Interdependence and the BRICS : attempting to define the relationship between the BRICS through the complex interdependence theory

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Interdependence and the BRICS

Attempting to define the relationship between the BRICS through the complex interdependence theory

Arthur van Seggelen 6168981

Sarah Hardus

Bachelor Thesis Politicologie: Emergence of the BRICS: From North-‐ South tot South-‐ South Relations.

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Introduction

Brazil, Russia, India, China and South Africa have formed a group of nations that appear to have left certain international relations scholars slightly unsure what to term them, and what to consider of them in general. The BRICS, a term coined in 2003 by the investment-‐banking firm Goldman Sachs is to some a major new player in World Politics. Their strong economic growth has led to suggestions that the BRICS will reach the level of the G6 in the coming decades. This has led scholars to believe that the BRICS could develop into a possible counter-‐pole to the West. But is this coalition as powerful as certain scholars and analyst suggest, and do the BRICS have the ambition to become such a powerful and cohesive coalition? When looking at what the BRICS have achieved since they began planning regular summits, it could be suggested that the leaders of these five nations feel that cooperation is good when the benefits are clear, but these leaders also appear to be very hesitant to assume any of the costs and the risks that are also associated with such a partnership. “Still, this emerging common and convergent approach is not free from the differing country characteristics between the members and their strong seeded desire to keep their sovereignty and non-‐interventionist disposition” (Kirton, Bracht, 2013; 12). Therefore this paper will look at the nature of the relationship between the BRICS using the theory of complex interdependence. The central question of this paper will therefore be;

can the relationship between the BRICS be considered a complex interdependent one?

In order to answer this question, the relationship between the BRICS will be analysed using the three characteristics of complex interdependence as suggested by Robert Keohane and Joseph Nye. These three characteristics have led to this paper questioning if there is a strong interconnectedness between the BRICS when it comes to agreeing on and carrying out certain political decisions. Secondly, the level of trade between the BRICS will be analysed, as well as focussing on the level of foreign direct investment between the BRICS. Politically, the BRICS have proven to work quite well together in order to achieve certain agreements in international politics, agreements that have in the past proven difficult to accomplish for non-‐western coalitions. Therefore this paper will look at the nature of the relationship between the BRICS within the United Nations. And examine if the BRICS cooperate with each other in this respect. Finally, the military ties will be analysed between the BRICS. This final aspect is in the opinion of this paper less relevant in a societal sense, as the BRICS have never proclaimed to want a military cooperation. But the scientific relevance is of importance, as it is seen in literature concerning complex interdependence, “survival remains the primary goal for states, and in the worst situations, force is ultimately necessary to guarantee survival. Thus military force is always a central component in national power” (Keohane and Nye, 1977; 27).

The paramount reason why this paper feels that these questions need to be answered, is that the BRICS as a group of countries, have appeared to go through a rollercoaster ride of definitions and it remains unclear what form of cooperation the BRICS have, and if the BRICS even truly want such cooperation. There have been numerous

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studies1_{that
have
examined
the
role
of
the
BRICS
in
the
international
arena,
and
how
they} could form a new pole in respect to the West. But if the cohesion of the bonds between the BRICS is weak, and there are no true channels that connect these five nations, than it could be proven that the BRICS have been grouped due to the “simplicity of an acronym” (Sharma, 2012; 5). A thorough look at the relationship using the theoretical framework as suggested by Keohane and Nye, that has been used in the last few decades with great success and can hopefully shed some light on this relationship, and therefore allow this paper to draw certain conclusions that are both relevant in a societal manner, as well as a scientific manner.

This paper will begin with a synopsis of the history of the BRICS including a short comparison laying out the similarities and differences. The third section of this paper will consist of the theoretical framework. Neoliberal institutionalism will be explained. Stemming out of this explanation of neoliberal institutionalism, the three characteristics of complex interdependence as described by Keohane and Nye will be laid out. The theoretical framework will be concluded with a specification of the methodology that will be used. The third section will consist of an analysis of the BRICS. Firstly the multiple channels that exist between the BRICS will be assessed starting with the political channels, followed by economic and finally concluded with the military differences and similarities. The lack of hierarchy and absence of military force will be explained thereafter. The final section of this paper will be a conclusion of the findings.

