternative to the existing unipolar world order controlled and dominated by US, three power blocs could pose a real challenge to the existing world order, both in terms of political hegemony and economic supremacy – BRIC, IBSA (both of these are official now) and the troika consisting of India-China-Russia. “There were several secret meetings held between the foreign ministers of these three nations during the Vajpayee regime and these meetings had created ripples in Washington, which then used the Tibet issue to vitiate ties between India and China,” he says, adding that a major drawback of the forum is the lack of discussion on bilateral issues and issues of strategic, security and military concerns. It is known to all-and-one that at present, members of the bloc, discuss only economic, social and cultural issues; to have real teeth, business, strategic and military ties should be developed and discussed. While the troika proposition will take long to materialise, the need of the hour is to stop addressing BRIC as a competition or threat to the West, and address our internal and external differences as members of the bloc. The downturn has already shown the entire world what our strengths are. It is time now to work on our weaknesses and capitalise on the growth which is here to stay.
It is apparent that a strategic alliance between the member nations of the BRIC, which goes beyond commerce and trade and enters uncharted horizons, including defence – on the lines of say NATO – will not only tilt the balance of power in its favour, it will, in real terms, help them emerge an economic might. The contours of such futuristic thought-process would envisage a bipolar world, wherein the Troika and Brazil have a greater say in strategic issues pertaining to the landmass bordering Arctic Ocean, Atlantic Ocean and the Indian Ocean.
Not only this, the bloc will also benefit from India’s good economic and diplomatic ties with the Middle East nations. If Troika, or for that matter, BRIC is to see itself emerge as a mighty force at par with the present Western Alliance, it has to wake up to reality. How long can you live in a fool’s paradise?
Read more....
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
