Russia, China and the BRICs: How should the West respond to the new challenges?

On the hydrocarbons front, China is rapidly shaping up as Russia’s dynamic new customer. Gazprom, which is forever encountering hurdles in the European Union, looks to be headed towards signing a deal by year’s end to supply China with 38 bcma piped gas from 2018 onwards. Rosneft is planning to triple its exports to China to about 50 million tonnes by 2018: China will pay up front for those supplies in the form of loans of up to US $30bn on favourable terms. This is just what the cash-strapped Russian oil corporation needs to complete its takeover of TNK-BP, which has made it the world’s biggest oil company. But the two countries are only just beginning to draw on what one analyst has described as the "best synergy on the planet”. 

The deepening of the Russo-Chinese partnership, however, is not confined to trade. There are signs that the two countries are drawing closer politically, having long seen eye-to-eye on major international issues, including, most recently, Syria. In China, Xi’s visit to Moscow – his first foreign trip as new head of state – has been hailed as a "well-deserved riposte to Washington for America's military 'pivot' to Asia.” As if to underscore that assertion, the two sides signed a deal under which Russia will supply China with 24 Su-35 fighters along with four Lada-class submarines. 

Further underpinning their deepening relations in defense, Xi became the first foreign leader to set foot in the Russian Armed Forces' Operational Command Center. With both powers opposed to US plans for the deployment of a missile shield beyond America’s borders, that event carried an implicit warning to the White House: by ignoring our vital security interests, you risk encountering a Russo-Chinese alliance capable of scuppering your plans.

Arguably, the steady rise of the BRICS is an even more significant game-changer. The scale of the impact of the BRICS on the global economy is still not fully appreciated. China’s GDP is now about half of that of the US (although in terms of purchasing power parity it may already exceed that of the US), while the combined GDP of the BRICS is forecast to equal that of the G7 countries by the mid-2020s at the latest. 

 

So far, the significance of the grouping has been played down, not least owing to the member countries’ disparate make-ups and often conflicting geopolitical interests. However, the BRICS have developed – and continue to develop – new means of economic and political cooperation. At the Durban summit, progress was made towards establishing a development bank, a business council and a ratings agency. The overriding strategy is to reform the globe’s financial architecture so that it reflects changes in the relative economic weight of the leading global players and hence becomes more robust. It is the strong belief of the BRICS that such reforms are also in the best interests of the West.

 

 

 

 

 

 

First of all, let me preface my comments by saying that I’m one of the biggest China bulls around. Its economy in real terms will overtake that of the US by the mid-2010’s, if it hasn’t already. It’s already bigger in a range of industries, from traditional heavy industry (steel, coal) to consumption (car sales, e-commerce). Its manufacturing wages have caught up with Mexico’s, which is a quintessential middle-income country. If the average Chinese is now about as prosperous as the average Mexican, then the PRC’s total GDP – taking into account its vast population – is now well ahead of America’s.

Nor is it a house build on sand, as many Sino pessimists would have you believe; rather it is built on solid, steel-reinforced concrete. Its economic growth is NOT dependent on cheap exports. And fantasies about its "exploited” cheap labor force, which will become increasingly uncompetitive as it develops, belie the fact that the average Chinese now scores higher in international standardized tests than the OECD rich country average. Given the centrality of human capital to economic growth, China’s rise to the top tables of world power is all but assured.

It would be very worrying if China’s ascent was accompanied by the bellicose rhetoric and militaristic posturing adopted by other rising Powers of the past, like the Kaiser’s Germany. But "yellow peril”-type hysteria aside, this does not seem to be the case. China spends a mere 2% of its GDP on its military, i.e. about twice less in proportional terms than either Russia or the US. This is a most fortunate confluence of events, especially for Russia, as competing with China is unrealistic in the long term –as long as the latter’s economy is an order of magnitude bigger. On the other hand, deep engagement with China holds out a number of benefits.