Historical analysis

The BRICS are the product of a globalized economy, and have profited from the open economy that the liberal West has been promoting for decades. The economic aspect of the BRICS is an important one, but there have been numerous examples of the role that the BRICS can play in the international order as a political entity. The IBSA, a coalition of India, Brazil and South Africa, politically preceded the BRICS. IBSA was created to engage the G8 in a dialogue in a discussion about the Iraq war, and World Trade Organisation (WTO) multilateral negotiations (Laidi, 2012; 617). Both Brazil and India felt that they had been left out of international negotiations in the past, and due to a lack of substantial power in the United Nations (UN), attempted to assume more power using alternative paths. “The three countries portrayed themselves as multi-‐ethnic, multicultural and democratic emerging powers” (Carpenter, 2009; 4) which were promoting a more democratic international order. Parallel to these developments, the BRICS were also engaging in dialogue over certain issues such as development and trade. These ideologies overlapped at a certain moment, and a new alliance was formed that would “incorporate the regional hegemons to pool their strength in the various multilateral negotiating forums” (Beri, 2008). At the 2003 WTO summit in Cancun, the BRICS alliance would make its first move as a new political player.

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India, China and Brazil, led a coalition of developing nations to scuttle the American and European prepared Doha round agreement (Laidi, 2012; 617). The three BRICS nations did not necessarily have the same agenda going into these discussions, but they all would enjoy relative gains from dismounting the Euro-‐ American dominance that had been apparent at these meetings in the past. “It is suggested that the WTO has become much more democratic, and the Europeans and Americans are evidently no longer the only key players” (Laidi, 2012; 618) during international negotiations.

The traditional coalition building that formed IBSA and the inclusion of China and Russia to the BRICS has created a group of nations that include two permanent members of the UN Security Council, three nuclear powers, two-‐ non democratic powers and five regional powerhouses. These characteristics together, including their shared commitment to creating an equal international order could prove to upset the current status quo. On the other hand these characteristics could also have a conflicting effect on the alliance. With the inclusion of Russia and China, the BRICS “have proven to be difficult to institutionalize in comparison with IBSA, precisely because the formers ability to develop a common agenda, has been, and continues to be, more difficult” (Laidi, 2012; 618). A power struggle or differing opinions about other issues may prove to be a challenge in the future for this coalition. Therefore it is important to examine how the relationship between the BRICS can be assessed.

Granted that the BRICS appeared to be a powerful upcoming entity in the international order, a number of cracks have appeared in the structure of this coalition. The foremost problem with the BRICS is that they are not an obvious set of nations. Although the economies of the five nations are quite similar in the sense that they experienced exceptional growth in a time where other economies, mainly in the West were struggling, they differentiate from one another in certain aspects, such as energy consumption, income equality and manufacturing capabilities. The internal politics are also in certain aspects different of each other. One of the few characteristics that the BRICS have in common is that they are federal states. Brazil, India and South Africa differ greatly from China and Russia, as the former are well-‐institutionalized democracies and the latter being either authoritarian (China) or in the case of Russia, an illiberal democracy moving towards authoritarianism. Culturally and linguistically the five nations embody distinct traditions. One factor, which does join these five nations, is the fact that they do not associate themselves with the industrial West. With that in mind, all five economies are developing strong capitalist roots and growing links with the world economy (Armijo, 2007: 8).

