In the publicity-rich world of economists today, the acronym BRIC is often thrown around indiscriminately as the ultimate in opportunity. Are Brazil, Russia, India and China really all they are chalked up to be? Multitasker Marcos Troyjo has co-founded a special laboratory at Columbia University to get some answers.
The star system that turned Hollywood’s output into a kind of visual and creative monoculture seems to have freed itself from the gossip columns and spread to what used to be more serious parts of the daily news. Similar to the brummagem VIPs from the Top of the Pops, entire nations are now given thumbs up or down by individuals or organisations, from New York Times columnists, to Standard & Poor and Moody teams, much to the delight of investors who thrive on volatility. A fairly new group to join the international analysts is the BRICLab, a working group with a limited focus, namely throwing the kliegs onto the emerging markets of Brazil, Russia, India and China mainly, nations that are on the lips of all those who wish to park their technology and funds in a place where they can grow without too much effort.
The idea of the BRICLab was born about three years ago following a lecture given by Marcos Troyjo, a career diplomat, accomplished negotiator, professor, popular speaker and panellist. The event took place under the aegis of Columbia University’s emerging markets programme, which is led by economist Christian Deseglise, who is also head of Global Asset Management of HSBC in New York and himself a Columbia graduate. Following the talk, the two men conversed about emerging markets and how the very notion of ‘emerging’ markets was incomplete when describing countries like Brazil and China. Together they suggested to Columbia’s Dean Of the School Of International and Public Affairs, John Coatsworth, the creation of a lab, a crucible of analysis, a forum dedicated to the study of the four BRIC nations.
The BRICLab became a reality with Troyjo as co-director and lecturer for a semester-long graduate course called The Rise of BRIC. He also organises conferences on BRIC around the world, the first of which took place in New York last year, the next of which takes place in Rio in May, another one with a focus on Russia will take place in New York in December. The BRICLab was also set up to offer a series of executive education courses, two-week long courses called Doing Business with BRIC. As an institution regarded as a world leader in international affairs education, Columbia University has given its full backing to the Lab.
Evidently, there was a huge yet unsatisfied need for an arena of academic discussion devoted completely to BRIC. The inaugural conference in December in New York was attended by 500 people. “Interest in the Lab has been overwhelmingly positive,” says Troyjo, whose own class is completely booked. “I think we really set up something that was in demand both at Columbia and, more generally, in the international study of global affairs.” In fact, the positive reception of the Lab has kindled the idea of holding a BRICLab conference in Geneva in the near future to continue fostering discussions about BRIC.
The changing balance of economic power
Old ideas and prejudices do not work in the post-Cold-War era. As Marcos Troyjo suggests, the rise of BRIC is playing out in a global scenario much changed from the one that existed 22 years ago, when the Iron Curtain was finally raised. International relations, geopolitics and geo-economics shaped by the Cold War underwent a monumental shift. Says Troyjo: “The US and the USSR were the superpowers and suddenly the US became the sole hyperpower with more than 40 percent of global GDP, a country that was not only a nuclear power but also a country able to intervene militarily around the globe with conventional forces within a couple of days.”
With regard to the former Soviet Union, Troyjo underscores that Russia is a BRIC country whose historic trajectory obviously differs from that of Brazil, India and China. Russia today still carries the memory of being a superpower and has its own opinions on global issues. “Russia takes an interest in everything that’s happening in the world,” he points out, “and sometimes it behaves as if it were still a superpower.” Russia is a member of the UN Security Council, it is a nuclear state, it is the largest country in the world, it is the world’s largest producer of oil. It has more scientists than any other country in the world. No other country has as many people devoted to R&D as a percentage of the population. On the other hand, the demographics are not as promising as those of the other BRIC countries. “There is also an attitude problem,” says Troyjo. “In Brazil, as well as in China and India, there is a general consensus that the country is growing, that the future is going to be better, in Russia, people think the country is losing prestige, losing international stature, which creates a sort of nostalgia for the Soviet period, which I think is very dangerous.” As much as the United States are also having doubts, so is Russia. For Troyjo, the next five years will be very important for Russia, which will have to reinvent itself as an upper-middle power in global affairs, an important power in regional affairs, and it will have to regain some of its economic strength and put its political house in order to be able to “fly its political objectives higher in political affairs internationally”. Russia, he is quick to point out, is the BRIC country with the highest per capita GDP: USD 14–15,000.
Return of the nation-state
The big changes in global politics have been accompanied by enormous changes in the economic sphere. Twenty years ago, there was an uncontrollable trend toward regional economic integration, with Southeast Asia, Latin America, North America all following the example of the European Union in facilitating international commerce by supporting a trend toward economic blocs that were supposed to lead to political integration. As a consequence, the concept of the nation-state was being challenged by the new concept of the regional economic bloc.
In an article entitled A Volta do Estado-Nação written for Brasil Econômico, Marcos Troyjo elaborated on the degeneration of international blocs in favour of a me-first mentality at the national level – whether due to expedience or necessity is not clear. In the good economic times of the 1990s, international cooperation seemed to be on an inexorable rise, perhaps toward Francis Fukuyama’s “end of history” scenario cited in the article, in which sovereign nations progressively disappear in favour of global institutions.