First, China gets access to Russian energy resources, bypassing the vulnerable routes past the Strait of Malacca (either overland via Siberia, or across the top of the world via the thawing Northern Sea Route), while Russia gets access to Chinese capital and technologies – much of the latter purloined from the West – true, but so what? Second, both countries secure their frontiers, allowing them to focus on more troubling security threats: The Islamic south and possibly NATO in Russia’s case, and disputes with Vietnam, Japan, and a US that is "pivoting” to the Pacific in China’s case. Third, resources can be pooled to invest in Central Asia and root out Islamist militants and the drug trade – an issue that will assume greater pertinence as the US withdraws from Afghanistan.

Frankly, the West is too late to the party. It had an excellent chance to draw Russia into the Western economic and security orbit in the 1990s, but instead it chose the road of alienation by pointedly allowing in only the so-called "captive” nations of East-Central Europe. Putin’s reward for his post-9/11 outreach to the US was a series of foreign-sponsored "colored revolutions” in his own backyard. While in their rhetoric both he and Medvedev continue to affirm that Russia is a European country, in practice attitudes toward Europe and the West have come to be based on practicalities, not lofty "values” that they don’t even share. So it is only natural that with time Russia came to be more interested in pursuing relations with the BRICS ("The Rest”) in general and China in particular.

The West’s response hasn’t been enthusiastic. The BRICS are written off as a bunch of corrupt posers with divergent geopolitical ambitions that will stymie their ability to act as a coherent bloc, with Russia and China coming in for special opprobrium. While there’s a nugget of truth in this, it misses the main point: The BRICS might be poorer but by the same token they are growing faster and converging with the West, or at least China and Russia are; and while they don’t see eye to eye on all things, they agree on some fundamentals like multi-polarity, a greater say for developing nations in the IMF and World Bank, and the primacy of state sovereignty.

Here is a telling anecdote by an online acquaintance of his recent experiences with the European news channel, Euronews: "A feature of this site is that there’s a world map with happy and sad smileys on it to indicate good news and bad news. And there on Moscow I spotted a sad smiley, so I focused on it, thinking there would be a report on the already day-old and forecast to last another day blizzard that is raging right now across the Ukraine and European Russia … And the "bad news” that I read? The meeting between the Russian president and his Chinese counterpart together with a report and an analysis of the increase in trade between those two states. That’s really bad news, it seems, for some folk.”

And this is not so much an isolated incident, but a metaphor for the general state of West-Russia relations: While the former expects a certain degree of respect and even submission from the latter, it doesn’t tend to make reciprocal gestures and then acts like a jilted lover when Russia gives up and goes to someone else’s bed. But that’s the reality of a globalized world, in which the West isn’t the be all and end all, and countries have choices. It is high time that the West mustered the humility to finally accept this fact.

Most Western journalists and commentators will inevitably talk about the BRICS solely in terms of economics. There are good reasons for this. The BRIC acronym was coined by Jim O’Neill, a top economist at Goldman Sachs and utilized to sell the world’s emerging global markets as an investment package. At the time, he had been pondering what the 9/11 attacks on the US meant for the future shape of the world.

"I'll never forget that day," O'Neill said. "It was right at the core of how I dreamt up the whole thing ... Something clicked in my head that the lasting consequence of 9/11 had to be the end of American dominance of globalization ... that seems to be exactly what happened." The new century after September 11th would be defined not by the world's sole hyperpower or even its "War on Terror” but by the economic rise of the four biggest emerging market economies – Brazil, Russia, India, and China.