Another aspect that the BRICS show a contrast in is the surplus/ deficit to GDP ratio. China and Russia display a positive ratio of 2.8 and 5.3 respectively, while Brazil (-‐2.1), India (-‐3.3) and South Africa (-‐3.4) have a negative ratio (BRICS (b), 2013). The trend that Russia and China are different to the other three nations is not apparent in all economic indications. When looking at the percentage of external debt to GDP, Brazil and China are considerably

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lower than South Africa and Russia (BRICS (b), 2013; 173). As China appears to be ahead of the BRICS in a number of economic aspects, South Africa would have to be classified as the bona fide underdog. On almost all aspects, South Africa is struggling to keep ground on the other four BRICS. The fact that South Africa was added on such a late stadium of the development of this association brings into questions what the motives are of this coalition. In the same sense that China could become a threat to the BRICS in the future, as the other nations struggle to keep up with its economic developments, South Africa could also form an anchor that could weigh forthcoming developments within the BRICS.

Therefore, when looking at the BRICS, there are more economic aspects that differentiate these countries. South Africa and China are so dissimilar, that cooperation seems unlikely and challenging. Looking at their political and economic structure, it would be more sensible to group Brazil with other South and Latin American countries, such as Mexico and Argentina. India may be better off in a pact with Bangladesh and Indonesia while South Africa would fit better with slightly less developed countries, such as Nigeria and Botswana. This observation only further suggests that the BRICS as a group may be forced. But such a conclusion may have also been taken with too much haste. In international relations theory, such coalitions may be justified based on empirical and normative findings. Conclusions made from such research may shed further light on the existence of the BRICS, as well as helping future researchers to analyse the BRICS using an international relations theory that best describes this coalition.

Theoretical Framework

In order to properly explain the complex interdependence theory, and how it can be used to analyse the BRICS, the neoliberal institutionalism paradigm will first be explained. Hereafter, a closer look at the complex interdependence theory as suggested by Robert Keohane and Joseph Nye (1977) will be explained.

Neoliberal Institutionalism

Neoliberal institutionalism merged as a new paradigm in international relations in

the mid-‐1970, discussed by Keohane and Nye, this paradigm was seen as a competitor to realism as well as neorealism. Milner explains that there are four elements that differentiate the neoliberal paradigm from others. These four elements are the “emphasis on non state actors including international institutions, the forms of power besides military force and threats, the role of interdependence in addition to anarchy in the international system, and on the importance of cooperation as well as conflict in international politics” (2009; 5). These four elements will be briefly explained:

Neoliberal institutionalists acknowledge a wide range of international actors, including multinational corporations and nongovernmental organisations. But a particular focus is placed on international institutions and regimes. The traditional liberal view was heavily based on international organisations, but the neoliberal view goes further and takes

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a broader “view of these actors and includes sets of governing arrangements that involve implicit or explicit principles, norms, rules and decision making procedures around which actors’ expectations converge” (Krasner, 1983; 186). As this paradigm has further developed, scholars have begun to “look at the conditions under which world politics is institutionalised” (Milner, 2009; 7). Keohane (1984) argued that countries, as rational actors, would join international institutions on the condition that these institutions can provide net benefits for the country, relative to the outcome if no agreement is made to join the institution. Examples of such benefits are reduced transaction costs, increased information flows, and more certainty for members of the institution.

The second element suggested by Milner is the varieties of power in World Politics. Within neoliberal institutionalism there exists the recognition of the independent logic that operates within different issues, much work in this paradigm has emphasized the importance of, and variation across, issue areas2_{.
Power
resources
differ
when
in
respect
of} the issue area that is being dealt with. Negotiations concerning environmental protection will require different power resources than negotiations on trade deals, or nuclear proliferation. This is in contrast to the neorealist paradigm, which focuses on military force as the key element of national power (Milner, 2009; 12). Neoliberal institutionalists argue that there is no single hierarchy of power; certain states will be more powerful when negotiating one issue, while being less powerful when negotiating another issue. Therefore it is of importance that states be analysed based on their position relating to a certain issue, instead of the states position as a whole in world politics.

The third characteristic of neoliberal institutionalism is the focus on cooperation between states, in contrast to the realist and neorealist focus on conflict. Since World War II, there have been a number of examples that illustrate increased cooperation between states, namely: the European Union, the World Trade Organisation and a number of peacekeeping operations. “A distinctive point about the evolution of neoliberal institutionalism has been the move from cooperation to institutionalised cooperation, or global governance. Neoliberal institutionalists have tried to explain institutionalised cooperation, that being sustained policy coordination among states often guided by norms, rules and practices codified in treaties, agreements, or international organisations” (Milner, 2009; 19).