Today, things are very different, Troyjo feels. “In contrast to the excitement over regional economic blocs that existed twenty years ago, the past four years have brought grave doubts about this trend, especially in Europe, as to whether Europe is on the right track with its integration process. It’s a fiscal problem, it’s a labour problem, it’s a macroeconomic problem, it’s an interest rate management problem, it’s an exchange rate management problem. Is Europe going to be an actor in multilateral feuds rather than just solving its own internal economic problems?” These same regional doubts are also found elsewhere in the world. North America’s NAFTA members have not changed their relationship in the past fifteen years. There has been no further economic or political integration of any kind. In the case of South America, it has simply stalled, especially between Argentina and Brazil now that the exceptions to Mercosul regulations seem more numerous than the inclusions.
For the BRIC nations, regional integration has been replaced by the revival of the nation-state. The world has been internationalised but is now reverting to the nation-state superseding internationality in importance, even within regional blocs. “When China is called on to play a more substantial role in international finance, it does not think of the region, it thinks of itself. There is also a trend in the United States to go back to a more insular, national position rather than a global one. I really think this return of the nation-state is fascinating.”
However, an increasingly individualistic approach to international affairs does not signal the end of cooperation between nations, but rather a reduction in their intensity. Among the BRIC nations themselves, there is much intent on cooperation as indicated already by the heads of state meeting in an annual forum to provide the necessary venue for collaboration to take place at the highest political level. It would be very wrong to expect this collaboration to evolve into a free-trade bloc or even a consensus on how to act in other international forums. Despite the shared commonality of economic growth, the BRIC nations do not necessarily share the same views on policies, with Brazil’s and India’s agricultural policies notably divergent. Troyjo’s observation succinctly sums up the current relationship among BRIC countries: “It’s nearly impossible to achieve a consensus among these four countries,” he says. “It’s better to approach BRIC as four nations that individually will play significant roles in defining the first half of the 21st century rather than as a collective with cohesive political or economic policies.”
Perhaps the relationships of Asian economies today serve as a model for the future elsewhere in the world. Though a distant memory now, there was a time when Japan was the leading economy in Asia, a shining example of economic growth in a stable political environment that served as the continent’s paradigm of success to be emulated by its Asian brethren. As we have seen over the past 20 years, the rise in Asia has indeed proceeded as expected, albeit under a very different leadership with China replacing the Land of The Rising Sun as the driving force.
Brazil, Russia, India, and China face a far more complicated situation today than countries did 20 years ago. In contrast to the bilateral nature of ideological disparities in the past, there is now a proliferation of ideologies vying for supremacy. This situation makes international agreement ever more problematic. Conflict is now multilayered in nature rather than dominated by two opposing ideological powers. The world is finding it difficult to arrive at some agreement, as shown by the inability of the WTO to conclude the Doha round of talks. “We also have conflicts in the values of the West,” Troyjo suggests. “There is criticism outside the ideological borders of the Western interpretation of the world as well as within the West very much exemplified by the Occupy Wall Street movement.” This, of course, affects the way BRIC nations organise themselves today.
Troyjo sees a world in which BRIC nations play ever more significant roles, with the logical result of the increase in strength of a variety of social, economic, and political principles being the “multipolarity of world influence rather than the automatically dominant influence of the United States”. With regard to the projection of values, the US is no longer seen as the dominant force. The two wars waged in Iraq and Afghanistan have brought an enormous co-liability to the image of the United States as a projector of values and international good behaviour. “Its disregard of the United Nations and international law have brought into question what is going to happen in the US. The very asking of these questions itself already indicates a monumental shift in global relations.” On the economic front, “the irresistible emergence of China” has progressed at a startling pace, with the Chinese economy expected to overtake the US economy sometime between 2019 and 2025.
Brazil hits its stride
Brazil is riding the wave of positive expectations from the discovery of pre-salt oil reserves and the foreign direct investment (FDI) that has been pouring into the country in anticipation of the windfalls from biofuels and these deep-water oil reserves. Thus cashed up with financial resources, the government is looking to stay ahead of the curve. “The Brazilian government is putting together a very robust procurement policy so that once again it can play the role of entrepreneur and assume a key role in the reindustrialisation of the country,” Troyjo says. “This economic might that may be generated, though, does not necessarily reflect an increase in global ambitions for Brazil as an individual nation. Brazil will modulate its international ambitions with regard to political objectives through multilateral institutions.”
He does not see Brazil’s cooperative, multinational approach as being at odds with the trend in increased individualism among nations, neither does he think the fortified role Brazil seeks to play in international affairs as a peaceful country promoting harmonious cooperation will create enmity among those countries that have traditionally spoken with leading voices in the international sphere, not necessarily espousing the same point of view as Brazil with regard to international relations. “Even with the strengthening of the nation-state concept, there must be a forum for international communication, with the United Nations a logical locus for important discussion. I think there are different opinions on what role the United Nations should play, but even in the case of the most individualistic countries such as the United States, the lessons of this decade-long unilateral drive under the Bush Administration have left very negative marks for the image of the United States abroad and for its own interests, very realistically speaking, so I actually see a strengthening of the UN now.”