And O’Neill was obviously right. The idea of the "BRICS” as an investment package was a huge success and consequently took hold of the imagination of the world’s press. He was also right in his economic forecast. In the decade since 9/11, the BRICS economies have grown astonishingly fast from only 8 percent to nearly a quarter of the world’s economy and are forecast to increase that share to a full third by 2020. In 2012 the average growth of the BRICS countries was as high as 4 percent, compared with only a 0.7 percent increase in the advanced OECD economies of the West, many of which remain mired in recession. The BRICS have lifted hundreds of millions of their citizens out of poverty. Their collective GDP per capital has tripled. Russia is no longer even classified as an emerging market by the United Nations Development Program but rather as a developed country in the middle-income bracket.

O’Neill has since reflected, "My only regret on the first BRICS analysis of 2001 is that we weren't bolder. Between 2001 and 2010, the BRIC economies' GDP rose much more sharply than I had thought possible even in the most optimistic scenario.” This has led many analysts to suggest that the future of the world economy depends on the rise of the BRICS.

But in many ways, economics is just the beginning of the story. With their formation as an official multilateral association during the summit in Russia in 2006 and the inclusion of South Africa as a member in 2010, the BRICS have since taken on a life, direction and momentum of their own, beyond merely a convenient term for an economic grouping of emerging markets or as an investment package. The BRICS association today is far more about global politics, the future of the world order, and the international system of states. 

The BRICS have become the foremost political representative of the interests of "The Rest” – that is, countries others than the developed states of the West, which have dominated the world unchecked for the last two decades. This is not a formal alliance or bloc in the fashion of old, nor does it signify confrontation; rather, it is an organic change of global focus, structure, and paradigm. The Unipolar World is past its prime and fading while the BRICS represent the emerging centers of the new Multipolar World of great and regional powers. The capital flows from the West to the East and from the North to the South make possible a more effective and fairer distribution of global wealth and power.  Global economics has become geopolitics.

After two decades of rampant interventions, "regime changes” and political interference under the disingenuous and self-serving guise of  the selectively applied and self-proclaimed "Right to Protect” (R2P) and "human rights”, the BRICS principles mark a step back toward restoring the sanctity of the United Nations Charter. Russia and China are often accused of being "revanchist” or "revisionist” states, bucking the established Western Hegemony and order. However, in reality it is the Western states themselves who have been the revisionists under the aforementioned doctrines, engaged in a stealth attempt at subverting the UN Charter and international law under so-called "emergent norms”.

The BRICS member states have expressed a staunch commitment to the UN Charter’s founding principles of the inviolability of state sovereignty and non-interference in domestic affairs. This has been reflected and showcased in their joint positions on Libya and Syria, which condemns foreign interference as "unacceptable”. They also maintain that these civil conflicts must be resolved through dialogue and compromise, with the international community serving only as the facilitator and mediator of this necessarily internal process.

Russia and China already have permanent seats on the United Nations Security Council. India, Brazil, and South Africa are widely considered top contenders for permanent seats under the much-needed reform of the Security Council to better represent the global distribution of power. Thus, the restoration of the principles of the UN Charter in international relations is sure to become the model for the emergent Multipolar World.

The BRICS member states may have different political systems and adhere to different ideologies and cultural values. However, because of their shared interest in emerging from the West’s shadow and claiming their rightful share of respect and influence in international institutions, they hold similar views on how to address the most pressing global issues. The BRICS, therefore, present a model for future international relations and global governance. This model will be based on the following values: non-aggression, peaceful co-existence, pragmatism, cooperation, multilateralism and respect for one another’s sovereignty, interests, cultural differences, and regional spheres of influence.

In order to continue their development and ensure the emergence of this Multipolar World the BRICS need one another. And they know it.

If the Wall Street Journal is right about the world, then the BRICS summit in Durban, South Africa was just an empty parade. The way the WSJ sees the world, free, unlimited trade on terms ultimately laid down from Wall Street is more invincible than Superman: Free market theorist David Ricardo solved all the problems of international business and trade 200 years ago – and no other model will ever work.