Interdependence as a defining feature of the international system is the fourth characteristic of neoliberal institutionalism as suggested by Milner. Neoliberal institutionalism describes the international system as one embodying both anarchy and interdependence. The international system is a system that is “decentralised and often relies on self-‐enforcing behaviour, but where hierarchy does not dominate the system” (Milner, 2009; 15). Interdependence does not necessarily mean symmetric interdependence, as certain countries will remain more powerful in a military and economic sense. Interdependence generally relies on the fact that a country will more likely work together

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with another country due to the fact that a breakdown of relations would make a country more vulnerable. Complex interdependence, as suggested by Keohane and Nye, is more than just economic interdependence. Keohane and Nye define complex interdependence using three features, namely: relations involving multiple channels; the agenda of relationships among countries includes multiple issues without hierarchy and finally that military force is not a primary instrument that could be used to resolve disagreements. Complex interdependence will be further explained in the next section of this paper.

Complex interdependence

At the end of the Cold War, certain international relations scholars began to distance themselves from the traditional realist approaches to world politics. The world was changing as “old international patterns were crumbling; old slogans are unrestrictive; old solutions unavailing. The world has become interdependent in economics, in communications, in human aspirations” (Kissinger, 1975; 1). The new era of interdependence, it is argued, was brought on by a number of factors. The modernist school argues that through improved communications and more efficient travel possibilities, a global village had been created, allowing people of all walks of life to communicate, and witness different cultures and traditions. Trade had become easier, and more accessible to peoples of the world. Traditionalist realists on the other hand did not follow this line of thought, rather arguing that social and economic interdependence are a result of military interdependence, which has always played an important role in international politics. In light of these developments in world politics, Robert Keohane and Joseph Nye set out to create a theoretical framework in order to explain the “tapestry of diverse relationships” (Keohane and Nye, 1977; 4) that is world politics. This theoretical framework is meant as an ideal type. This paper will attempt to use this framework in order to explain the relationship between the BRICS.

The BRICS are an example of a coalition of nation states that appear to strive to cooperate with each other in the international system when certain issues are negotiated, but the question does still arise if the BRICS truly do want to form a relationship that is interdependent. In order to answer this question, this paper will now look at the three main characteristics of complex interdependence as suggested by Keohane and Nye.

The first of the three characteristics that will be explained is the presence of multiple channels that link states. These channels can consists of “ informal ties between governmental elites as well as formal foreign office arrangements; informal ties among nongovernmental elites; and transnational organisations” (Keohane and Nye, 1977; 24). The level of connectedness of formal government agencies, as well as informal actors such as transnational banks, and firms play an important role, as these actors are affected by domestic as well as foreign policy, they make government policies in each other’s countries more sensitive to one another. Corporations, banks and trade unions can make decisions that transcend national borders; the domestic policies of different countries impinge on one another more and more.

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The second characteristic of complex interdependence is the absence of hierarchy among issues between states. When Keohane and Nye formulated this theory, the roots of this characteristic came from the change in importance of military power in relations between states. “The absence of hierarchy among issues means, among other things, that military security does not consistently dominate the agenda” (Keohane and Nye, 1977; 25). In the case of the BRICS, this characteristic would be better suited as describing the difference in domestic policy and foreign policy. In order for there to be a complex interdependent relationship between states, “the distinction between domestic and foreign issues become blurred, or as it is adequately stated in Power and Interdependence; politics does not stop at the waters’ edge” (Keohane and Nye, 1977; 25).

In a relationship that is interdependent, the use of force as an instrument during negotiations is often too uncertain, and the costs often greatly outweigh the benefits. “Force is often not an appropriate way of achieving certain political and economic goals” (Keohane and Nye, 1977; 28). By not forgetting that the neoliberal institutional paradigm still views the international system as an anarchic one, it would be incorrect to completely rule out military force as an instrument during negotiations as the security dilemma of a state will always remain. But the difference with complex interdependence is that in a pluralist state, the use of force is seen as a last resort once negotiations have broken down.

