Most of the international Summits and conferences are held in New Delhi. In that sense, holding the meeting of heads of state of BRICS nations in Goa is idiosyncratic of Prime Minister Modi who has despite several international sojourns and diplomatic encounters failed to grow out of his mold of a state Chief Minister and display at least an incremental movement towards being a statesman in the making.
His penchant for turning any serious (like surgical attacks) or ceremonial event (like BRICS summit logo with lotus the party symbol as dominant imagery) into a game of petty political one-upmanship is never ending.
In reality, the BRICS gathering is more of a regular conference than any significant political event. This observation needs a bit of explaining. BRIC the acronym of Brazil, Russia, India and China was first developed as the category of newly emerging economies by the former chief economist Jim O’Neill of Goldman Sachs based on their economic modeling. In the following study “Dreaming with BRICs: The Path to 2050”, it was projected that by 2050, this group would constitute the top six industrialized nations US and Japan being the other two besides BRIC.
Later on, South Africa was added to the list making it BRICS. BRIC nations did display double digit growth rate in these countries because of inflow of easy money and crude oil prices soaring beyond dollars 100 per barrel.
But such rapid growth was not sustainable for longer periods. Once the flood of cheap money started dwindling, China scaled down its growth rate to 6.5%; with crude oil prices tumbling below 30 dollars a barrel coupled with sanctions, Russian economy contracted by 4 %. Brazil started showing negative growth rates. No wonder even Goldman Sachs had quietly closed down its BRIC fund, having seen the loss of 88% of its asset value since 2010.
However, there are some lessons which we Goans can learn from the two BRIC nations namely Russia and Brazil. And that is the excessive reliance of Extractive Sector as principal economic activity and the resulting environmental and ecological disaster that may follow as collateral damage.
Russia from the beginning and Brazil as an unfortunate turn of history have been depending extensively on the export of natural resources for their economic survival and well-being. Consequently, these nations are facing problems similar to what the tiny Goa faces as member of the Indian state. One of the fundamental assumption the creators of BRIC concept made was sustained and abundant availability of primary resources. In reality, most significant resources currently necessary to maintain economic growth, such as oil, natural gas, iron ore, coal, other fossil fuels, and uranium have limits regarding availability. Secondly, its exploitation comes with sizeable environmental and ecological costs which if judicially and truthfully accounted for never made a case for significant growth and distributive justice. Hence there is a need for developing vibrant manufacturing sector which will process these resources and sell higher value-added products.
All this is not a discovery. Way back in the forties of last century famous Argentinian economist, popularly called as Latin America's Keynes, Dr. Raúl Prebisch had advocated this approach which gave rise to the subsequent Resource Nationalism and setting up of UNCTAD.
Brazil has been seen the most extraordinary case of socio-economic reversal of the century what is termed as the re-primarization. Stated in plain language, this means shift from diversified import substitution industrialization to increased dependence on agro-mineral export actively facilitated by crony capital. Between the mid-1930’s to the mid-1980’s, Brazil averaged nearly 10% growth in its manufacturing sector. The great reversal was initiated by Cardoso government in 1991, & continued by the workers’ party of Lula turning Brazil into a commodity exporter. The neo-liberal policies of Cardoso regime dismantled the manufacturing sector, and productive forces were replaced by the extractive economy in Mining, Agriculture, and Energy sector. The average growth rate of industry declined to a paltry 1.4%. Family jewels like Vale do Doce Iron mine and the state oil company Petrobras were sold to private sector at a fraction of its price. State support for the agro-business elite was seven times that of what was offered to the family farmers who represented nearly 90% of the rural labor force and provided the bulk of food for local consumption. During the 2008-09 harvest, the Ministry of Agriculture’s financial support for agro-business during was six times larger than the funds allocated for the highly publicized “Bolsa Familia” poverty reduction programme.
By 2011 Brazil tripled its raw material exports with the difference between the value of commodities and manufacturing exports increasing from $13 billion to over $100 billion in 5 years. Nearly 25% of Brazil ’s exports are composed of mineral products “ highlighting the growing centrality of extractive capital in the economy. During the same period, the destruction of the rain forests occurred at a rapid pace. And what were the environmental consequences? Between 2002 and 2008 Cerrado region’s vegetation was reduced by 7.5% or over 8.5 million hectares, mostly by crony or foreign agro-business corporations. Between May 2000 and August 2005, thanks to the expansion of the export sector, Brazil lost 132,000 square kilometers of forest due to the expansion of large landowners and multinationals engaged in cattle raising, soya and forestry.
The Brazil case is not just a narrative of an unfortunate society. It is a neo-liberal paradigm of internal colonialism based on extractive capital where state together with crony capital increase re-primarization and dependence on agro-mineral export. The internal colonialism depends on appropriating the precious but limited natural resources and launch an “Extract and Sell” spree with total disregard to environmental and ecological consideration or inter-generational equity.
It is important to note in this context that, over 60% of the total iron-ore exported from the country is from Goa alone, which is worth nearly Rs 1000 crore per annum. A classic case of internal colonialism perpetrated by both BJP and Congress since 1961. It is time Goans realize this sinister design of the ruling elites of Indian state and put their weight behind the civil society backed electoral initiative of Aam Adami Party.
