The rise of BRICs and resource implications of superpower growth

1
The rise of BRICs and resource implications of
superpower growth

• Geographical Superpowers

2
Superpower Geographies3. Implications of the
continued rise of the superpowers? a)
Resource implications of continued growth of
superpowers b) Implications of shifting power
for older core regions b) rise of emerging
powers and the implications for the world c)
Tensions between cultures

• Learning Objectives
• Understand the importance of the rise of BRICs
• Understand the implications that growth of
  superpowers have in terms of energy, water and
  land
• Identify the implications that shifting power has
  for older core regions

3
Global power shift
Atlanticist geography (old) 60 of global GDP but
only 18 of the worlds population

• Superpower geography does not remain static.
• Likely future scenario is that the centre of
  gravity of global power continues to shift east
  towards Asia.
• The maps illustrate old and new global views of
  the world

Pacific geography (new) 52 of global GDP but 50
of the worlds population
4
4.1. 4. Current trends in rising superpowers
5
(No Transcript)
6
The BRICs and emerging powers

• The BRICs (Brazil, Russia, India and China) are
  the emerging super powers
• Mexico and the Gulf States could lay claim to be
  in this group also
• This group of countries is very different, with
  perhaps only China capable of challenging the USA
  in the near future.

China Communist one-party state which has become the workshop of the world rapid economic growth based on manufacturing and trade significant military and demographic power
Russia Russia is what is left of the USSR it has a huge nuclear weapons arsenal, and vast oil and gas reserves making it globally important. It has an ageing, unhealthy population and weak economy.
India A huge, and very youthful, population give India enormous potential for growth. It has some world class industry such as IT, but very poor infrastructure and 100s millions of very poor people
Brazil Increasingly influential in Latin America, with a strong, diversified economy and growing middle class. It tends to punch below its weight internationally. It is sometimes referred to as an agricultural superpower.
Mexico An influential country with strong ties to the USA Mexicos economy is often shaky and it has problems with crime and corruption.
Gulf States Increasingly important in terms of remaining global oil and gas reserves has attempted to diversify and become a hub between Europe and Asia, with some success.
7

• The BRICs (Brazil, Russia, China and India) are
  likely to become more powerful
• will not happen overnight
• USA (and EU) are not in imminent danger of being
  relegated to historical geography.

8
Emerging superpowers

• Rise of the BRICS is related to a number of
  geographic factors
• Size of countries- Russia 1st, China 3rd, Brazil
  5th and India 7th
• Population China 1st, India 2nd, Brazil 5th,
  Russia 8th.
• Resources . See next slide

9
Emerging Superpowers
Russia large quantities of oil and gas
India / China Large amounts of coal
But China doesnt have vast supply of resources
given its population size and area (see Pearson
page 97-98 China and Africa)
Brazil gold, diamonds, iron ore and rainforest
10
Emerging powers whos who?
HDI 0.772 0.817 0.612 0.813
GNI per capita US PPP 6710 18 390 3 230 10 260
Broadband internet users ( pop) 5.0 3.4 0.6 5.2
Unemployment rate () 4.1 9.2 10.7 7.3
GDP from agriculture () 10.6 4.7 17.0 6.1
Population growth rate () 0.7 -0.5 1.4 1.2
(2009 data)
China
Russia
India
Brazil
11
Copy this map of rising powers and also sketch
fig. 4.1 on handout
12
SWOTing the BRICs
13
SWOTing the BRICs
14
SWOTing the BRICs
15
SWOTing the BRICs
16
Very different BRICs
BRIC Future based on.. Challenges Per capita GDP (PPP), 2009
Brazil Farm exports, hi-tech industry, biofuels Probably has the most potential for smooth growth but only recently become politically and economically stable. It may not last. 10,500
Russia Energy exports Limited manufacturing sector. Political tensions within Russia and at its borders. An ageing, unhealthy population and decaying infrastructure. 15,000
India Hi-tech industry, outsourcing , manufacturing. Youthful, potentially innovative population. Very poor infrastructure requiring huge investment e.g. roads and energy Huge levels of poverty in rural areas and low levels of education in many areas. Potential water and even food shortages. 2,900
China Manufacturing as the workshop to the world own TNCs Ageing population as a result of the one-child policy. Insatiable demand for resources e.g. oil which may become very costly. Environmental pollution. Internal tensions e.g. demands for democracy. 6,550
17
(No Transcript)
18
Current trends in rising superpowers
19
MULTI-POLAR future?