Schematic diagram of theoretical framework

Neoliberal Institutionalism Non-‐State Actors Forms of Power Interdepe ndence Cooperati on Multiple Channels Absence of Force Lack of Hierarchy Military Economic Political

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Methodology

Multiple Channels

In order to assess the relationship between the BRICS using the complex interdependence theory, channels in which the BRICS are connected will be looked at. The channels that this paper will look at are split up in economic, political and military. The two economic channels that will be analysed are trade and foreign direct investment. Trade will be calculated as percentage of import and export by main destination and main origin. Foreign Direct Investment will be calculated by looking at which countries are the main recipients of FDI from the BRICS nations.

Two channels have also been chosen to measure the degree of connectedness between the BRICS in a political sense the manner in which the issue of the BRICS development bank was handled during the 5th BRICS summit and the relationship between the BRICS with the United Nations. Firstly, a close analysis of the 5th BRICS summit will be done. This analysis will focus particularly on the agreements that have been made relating to the BRICS development bank. The joint statements of the BRICS leaders as well as speeches of the individual leaders will be assessed. Local as well as international media coverage of the Summit will also be used in order to assess the opinion of the developments of the Summit. The second political channel that will be looked at is the relation between the BRICS within the United Nations. This analysis will be done by looking at existing literature concerning these relations and in particular the relations with respect to the United Nations Security Council.

In order to investigate the similarities between the BRICS in a military aspect, an analysis will done on the strategies of the BRICS, and how that can translate into foreign policy. Similar military strategies, even when military force is not used on another, can illustrate the position that a nation has in the international system and if military alliances would ever be conceivable in the future.

Lack of Hierarchy

As stated in the theoretical framework, military force does not appear in any of the documentation that describes the mission of the BRICS. Therefore it would be unlikely that this would dominate the agenda of the BRICS. Therefore this paper will examine if there is a lack of hierarchy within the agenda by looking at the influence of domestic politics on the outcomes of agreements and see if domestic politics influences channels and interconnectedness between the BRICS.

Absence of Force

In order to assess if there is an absence of force between the BRICS, the focus will be put on the likeliness that military force will be used against each other. Geographic proximity, or military strategic aspects will be taken into account. The cost-‐ benefit aspect of the use of military force, in the context of world politics will also be analysed.

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Analysis

Multiple Channels

BRICS Development Bank:

When examining channels in which the BRICS can cooperate, the first would naturally be the five BRICS summits that have been held since 2009. These high level meetings have created a forum in which the leaders of the BRICS can discuss policies and agreements that have an influence on the developing world as well as the domestic policies of the BRICS themselves. Preceding the 5th_{BRICS
summit,
many
analysts
were
optimistic} that a clear and thorough blueprint would be set up to create the BRICS development bank (Kirton, Bracht, 2013). The idea was that a new South-‐ South Development Bank would offer an alternative to the IMF and the World Bank. It would also create a tangible institution, which would have a head office and a clear mandate. This would be a first for the BRICS, and therefore would illustrate a clear development as a coalition. (Kirton, Bracht, 2013; 2)

During the 2013 summit in Durban, an agreement was made to consider the creation of a development bank. This would be the first truly institutionalised institution that would connect the BRICS together. At the close of the summit, there was still a considerable amount of uncertainty as to what this bank would represent. In their joint statement, the BRICS leaders stated that they "had agreed to establish the New Development Bank" (5th BRICS summit, 2013). The certainty of this statement was brought into doubt when the President of South Africa, Jacob Zuma stated that the leaders had decided, “to enter formal negotiations to establish a BRICS-‐led new development Bank” (Zuma, 2013). This sense of cautiousness from President Zuma illustrates South Africa’s position in such an institution. South Africa would struggle to finance its seed capital for the bank, as the amount expected is considerable3_{for
a
state
such
as
South
Africa.
Analysts
also
believe
that
China
could
play
a} dominating role in such a bank; this privilege can be accounted to the fact that China will most probably be the biggest shareholder in the bank, as well as the Yuan being the principle currency (Coleman, 2013). This is an example that the large differences between the BRICS could lead to instances that there is hierarchy within the BRICS. This would not prove positive for interdependence between the nations.

