The changing face of power and influence
Sam Hardy, Bond Policy Coordinator, outlines the UK’s relationship with emerging economies.
The recent well publicised IMF (International Monetary Fund) leadership race has provided a convenient example of the shifting power balance in international affairs.
The BRIC nations (Brazil, Russia, India, and China) currently have a paltry 11 per cent share of the vote in the IMF while their economies collectively represent just over a fifth of world GDP and rising. Conversely EU member states continue to cling on to a 32 per cent share of voting rights while contributing just under 24 per cent of world GDP. This mirrors the broader state of affairs in international development with the EU and US setting the formal policy agenda even as their relative power diminishes. But things are rapidly changing with BRIC nations, as well as other big players like South Africa (an unofficial BRIC nation itself) and Saudi Arabia becoming more assertive and influential on development.
Rising global players
Since 2000, both in terms of bilateral trade and foreign direct investment, the role and influence of the BRICs, led by China, in the world’s Low Income Countries has risen massively. Low Income Countries’ exports alone, a primary driver of economic growth, to BRIC nations rose 25 per cent annually between 2000 and 2009. And while not in the same league, BRIC development financing has also surged, with the World Bank estimating the figure to be over US$26 Billion between 2000 and 2008. This rising contribution to international development is also empowering the BRICs as international development actors and making established development donors such as the UK change the way they work with them.
The Secretary of State for International Development has been quick to acknowledge this changing power-balance. In a recent speech he highlighted that the growth of emerging economies is as significant for Africa as the fall of the Berlin Wall was for Europe 20 years ago. He has stated that on specific development issues such as climate change, conflict, trade and financial stability the BRIC nations and their counterparts are now “indispensable players” at the global level. He has also talked of civil society influence becoming devolved from Western NGOs towards southern civil society as NGOs from Brazil to India start to find their voice.
Britain will increasingly need to look beyond its traditional partners.
UK policy and the BRICs
In policy terms, the UK’s relationship with the BRIC nations has been defined over the last six months by the Government’s recently published Bilateral Aid Review with development sceptics poring scorn on the Government’s decision to continue its India aid programme.
That India has a space programme and is an aid donor in its own right has been used by many commentators to highlight the changing dynamics of international development. In truth, India like all of the BRIC nations, still has huge levels of poverty and the Secretary of State has been clear in underlining that Britain’s aid money to India will be focussed specifically on those areas which have yet to benefit from the country’s economic growth
Equal partnerships in global development
While India remains a recipient of UK aid, the other BRIC nations have all now had their UK aid wound down. DFID’s priority will be forging constructive and equal partnerships with these nations on development outside of their borders, not least in BRIC involvement with the Low Income Countries, where they are having an increasing influence. According to a recent IMF report BRIC development projects are often highly specialised focussing on specific infrastructure improvement. BRIC development financing is also often different to the UK model with money coming in a blended ‘package’ of grants, loans and credit. Britain is already piloting joint development projects with BRIC nations – such as the UK and Brazil’s social protection programme in Kenya – and the UK’s disproportionately large development role on the international stage means that we still have leverage with the rising powers.
But with both Andrew Mitchell and the Shadow Foreign Secretary of State Douglas Alexander publicly acknowledging the rising geopolitical and economic influence on the BRICs, the way development will be done in the future is rapidly changing and Britain will increasingly need to look beyond its traditional partners in the US and EU to meet its international development objectives.
For more about Bond’s policy work: www.bond.org.uk/policy
The Networker magazine showcases and highlights key issues, emerging debates, news and opportunities facing the UK development sector. It's free to download as a PDF. Bond members receive a printed copy each time it is published.
