South Korea as the global exemplar? Think about it

Self criticism is a Good Thing.  It’s usually kinder than the external version, and you get a chance to revise your argument.

So what to make of the mea culpa in the Financial Times from Jim O’Neill – the man self-credited with coining the BRIC (Brazil, Russia, India and China) acronym back in 2001.  Does he succeed in his mea recta?

Back then he argued that:

“since these countries were likely to continue their striking gross domestic product growth over the next decade, we urgently needed them to play a bigger role in global governance.”

Sure enough, during the 2008 global financial crisis, this was recognised in the formation of the G20, and adjunct bodies like the Financial Stability Board.  

Sadly, as anyone who was involved will testify, the shake-up did not make international confabs any less dull.  More worryingly, they seem to have become less effective.

So that bit of O’Neill’s hypothesis has not come to pass; the G20 does not seem to have replaced the old G7

Institutions need to reflect not only power, but an ability to agree on its use.  Despite having Italy and Canada on board, the old G7 functioned as a means for key Western countries (the Japanese were said to be most insistent on this labelling) to bolster and modestly influence American exercise of global power.  

Pre-eminently in challenging the Soviet leadership’s global pretensions.  From today’s perspective, it is incredible to conceive the political will needed to agree a Europe-wide deployment of new generation nuclear weapons to counter the Soviet build-up (and which had its political reward in the 1988 INF treaty).  

As New Zealand’s anti-nuclear posturing at the time might suggest, this sort of political co-operation is hard and risky work.  It certainly didn’t do many favours for the career of Germany’s then-Chancellor Helmut Schmidt.

It’s fair to say that the G20 doesn’t operate in this way.  Nor COP26 for that matter.  There’s not really global agreement on the fundamentals.

China has its own very-considerable ambitions; Vladimir Putin actively seeks to dispute Russia’s assigned status; while Brazil, India and South Africa (it’s been updated to BRICS) are a little more focused on their own narrow interests.

Meanwhile, Germany struggles with the fact that it is shaping Europe in its image, but much of Europe is not that keen.

And don’t underestimate the role of economics in the power politics.  As O’Neill points out:

“China is the only Bric country to have surpassed its growth projections, and India is not too far off from meeting its estimates. But due to dismal second decades, neither Brazil nor Russia have seen their nominal US dollar shares of GDP grow any bigger than they were back in 2001. The great challenge of how these countries successfully transition towards a higher income status for the whole of society remains unsolved.”

Quite a challenge when many of their best minds are to be found in Silicon Valley (and even one or two in London).

And it may be getting harder because:

“ … while the IMF predicts that developed economies will not suffer significant damage in the wake of the pandemic, emerging markets, with the exception of China, are expected to have far slower growth than projected before coronavirus struck.”

So it’s worth paying attention to O’Neill’s striking observation that:

“South Korea continues to be the sole shining example for those nations which genuinely aspire to that goal. In my professional lifetime, it is the only country which has evolved its economy to a level where its citizens are as wealthy as those in southern Europe.” 

And reflect that South Korea (like Japan before it) has perhaps been more successful than the others in integrating with those G7 nations – on their terms.  Over the same time, it has also transitioned from a conservative autocracy to a market-friendly and property-protecting conservative democracy.

Did Mr O’Neill consider the BRICKS acronym but decide it was too hard to integrate into a snappy narrative?

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