This agreement, along with an agreement to set up a contingent reserve arrangement (CRA) were made during the Durban summit but the BRICS still did not manage to set up any form of timeline, and key features were not described of both the development bank as well as the CRA. Certain analysts felt that “in all the summit was a productive performance. It was also a promising one for the future, if the process mandated for the BRICS development bank and financial safety net can be brought to a big, successful end soon” (Kirton et al; 2013). When looking at the agreement, this paper cannot agree with this analysis. Local media reports from the BRICS as well as other international media outlets

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have shed a more negative light on this agreement, claiming that it merely mimics’ the World Bank and the IMF (Forbes, 2013).

United Nations

Within the BRICS, there appears to be a cleavage between Russia and China, both permanent members of the United Nations Security Council (UNSC) and Brazil, India and to a lesser extent South Africa. All five of the BRICS are strong supporters of the UN, and strongly believe that the UN charter should be upheld. They all fight for the further democratization of the UN, and believe that Southern states should get more say in the organisation. But ultimately, within the UNSC, both China and Russia are adamant to not allow extra permanent members to join the current five, therefore ignoring the wishes of Brazil and India. Brazil has adjusted its foreign policy significantly to not only gain support from the developing world, but has also recently “in multilateral forums such as the UN Human Rights Commission, made a dramatic shift towards China, having voted for a non-‐ action motion in 2004 that stopped voting for the resolution on China” (Barbosa, Mendes, 2006; 7). Such a dramatic shift can be attributed to the fact that Brazil is trying to charm China to open a dialogue for possible inclusion into the UNSC. This has proven to be controversial, receiving criticism domestically. “This criticism is based on the perceived lack of results from Brazil’s new positioning. The government is being challenged mostly for having counted on China’s support of one of the current administration’s main foreign policy objectives, which is to become a permanent member of the UNSC. China’s position against new entries to the UNSC is seen as major evidence of non-‐reciprocity in the relations between both countries, even though China’s objective was to keep Japan from entering that body rather than to veto Brazilian aspirations” (Barbosa, Mendes, 2006; 7).

Trade

Trade between the BRICS can also be a factor that contributes to the channels that connects societies. When looking at the trade profiles of the five BRICS countries as of 2013, the only country that predominantly features in both main destination as well as main origin of trade is China. The European Union and the United States remain the most important trading partners for all the BRICS (See table 1). As this may be expected, it would also be expected that other BRICS nations would be important partners in countries total imports and exports. When specifically looking at the per cent of total exports and imports that the BRICS share between each other, it is once again apparent that China is the only nation that has seen a considerable increase in imports and exports between other BRICS since 2000. “China’s relative participation in the others four BRICS trade has increased three to five times over the last decade” (Pedreira do Couto Ferraz, 2012). It would appear that trade between the other four BRICS is a small part of their total trade, and that there have not been many substantial changes since the BRICS have started working together.

When looking at table 1 it is clear to see that intra-‐ BRICS trade is not the dominant forms of trade. If a country has strong trade channels with another country,

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interdependence will be created, as the risk of losing such a trade partner will have serious effects on both the countries economies. Therefore the costs of a conflict greatly outweigh the benefits, thus forcing the countries to negotiate a solution in a peaceful way. It could be argued that the European Union and the United States continue to be more powerful in this sense and in the respect of trade, the BRICS are not as interconnected as one may think.