But, of course, the Wall Street Journal is not right. Ricardo died in 1823. He did not live to see steam-powered trains on iron railroads or speed of light communications around the world from the electric telegraph, both of which were invented within 15 years of his death. Free market efficiencies work on a large scale between compatible economies. But protecting major markets and industrial zones from unfair foreign competition works too. The British Empire had become the greatest the world had ever known in the 150 years before Ricardo put his own simplistic theories to paper. And the German Zollverein, or Customs Union, created in 1815, eight years before Ricardo’s death, would allow Germany to unite and economically outstrip Britain in the next half century.

For all its soaring rhetoric, the BRICS summit did not come close to creating an integrated economic bloc independent of, and a potential rival to, the US-dominated North American Free Trade Agreement (NAFTA) or the 27-nation European Union. China and India both have far broader trade and investment ties to the United States than they do to each other or to Russia, Brazil or South Africa –  the other BRICS nations.

But the BRICS summit, the fifth the bloc has held so far, was still of world strategic importance. All five nations have a real interest in resisting the United States and the European Union in the broadest strategic sense. Above all, they all resent American and European efforts to lecture them on democracy and human rights and they all fear any US or EU attempts to impose their standards on the BRICS nations, or on other countries.

In fact, trade and investment ties among the BRICS nations have been growing rapidly and will continue to do so. Their growth is generated by the enormous demand of China and India for food, energy and other resources supplied by the economies of sub-Saharan Africa and South America. Russia is a huge energy and resource exporter too. But Russia is unique in remaining a global military and nuclear power. It can therefore provide a security dimension to the BRICS bloc that it would otherwise lack.

It remains to be seen how soon and how well the BRICS Business Council, which was set up at the Durban summit, will function. The same goes for the group’s Contingent Reserve Arrangement. However, given the continuing crises in the euro-zone nations and the untamed vast budget deficits and political deadlock in the United States, the CRA could become a significant global force far sooner than any Western analysts imagine.

The BRICS simply cannot be ignored: their nations boast a combined population of around 2.9 billion – that is, around 40 per cent of the human race. China’s annual GDP is already around 50 per cent that of the United States. But its industrial base is already far vaster, though still much less advanced. And China has an enormous annual balance of payments trade surplus, while the United States is hundreds of billions of dollars per year in the red. Growth rates in the five BRICS nations have been slowing, but they still far outstrip those of the United States and most of the main EU economies. The combined GDP of the BRICS is projected to equal that of the G7 mature industrial nations by the mid-2020s at the latest. 

The ghost of David Ricardo and the cardinals of his faith of the free markets and minimum government who write for the Wall Street Journal, London’s The Economist and Financial Times will continue to try to pretend the BRICS bloc does not exist. And even if that grudging admission must be made, they will continue to claim that it does not count. But BRICS do exist and do count. 

A century before David Ricardo, one of the greatest scientists who ever lived, Sir Isaac Newton, formulated his laws of motion: The second of them states that every action generates an equal and opposite reaction. The creation of the BRICS bloc is a clear reaction to the over-optimistic efforts to impose Western economic and political concepts on the rest of the world, regardless of whether they work in different societies or not. This is the kind of ideological rigidity and arrogant blindness that ultimately discredited and exhausted the communist cause around the world. Ricardo would never have understood this. But Newton would have. And Hegel too.

The global power shift from the West to the East cannot be limited only to the BRICS as an alternative economic and political club. Other countries also participate actively in the shaping of a new economic and political reality. The BRICS group is still a heterogeneous framework with an obvious economic leader – Beijing – and a vocal political leader – Russia. However, China’s influence in the BRICS group is by far the strongest. China’s GDP already surpasses the combined economies of the remaining BRIC countries and its economy is the fastest growing in the BRICS group. It is therefore more correct to say that the global power shift is led primarily by China with the active participation of Russia, Brazil, India, and other countries.

