The BRICS as an Alternative Anchor for Global Economic Governance : A Comment

The BRICs economies (Brazil, Russia, India and China) created a buzz with a strong run in the global expansion of the 2000s and the help of a little pumping up of their tires by Goldman Sachs analysts who projected these economies would surpass the advanced countries within a few decades. The BRICs cachet faded in the 2010s but the concept is making a comeback as part of the geopolitical narrative of “multipolarity” being pushed by China and Russia in the context of the new cold war over technology and the new hot war sparked by Russia’s invasion of Ukraine. The BRICS (with the S now standing for South Africa) account for about a quarter of global GDP and 42% of its population and the group is being suggested as an alternative to the G7, with its own currency displacing the US dollar as the international vehicle currency, and its own norms reflecting the Global South’s perspective on issues not the Global North’s. And there is talk of expansion of the club. This note reviews the BRICS development record against the background of economic development around the world more generally as described in the literature on “convergence”. This literature documents that convergence is difficult and few countries graduate from developing to developed status. I argue that the reason for this disappointing record in the last several decades despite seemingly ideal conditions given an extended period of peak globalization, large international investment flows and significant facilitation of knowledge flows through the Internet, is that the two major drivers of convergence, diminishing returns to capital and technology diffusion, were rendered largely inoperative as technological breakthroughs generated increasing returns to capital in the Global North and pushed the technology frontier outwards, leaving the Global South struggling not to fall further behind let alone converge. Building on the previous two technological revolutions which ushered in the knowledge-based economy and then the data-driven economy, the world is again undergoing a technological revolution, the integration of artificial intelligence as a new form of productive asset – which is equivalent to industrializing “human capital”. Like the previous two revolutions, this again is centred in the Global North and again promises to generate increasing returns and lengthen the path to the technology frontier, making convergence for the Global South all the more difficult. I discuss the implications for governance alignment in the Global South and the role of BRICS in establishing the platform