There are two fundamentally different ways of understanding the rise of the BRICS concept. The first is that Jim O'Neill's idea was successful because it merely articulated an already existing drive towards a 'rising power identity' and closer cooperation among these countries. Under this assumption, the BRICS would have started holding summits anyways, perhaps in a slightly different composition, even if O'Neill had never invented the BRICs term in the first place.

According to the other perspective, Jim O'Neill not only invented the BRICs term, but also inspired emerging powers to work together and seek to develop joint positions on many important matters in global affairs. If this reading were correct, O'Neill's idea did in fact have a profound impact on international relations in the first decade of the 21st century, building channels of communication between countries in the Global South that may have otherwise never been created.

There are some powerful arguments for both sides. Those who see O'Neill, who will leave Goldman Sachs by the end of this year, as a mere commentator rather than active change agent of history, point out that South-South cooperation was already a hot topic before the BRICs term came to life. Indeed, already under Brazil's President Fernando Henrique Cardoso efforts were made to strengthen ties between Brazil and other emerging countries. Similar dynamics took place in Russia and India, which both experienced the end of the Cold War in a traumatic fashion and saw themselves forced to look for new partnerships.

Those with a more agent-focused reading of history say that emerging powers would have never been able to organise yearly summits had they not been provided with a global brand name – BRICs – that symbolized economic dynamism and power, and which, in turn, was backed by a similarly powerful brand name: Goldman Sachs. This made it highly advantageous for emerging powers to adopt the 'BRICs identity', and even other countries such as South Africa undertook diplomatic efforts to join the exclusive grouping. All this, they say, would have been unthinkable without O'Neill's helping hand.

The truth, alas, is likely to be somewhere in between. South-South cooperation was already on emerging powers' policy makers' agenda in the late 1990s – but it cannot be denied that the BRICs idea provided a meaningful boost that made today's BRICS Summits (with a capital S since South Africa's inclusion) possible. Jim O'Neill's idea thus had a significant impact on how we think about the changing power dynamics over the past 12 years.

The West is in decline and the world is becoming more multipolar. As a consequence, emerging powers such as China, Brazil and India are claiming for more power within international institutions. The questions of how existing institutions can adapt to new realities, and whether we need new structures to respond to recent changes, are among the defining puzzles of our time.

Robert Wade, a professor of economics at the London School of Economics (LSE), has written a thoughtful article – ‘The Art of Power Maintenance: How Western States Keep the Lead in Global Institutions’ by Robert Wade (Challenge, vol. 56, no. 1, January/February 2013, pp. 5–39) – claiming that the West remains far more dominant in existing institutions than is generally thought, and there is little reason to believe that the South will be in charge anytime soon. ‘The common narrative about China and some other developing countries rising to challenge the United States and other major Western states turns out to be an exaggeration,’ he writes.

More provocatively, he asserts that ‘the United States and other Western states continue to set the agenda of global economic and financial governance for the most part, while the big developing countries have exercised negligible leadership so far.’ Southern leadership, that is, remains limited. Wade's essay describes a series of case studies of global politics to show how Western states have managed to retain their position of global leadership even after 2008 and the onset of the long slump in Western economies. The results are fascinating indeed.

The first one shows how, in 2009, Western states led by the UK and the United States marginalised the United Nations General Assembly from a role in debating the global financial crisis and its impacts, so as to leave the subject to interstate organisations dominated by the West – which, naturally, were careful not to propose any measures that could be harmful to Western interests. Wade shows how Susan Rice outmaneuvered those who sought to give the General Assembly (the ‘G192’) a larger role. For example, General Secretary Ban Ki Moon denied any financial assistance to the Stiglitz Commission which had been tasked by the GA to provide an independent report. Despite the Commission's competence, the United States argued that it was their ‘strong view is that the United Nations does not have the expertise or the mandate to serve as a suitable forum or provide direction.’ The United Kingdom had ambassadors threaten the Commission's members to quit. As the West wanted, the G20 did the foreplay, and the IMF reassumed the role of sole legitimate forum for hard discussions and negotiations.

The second case study shows how, in 2012, the West almost succeeded in stopping the United Nations Conference on Trade and Development (UNCTAD) – dominated by developing countries – from further analyzing the global financial crisis. As a senior US delegate declared in one of the last negotiating sessions in Doha, ‘We don’t want UNCTAD providing intellectual competition with the IMF and the World Bank.’ In effect, the West said, ‘We do not want UNCTAD to discuss any of these issues, because UNCTAD is not competent to do so. They are for the G20 and IMF.’

The third case study shows how Western states managed, over 2008 to 2010, to craft a ‘voice reform’ in the World Bank, which appeared to give developing countries a significant increase in their share of votes but in reality failed to do so. Including only low-income and middle-income countries — the Bank’s borrower members — the voting share of developing countries increased from 34.67 percent to only 38.38 percent, while the developed (high-income) countries retained more than 60 percent. Japan, Germany, the United Kingdom, France, and Canada have even increased their share of total votes by a combined total of 4.1 percentage points after 2010.

The fourth shows how, in 2012, the United States retained the presidency of the World Bank, despite years of member state chorusing that the heads of international organizations like the Bank and the International Monetary Fund (IMF) should be open to all nationalities. Yet as I have pointed out before, Kim's and Lagarde's appointment also symbolised the emerging powers' failure to fully unite around an alternative candidate. This was particularly clear when the BRICS could not agree on jointly and openly calling on the United States and Europe to support Ngozi Okonjo-Iweala, the Nigerian candidate, to head the World Bank. As Wade rightly notes, ‘the story equally shows how the developing countries’ distrust of one another makes it easy for the US-Americans to split them with bilateral deals.’

The article makes the reader wonder whether the West has succeeded in transforming today's emerging powers into 'useful idiots', who are so proud that they are part of the G20 that they no longer defend developing countries' interests. Seen from this perspective, the rise of the BRICS may have been a positive development for the West, now that the poor have lost powerful defendants in Brasília and Delhi, who are increasingly defending big-power interests. At the same time, emerging powers should not complain: It is natural that the West will do everything do hold on to its power – after all, even China is not fully committed towards permanently including Brazil and India in the UN Security Council.

Wade rightly writes that Western states have been strikingly successful in their efforts to keep control of the commanding heights. Their success owes much to institutional rules they put in place decades ago, long before talk of the rise of the South – and still, the South is partly to be blamed for not being able to unite and present more powerful ideas about why reform is necessary.

* Oliver Stuenkel is Professor of International Relations at the Getulio Vargas Foundation
in São Paulo.

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