Table 1:Breakdown in economy’s total exports and imports in percentage (WTO, 2013) Brazil By Main Destination By Main Origin E.U _20.7 E.U _20.5 China _17.3 U.S.A _15.1 U.S.A _10.1 China _14.5 Argentina _8.9 Argentina _7.5 Japan _3.7 Korea, Republic of 4.5 Russia By Main Destination By Main Origin E.U _44.4 E.U _40.3 China _6.7 U.S.A _15.7 Belarus _4.8 China _6.5 Ukraine _3.5 Argentina _4.9 U.S.A ₃ Korea, Republic of 4.7 India By Main Destination By Main Origin E.U _18.1 China ₁₂ U.A.E _12.4 E.U. _11.9 U.S.A _10.9 U.A.E _7.7 China _5.2 Switzerland _6.8

Singapore _5.2 Saudi Arabia _6.1

China By Main Destination By Main Origin E.U _18.8 E.U _12.1 U.S.A _17.1 Japan _11.2

Hong Kong _14.1 Korea,

republic of 9.3 Japan _7.8 Taipei _7.2 Korea, Republic of 4.4 U.S.A _7.1

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South Africa By Main Destination By Main Origin E.U _22.3 E.U. _30.6 China _13.4 China _14.2 U.S.A ₉ U.S.A ₈ Japan _8.2 Japan _4.7

India _3.6 Saudi Arabia _4.5

Foreign Direct Investment

The BRICS have as a group proven to be a considerable contributor to foreign direct invest (FDI) in the developing world, corresponding to 61% of the total outflows of developing countries, and 3% of the global outflow (Gammeltoft, 2008; 1). High amounts of FDI between transnational companies can have a positive effect on the level of interdependence between nations. In the case of the BRICS, it is interesting to note that the outward foreign direct investments (OFDI) from the BRICS are destined for other countries, outside of the BRICS grouping. Recipients of outflow of investment generally are regional neighbours in the case of Brazil, Russia, India and South Africa. China’s main recipients are the U.S.A, Japan, Australia and Germany.

The sectors in which the BRICS direct their investment can also indicate shared interests. The BRICS, with an exception of India, invest in the research extraction sector. If companies that invest in this sector choose to form partnerships, this would considerably improve the interconnectedness of these nations.

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Summary of outward FDI from BRICS (Gammeltoft, 2008; 13)

Military Capabilities and strategic position of the BRICS

The BRICS have never mentioned a military role in their relationship. In the joint statements provided after summits, it has been clear that political and economic cooperation have been the dominant goals. But this paper is examining the interdependence between the BRICS; similar foreign policies in the context of military force may form a basis of interdependence. Military strengths and strategies often illustrate the foreign policies that governments have. As mentioned in the theoretical framework, neoliberal institutionalists look at the varieties of power in world politics. Economic and political power have been discussed above, therefore it is also necessary to also discuss military power.

This analysis will focus on the military strategies of the BRICS, and not on the possibility of a military attack on one other. Due to the fact that the BRICS do not share a geographical proximity, such an attack is extremely unlikely. Any true channels between the BRICS in a military aspect are also not apparent, but in this analysis we are looking at the system of the BRICS, and “crucial features of any system is the distribution of material power” (Hurrell, 2006; 5).

Brazil and South Africa have smaller militaries than Russia and China. Their paths and military strategies are also different to the former two. Brazil had for a number of years no real incentive to build a large military. “The restoration of democracy in the mid-‐1980’s, the

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end of the Cold War, and the absence of immediate conventional threats to its security from within the region brought about an acute questioning of the raison d'être of its armed forces and provided no incentives for defence spending” (Flemes, 2011; 12). Since the mid 90’s, Brazil has attempted to enhance its international profile and engage in regional and global security affairs. “The aim for Brazil is to become a more influential actor in the process of building global governance in core realms like politics, economics and security (Flemes, 2011; 13-‐14). The goal of Brazil would not be to become a regional power in a military sense, but instead hold enough influence in the region to act as a stabilizing factor between other countries in the region. This is an attribute that Brazil shares with South Africa.