 

The ongoing shift will most probably result in the emergence of a new China–United States bipolarity. The cooperation/competition between Washington and Beijing will shape the major global trends in the 21st century. Nevertheless, both "superpowers” will have to take into account the interests of the other significant global poles of influence – Russia, the European Union, India, Brazil, and Japan. The US and China therefore need to start competing for the support and engagement of other important international actors, such as Russia and the EU.

   

With its emerging dynamic cooperation frameworks, Asia-Pacific gives Russia a unique opportunity to play a prominent role in global affairs. The absence of Moscow from major Western institutions, such as the EU, NATO or OSCE, does not allow the Kremlin to have similar influence in Europe.

 

The Asia-Pacific region is the world’s fast growing region, offering numerous opportunities for the economic development of Siberia and the Russian Far East. Russia’s increased interest in non-European customers highlights the level of uncertainty at the heart of its economic relationship with Europe – an uncertainty largely based on question marks about the future level of European demand for Russia’s natural resources and other exports. Russia, as a key supplier of energy to Europe, is particularly affected by a drop in energy consumption in the EU. Around 80% of all Russian oil exports, 70% of gas exports and 50% of coal exports are to the EU. The economic crisis and competing supplies have reduced the volume of Russian gas sold in Europe. Gazprom’s gas sales in the EU fell by 8% in 2012.

 

What are the reasons behind this trend? Some of the factors are short term, among them the economic crisis. But the Russian energy sector's uncertainties could be compounded if several EU energy companies continue to renegotiate their long-term gas contracts with Gazprom in order to take less gas from Russia or if they decide to take more gas from alternative suppliers (e.g. Qatar or Norway) that offer more flexible price and supply conditions. 

The prospects for Russian gas exports may look even bleaker in the longer term. The Third Energy Package, adopted last December, could significantly limit Gazprom's ability to own infrastructure assets in the European market. And the EU's own attempts to diversify its sources of energy – through, for instance, greater use of liquefied natural gas and the Caspian Sea gas – could eat into Russia's share of the European market. There is also the prospect of a lower-carbon economy (Roadmap - 2050) and its impact on overall demand for natural gas. Even partial implementation of the EU's carbon-reduction plans could reshape Europe's gas market landscape, lowering the likelihood of a significant growth in the consumption of natural gas. 

Uncertainty about energy demand in Europe is causing significant changes in Russia's mid- and long-term strategy. This helps to explain its attempts at geographical diversification and aggressive entry into the new markets in the Asia-Pacific region. Asian countries have strong demand for Russian exports and they are ready to offer higher prices than in Europe.

That certainly does not mean that Russia will turn its back on Europe – far from it. The EU is set to remain Russia’s key economic partner for years to come. It is, however, clear that Moscow wants to make sure it has the flexibility to shift export destinations, protecting itself against price and demand volatility. 

This trend hardly comes as a surprise for Washington. The US is also shifting its economic and political attention from the Atlantic to Asia–Pacific and engaging with all important regional players – China, Japan and the ASEAN countries. 

China-Russia rapprochement is part of the broader push by Moscow to diversify its economic and political ties. Currently it is driven more by economic rationale than by strategic imperatives. It is, therefore, safe to assume that the supply of sophisticated military hardware and technology transfers would be limited. China is rapidly emerging as one of Russia’s key competitors, often producing similar hardware. For example, many defense analysts are certain that China's J-11B fighter jet is a rip-off of Russia's Su-27. 

On the contrary, the future of mutually beneficial cooperation in energy looks much brighter. Russia’s Gazprom and China’s CNPC are about to sign a supply contract. Rosneft’s decision to export more oil to Sinopec and CNPC may result in the joint development of Russian offshore oil and gas deposits. 

The deepening rapprochement between Russia and China can best be explained by the fact that both countries are governed by pragmatic and business-oriented leaders who want to capitalize on the opportunities offered by the complementary structure of their economies and their very long (more than 3,600 km) shared border. Russia has a plentiful supply of the hydrocarbons and raw materials that are essential for China’s continued growth. But trade relations will also develop toward more value-added products and technology transfer. At the same time China also wants Russia to become a market for its products. After all, Russia will soon become the biggest consumer market in Europe.

