Calgary Herald – 19/09/2015
BANFF — For the 15 years that the Global Business Forum has brought business, academic and political leaders together, the BRIC countries have largely driven the world’s economic fortunes. This year, they each look to be at a crossroads.
Brazil, Russia, India and China appear to be on the brink of something, but as delegates at the conference heard Friday — it’s just not clear if it’s good or bad.
That’s merely the concern about the economy after years of seven and eight per cent, or even double-digit, growth after the turn of the millennium. Given the military and global security implications with some of these countries, it’s also potentially dangerous.
Rising geopolitical tensions between China and its Asian neighbours, the dictatorial rule of Russian President Vladimir Putin and even the long-simmering border disputes between India and Pakistan have the potential to explode like the current war/refugee crisis in the Middle East.
What’s going to happen next is anyone’s guess. It’s also been a topic for discussion for the more than 200 business, academic and political leaders attending the two-day conference here that this year had as its theme “Shifting Economic and Social Relationships.”
It was left to a Brazilian commentator — whose country is dealing with a massive corruption scandal that’s threatened energy giant Petrobras and extends to the government — to offer the most realistic assessment of what’s on the horizon.
“It is impossible to make any forecast in Brazil. It is impossible to make a forecast in any political environment,” said Thiago De Aragao, director at the Latin America-focused political consultancy Arko Advice in Brazil.
People’s political views are constantly subject to change, he said.
Take Putin’s shift from a grudging ally of the West during the Iraq War to a fearmongering despot who annexed Crimea from neighbouring Ukraine and rules Russia through crony capitalism.
“We thought it would be the case that the economic advances would make him more democratic but he became more autocratic,” said Andrei Illarionov, a former chief economic adviser to Putin, until 2005, who is now a senior fellow at the Cato Institute in Washington, D.C.
Illarionov was the “Sherpa” for Russia when it gained acceptance into the G8 industrialized nations that Canada hosted in nearby Kananaskis Country in 2002 but suggested democratic reform may not be enough to remove Putin from office.
“There is only one way to deal with this problem and it’s regime change,” he said, noting the state security apparatus may be diminished from Soviet days but Putin’s government uses propaganda far more effectively than earlier communist regimes.
The communist government in Beijing is attempting to deal with the apparent waning of a multi-decade economic boom and the potential impact on a large and restive public. In recent years, it has increasingly pursued military activity in the South China Sea that plays to nationalism at home but the military buildup has unsettled neighbours from Japan to Taiwan to Vietnam.
On Friday, Japan ended seven decades of pacifism since the Second World War and now will allow its military to engage in some overseas combat.
“Japan has to respond … China has to be balanced,” said Richard Ellings, president of the Seattle-based National Bureau of Asian Research. “Nationalism isn’t just rising in China it’s across the region and it’s a negative leading indicator … the temperature is rising.”
Meanwhile in India, reform of the domestic political institutions that would pave the way for an modern economy throughout what will soon be the world’s most populous country continues at a frustratingly slow pace.
“India is on the right track,” said Vasudha Sundararaman, chief executive of State Bank of India in Mumbai, adding government reforms have bolstered the underlying economic foundation. “It’s not the fragile economy people were talking about a few years ago.”
All the speakers expressed optimism about the long-term prospects for the countries they spoke about at the conference. If there was a theme it was that the endemic political interference in the economies of developing countries needs to come to an end.
The military adventurism by some countries in what is an increasingly multi-polar world — where the U.S. is not the only superpower — creates a level of geopolitical tensions that goes well beyond the expertise at a business conference.