Crumbs from the BRICs-Man’s Table

As global recession enfeebles the rich world, big middle-income countries, led by the BRICs, (Brazil, Russia, India and China) have dramatically increased their economic interest in poorer countries, and by consequence, their influence. This has taken direct – aid, investment, and trade – and indirect means, and continues to increase rapidly: the growing drought of rich-world assistance to Africa has been met with a flood of investment and aid from the BRICs, and poorer countries are increasingly exporting to these middle-income countries. Yet details of these occasionally harmful deals often remain opaque : “rogue” aid may only prop up bad regimes, much of aid accompanies conditions that redirect benefits to the donor country, and frequently loans are simply extended on market rate. Furthermore, exporting to middle-income countries only increases poor countries’ dependence on a commodity-based export model and stifles the growth of value-added manufacturing that helped the BRICs themselves escape poverty. Still, the BRIC money has been greatly appreciated as it has ameliorated the worst effects of the recession for poorer countries. Whether that gratitude continues with global economic recovery and the BRICs can establish a lasting political counterweight to the rich world remains to be seen. – Yale Global