Another positive factor is that both countries are non-interventionist in global affairs. They do not interfere in the sovereign affairs of other countries, and they do not want to become targets for such policies either.

China-Russia solidarity is underpinned by the fact that they both have been subjected to aggressive interference in their affairs by the US and individual EU countries. The aim of this interference (and the accompanying propaganda) seems to be the weakening of Russia as a great power and the fomenting of internal discontent in China. However, the result has been the exact opposite. It has served as a strong catalyst for mutual understanding between China and Russia and a mutual appreciation of how much they really need each other

How should the West respond? It should stop its aggressive drive against these countries, abandon its global interventionist agenda and try, instead, to participate in peaceful cooperation with both. However, I am afraid it is now too late, with the West having commenced its new Cold War against Putin’s Russia a decade ago. Cooperation between Russia and China in the defense sector will, therefore, grow ever stronger in direct response to the threat that the Western powers pose to both countries.

The characterization of the BRICS as a "global game-changer” is surely not an exaggeration. The figures are there for anyone to see. The combined GDP of the BRICS will equal that of the G7 by 2020. The BRICS are steadily growing while the G7 countries continue to slumber. The formation of the BRICS group is merely a reflection of the fundamental changes taking place around the globe. In fact, the acronym of BRICS was initially conceived precisely to symbolize those changes. However, some of the wise leaders in that group of countries seized on the idea and made it reality, endowing the grouping with ever greater clout in world trade and politics. There is nothing the old West can do to change this trend. The best approach is to acknowledge the new situation and adjust to it.

 

The West has to recognize that its old business model has to change – just as the German and Dutch governments so preposterously told the Cypriots. It has lost all its former advantages: democracy at a time when others did not have it (now most countries have more or less of it, while Europe is consolidating within its undemocratic European Union); good education at a time when others did not have it; technological advantage; the ability to suck cheap raw materials from other countries and sell back value-added products; military might and so forth. And the next – and – final blow will be the loss of the monopoly positions of their currencies (the Euro and US dollar), with which they have been able to finance their economies at the expense of everyone else. When all these advantages have gone, the only thing left to be done will be to change at home. The sooner this happens, the better.

When Dr. Henry Kissinger was serving as Chancellor of the College of William & Mary (2000-2005), I, as a member of the Advisory Council of the Reves Center of International Studies and as a columnist for "The Virginia Gazette” (which, founded in 1736, is one of America’s oldest newspapers), had several opportunities to have informal discussions with him.

During one of his give-and-take sessions with William & Mary students majoring in international relations, I had an opportunity to ask Dr. Kissinger what was the main driving force that motivated President Nixon and him to cut a deal with Mao Zedong back in 1972.

Eschewing politically correct or high-brow explanations, he said it was the fear that the Soviet Union and Communist China would repair the breach between them and once again form a united front against the United State and its allies.

A similar danger is facing the United States again. President Putin may not be an ideal partner for President Obama to provide support to democratic regimes or promote human rights around the world. But neither was Mao Zedong. Nixon and Kissinger have many critics. But their China policy, based on "real politics,” has withstood the test of time.

It is time for President Barak Obama and Secretary of State John Kerry to fashion a Russian policy that is based on "real politics” and equally capable of withstanding the test of time.

After reading the other panelists’ contributions to the topic of the BRICS, I was compelled to write follow-up remarks. At the risk of annoying my AUM colleagues, as did Cato the Elder, I keep on repeating: We can’t understand the significance of the of BRICS phenomenon by focusing exclusively on GDP, foreign trade, currency reserves, military budgets, the number of nuclear-tipped rockets and so on. Such quantifiables do matter, but as history shows, they all too often lead strategists to the most tragic miscalculations.