Prevention, management and resolution of conflicts and peace operations in particular have become issues at the forefront of South Africa’s security agenda (Flemes, 2011; 15). An essential part of South Africa’s security strategy is to control and prevent spillovers of domestic conflicts in Africa. The South African military has played a vital role in controlling and pacifying intrastate conflicts throughout the African continent, often sending thousands of troops to aid in military operations outside of its border. Military options are often not the first path that the South African government choses, South Africa attempts to resolve conflicts through diplomatic channels and through negotiations. It favours early warning, consent and diplomatic negotiation mechanisms over conventional capabilities to establish a cease-‐fire and monitor the enforcement of peace agreements (Shelton, 2006: 147). This is reflected by the South African military expenditure, which equals 1.5% of the national GDP; this is a relatively low percentage (SIPRI, 2012).

While China and Russia appear to be in a path towards becoming military powers in a global sense, Brazil and South Africa have set out to use their influence in a more regional setting. India does not fit in either of these descriptions. ”India faces a regional security environment marked by the existence of long-‐standing rivalries associated with ethnic, religious and political grievances” (Flemes, 2011; 18). Due to its geographic location, between a numerous nuclear powers, and being an important strategic ally to the United States, India can use its foreign policy in an important strategic way. As India is in the shadow of these superpowers and (unstable) nuclear powers, and is self a nuclear power, India’s strategy and incentives are different to South Africa and Brazil. In its direct geographic context, India acts like a hegemon using its nuclear deterrence against Pakistan and sustaining a powerful conventional arms build-‐up. In a wider Asian context, India does not quite measure up to the military capabilities of China and Japan. This leaves India in a position in which it has to balance raw power and strategic diplomacy with both China, but also Russia and the United States.

Lack of Hierarchy

The second characteristic of complex interdependence is the lack of hierarchy within the agendas of the nations involved. As mentioned above, the BRICS share very few channels in which cooperation is considerable. This is also apparent when looking at the line

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between domestic and international politics. It appears that there is a clear trend, especially when looking at China, that domestic interests play a more important role than the interests of the BRICS. Certain overarching interests, such as a more democratic international order, are a convenient topic for the BRICS to join forces, but when looking at smaller, more intricate interests, foreign policy is still fuelled by domestic politics and self-‐interest. As mentioned in the examples above, it does appear that all the BRICS are acting to further their own position in the international system, their continued ties with the European Union and the United Sates shows that the BRICS are still cautious to isolate themselves from the West. The differences between Russia and China on the one side, and Brazil, India and South Africa are once again here apparent. In Russia’s case, “it’s foreign policy is designed to limit further losses and to sustain or promote conditions that-‐ in the longer term-‐ will permit Russia to re-‐emerge as a great power in a pluralist international system” (Macfarlane, 2006; 57).

Absence of Military Force

The final characteristic of complex interdependence is that there is a lack of military force as instrument of negotiations. In the research that was done for this paper, there is no evidence to suggest that the threat of military force has been used during any negotiations. In a nuclear age, this is not necessarily surprising, as the threat and use of military force in general between sovereign states is less frequent. Once again, to come back to the lack of substantial channels between the BRICS, it would be surprising if even in the future, such a threat would exist between the BRICS. It would appear that the costs involved in threatening another BRICS would be considerably higher than the rewards seeing as the international community as a whole does have close ties in the form of trade and FDI with all five BRICS. Even with this in mind, it must not be forgotten “that military power dominates economic power in the sense that economic means alone are likely to be ineffective against serious use of military force. Thus, even effective manipulation of asymmetrical interdependence within a non-‐military area can create risks of military counteraction” (Keohane and Nye, 1977; 16).

It would be incorrect to claim that the BRICS have a complex interdependent relationship, and by looking at the above data, it would also be incorrect to assume that the relationship is even slightly interdependent. Trade flows still predominantly go through the European Union and the United States. The BRICS are major contributors to FDI from the developing world, but in spite of this FDI is still dominantly targeted at states within a countries region. Domestic policies in the BRICS have not appeared to mirror the foreign policies; there remains an obvious gap between domestic interests and international interests.

Interdependence and the BRICS : attempting to define the relationship between the BRICS through the complex interdependence theory