Rather unexpected is the fact that so much of Brazil’s economic growth took place during the 2003–2010 presidency of Luíz Inácio Lula da Silva, better known to the world simply as Lula, whose multiple candidacies for president were rejected by the Brazilian people three times before his eventual election in 2002. That this former union leader, so greatly feared by the conservative administrations of the 1980s and 1990s, should be the person to oversee the great economic growth sought by those same administrations is ironic to say the least. Regarded as a radical left-wing figure, the founder of the Brazilian Workers’ Party became the most popular politician in the country’s history – itself no small achievement in a nation where political figures are more often loathed
Nevertheless, sound economic management during Lula’s administration was not the only reason for the country’s burst in wealth. That the simultaneous discovery of oil reserves and growth in foreign demand for Brazilian resources took place during the time Lula was in power added to the government’s ability to get things done. Since Brazil’s oil production is expected to rise from the current two million barrels a day to six million barrels a day by 2020, it looks as if the policies for economic growth brought in by the Lula government will continue unchanged under President Rousseff.
As Brazil grows in stature, so, too, grows the curiosity about the country. Increasingly, Brazil is not only a voice heard in world affairs but also a venue for other voices to be heard. The most important international conference of 2012 takes place in Rio de Janeiro 20–22 June, with 120 heads of government expected to attend the United Nations Conference on Sustainable Development, informally known as Rio+20. Brazil will host the 2014 World Cup soccer tournament as well as the Games Of The XXXI Olympiad in Rio de Janeiro in 2016. As they did in Tokyo (1964), Mexico City (1968), and Seoul (1988), the Olympic Games are expected to serve as something of an affirmation that a developing nation is economically capable of undertaking such an enormous financial commitment. The Summer Olympics in Rio will follow Olympic competitions hosted by two other BRIC nations, the 2008 Summer Olympics held in Beijing and the 2014 Winter Olympics to be held in Sochi.
Three questions for Marcos Troyjo
Along with economic success comes political clout. How will this pan out for BRIC?
They will perform according to what they want for their populations, what they want from the world, and what they want for the world. The way BRIC countries will fare in global relations is the result of their ambitions, on how they model their national interests, on how they organise the relationship between will and resources.
What would a country like Brazil want for and from the world?
It wants the United Nations to be a reorganised institution with Brazil playing an enhanced role as permanent member of the Security Council, with international decisions regarding peace and security taken at the Security table. Brazil wants the WTO to be strengthened. It wants liberalising talks with regard to agricultural products. But what it wants from the world is unclear, because it does not know what it wants for itself!”
What about China?
China wants to continue being a major trading power with access to the most important markets in the world. It will continue to carry out public-private partnerships to accommodate foreign direct investment. It wants to continue being the most important receiver of FDI in the world. China wants to be an aggressive force in business diplomacy by maintaining a leading position in world trade as well as the dominant economic force in Asia, in Africa, and in Latin America where it has positioned itself as the dominant provider of infrastructure. It wants to be the dominant buyer both of mineral and agricultural commodities from Latin America. It also seeks to avoid direct confrontation with the United States in geopolitical issues, preferably by having the United States stay out of regional affairs in Asia. China is less interested in what happens in Europe and in international finance, unless, of course, what happens in international finance affects the US securities held by the Chinese government or in any way affects the important role of currency reserves in Chinese economic strategy. China knows very clearly what it wants for the world and from the world.”
Man of many hats
A regular op-ed contributor and commentator for print and electronic media outlets in Brazil and around the world, Marcos Troyjo, who hails from Brazil, is also a noted author who has written several books including Technology & Diplomacy; Brazil: Competitiveness in the Global Marketplace; Manifesto of Business Diplomacy; and Trading Nation: Power & Prosperity in the 21st Century.
In addition to being a prolific commentator, he has been a career diplomat, accomplished negotiator, university professor, and lecturer and panellist. He recently co-founded – with economist Christian Deleglise – the BRICLab at the School of International and Public Affairs at New York’s prestigious Columbia University, where he teaches a course called The Rise Of BRIC. Columbia is now the first educational venue in the United States with a course to specifically increase knowledge and awareness of the social, economic, and political systems of Brazil, Russia, India and China.
Marcos Troyjo’s academic credentials span three continents. He is a researcher at the Centre d’Études sur l’Actuel et le Quotidien (CEAQ) at the Université Paris-Descartes (Sorbonne) and professor at Ibmec, Brazil´s leading business school. Troyjo obtained his PhD in Sociology of International Relations from the University of São Paulo (USP), where he formulated the recently-launched Program on Innovation and Business Diplomacy, offered by USP´s Foundation for the Technological Development of Engineering. He is also the founder of the Centro de Diplomacia Empresarial in Rio de Janeiro, where he teaches business diplomacy to the current and future generations of world leaders in the fields of economics and political science.
Article by Robert La Bua