Numbers can be very seductive yet treacherous, as Napoleon and Hitler found out in Russia. It was not the severe cold, mud, or "mysterious Russian soul,” of course, that proved their undoing. Their tragic fate was preordained by the conviction of their racial and cultural superiority. Cognitive psychology explains why a nation (or an individual) convinced of its superiority is doomed to end up tragically. The wining of numerous battles skews a nation’s conception of reality; and one day, when it meets its match, it is crushed because it no longer has an objective picture. Indeed, why should the intellectually and in every other respect superior power attend to the inferiors’ point of view?  

This brief detour into cognitive psychology can help us understand what is happening and is likely to happen with the rise of the "Rest,” to use Fareed Zakaria’s terminology. Convinced of the US’s exclusivity and superiority, American strategists overlook a more subtle dimension of the "geopolitical chess game.” Their cognitive blindness is manifested in their gunboat diplomacy to which they have become wedded. In November 2011 the Obama Administration declared its intention "to provide a balance to China’s rising influence” by beefing up the US military presence in the Asia-Pacific region.[1] This shows how helplessly oblivious the Hegemon is of the true nature of the forces that are causing the current shift in the geopolitical "tectonic plates”. 

The US simply does not understand and fails to take into account the power of emotions and the subconscious drivers of the "developing” nations. To grasp the extraordinary role the past plays in contemporary China and the power of emotions one has to look at China’s "century of humiliation”. Humiliation began with the First Opium War of 1839-1842. Thanks to its technological superiority, Britain managed to defeat China and force its Empress to open the country to trade in opium imported from India. Thus India was encouraged to produce the narcotic and the Chinese to consume it.[2] 

Perhaps even more insidious and humiliating was the effort to change China spearheaded a century later by one of the first American NGOs. The Rockefeller Foundation evolved a rather ambitious plan of dragging what at the time was a country of 450 million people into the modern age. The root cause of China's backwardness and inability to come to grips with the modern world was deemed to reside in her archaic beliefs, practices and language. The Chinese language was considered to be incapable of conveying sophisticated thoughts and scientific ideas. So the Rockefeller Foundation developed a plan for the total reconstruction of China. Not only its agriculture and political system but also China’s very culture was to be overhauled. The English language was to become a dominant language and the Chinese language radically reformed, while the "godless coolies” were to be Christianized.[3] Whether coincidently or not, thousands of missionaries were evangelical Protestants, just as John Rockefeller Jr. himself. Ironically, all these efforts to modernize China were undertaken at the height of the Great Depression, when millions of Americans were starving at home. 

The past powerfully resonates in contemporary Chinese and Indian psyches and shapes their relationship with the West. When China and India observe the beefing up of the US military presence in their vicinities they see the same old gunboat diplomacy and relive the "century of humiliation”. Surprisingly, both India and China demonstrate a rather relaxed approach to the US maniacal "showing of the flag”. They smirk at the American marines’ on-shore landing exercises in Australia and new anti-ballistic systems. They equate their national security with building strong modern economies, national high-speed railroad and highway systems, state-of-the-art airports, tallest buildings, space-manned station and so forth. They also rely on their own secret "weapons of mass-destruction” – the two trillion dollars’ worth of US federal securities, Chinese-made electronic gadgets, Indians’ writing software and the running of American utilities companies.  

The development and institutionalization of the BRICS might have major repercussions for the world order. The rise of the BRICS will have a tremendous inspirational effect on other "inferior races and cultures”. When the BRICS nations manage to persuasively demonstrate that they are capable of self-governance, of producing supercomputers and nano technologies, of achieving decent living standards, and of living under democracy (and they are nearing that), the theory of racial hierarchy and progress will meet its own Stalingrad. We can only hope that the commonsense of the Anglo-American elite will match the wisdom of ancient civilizations represented in the BRICS and the new world order will come without major contest on the battlefield.  

 

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