• USA / EU wane, BRIC power grows.
• regional spheres of influence

• Broad arc stretching from Turkey eastwards to
  Indo-China region of
• Unresolved territorial disputes
• 6 nuclear powers (China, Russia, India, Pakistan,
  Israel, NATO)
• Numerous recent conflicts
• Religious conflict
• Rogue and troubled states
• At least 60 of the worlds remaining oil and gas
  

20
MULTI-POLAR the inter-war yearsWarning from
history?

• fragmented world
• multi-polar world
• interwar years in the 1920s and 1930s.

21
What is the current balance between emerging
superpowers?
22
Different perceptions Beijing 2008 and Delhi 2010
23
Enter the Dragon Chinas global ambitions and
significance

• China undoubtedly has global ambitions
• Since around 2005 it has moved from a focus on
  its own internal economic growth to a more global
  strategy

24
Chinese TNCs

• Phenomenal growth.
• 40 Chinese TNCs in the Forbes Global 2000 list in
  2003, 160 by 2010
• Most Chinese TNCs are not global brands
• A few beginning to be known worldwide such as
  Lenovo (PCs), China Mobile and Air China.
• Internal market in China is so huge Chinese
  companies do not need to expand abroad, yet.

25
Changing superpowers
Shifting patterns of power.
Top 10 TNCs by market capitalization (share value) Top 10 TNCs by market capitalization (share value) Top 10 TNCs by market capitalization (share value) Top 10 TNCs by market capitalization (share value)
2000 2000 2010 2010
USA Microsoft USA Exxon Mobil
USA General Electric China PetroChina
Japan NTT DoCoMo USA Apple Inc.
USA Cisco Systems Brazil Petrobras
USA Wal-Mart China Industrial Comm Bank of China
USA Intel Corporation USA Microsoft
Japan Nippon Telegraph Telephone China China Mobile
USA Exxon Mobil USA Berkshire Hathaway
USA Lucent Technologies China China Construction Bank
Germany Deutsche Telekom UK/Aust BHP Billiton
26
Cumulative causation / multiplier effect

• Useful for explaining growth of China
• Free Trade Zones / EPZs attract industry, which
  subsequently attracts linked industries.

1. How does this work?
2. Does it connect to world systems theory?

27
China spreads its wings

• China has increased its foreign aid budget to
  over 2 billion / yr
• China has invested heavily in roads, rail,
  pipeline and ports in Africa often via state
  owned Chinese companies and using Chinese labour.
• China has ramped up imports of African oil,
  minerals and ores as well as investing in
  farming and industry in Africa.
• Chinese companies have purchased / leased large
  amounts of land in Africa even in countries
  which are considered food insecure.

28
China in Africa

• Increased flow of FDI into Africa,
• Especially sub-Saharan Africa.
• Focussed on oil rich and mineral rich countries
• Importing Chinese workers to build key
  infrastructure such as ports, roads and rail to
  export raw materials.
• Neo-colonialism or desperately needed investment?
• China gives increasing amounts of aid to Africa,
  often targeted at key infrastructure projects.

29
Chinas Blue Water Navy

• Few blue water navies capable of deploying
  worldwide.
• Chinas navy currently coastal patrols inshore
  waters.
• Dependence on oil imports - wants to protect
  shipping routes using own forces
• Currently expanding nuclear powered attack
  submarine fleet and has plans to build aircraft
  carriers.
• Plan to have a navy capable of patrolling out
  into the Pacific to what it calls the Second
  Island Chain.

30
Goodbye G8, hello G20 and G2

• Marginalisation of the old G8 group of OECD
  countries
• Rise of the much broader G20 which includes
  China, India and Brazil.
• Some commentators have begun to talk of the G2
  the group of China and the USA.

31
Chinas carbon emissions

• Chinas carbon dioxide emissions rose by 170
  2000-2010
• 7700 million tonnes by 2009.
• Larger than the USAs 5400 million tonnes.
• This means action on climate change, without
  including China, is increasingly pointless.

32

• How has China risen?
• Read the boxes on p161 Oxford to make a timeline
  detailing Chinas rise (Key moments).
• Produce a detailed mind map or table as below to
  show the effects of Chinas rise both positive
  and negative in terms of social, economic and
  environmental impacts

Positive impact Negative impact
Economic
Social
Environmental

• Read Oxford p158-163

33
The Tiger awakes

• India has a number of assets in favour
• huge population of potential consumers.
• youthful population, with no signs of ageing (as
  in China)
• Key hi-tech industries such as IT development and
  software, space research and nuclear research
• educated, English speaking workforce
• Innovative global companies such as Tata Motors,
  Wipro and Infosys

34

• The downsides for India are
• Creaking infrastructure which lacks investment
  makes transport costly and difficult.
• Bureaucracy and red tape - stifles innovation and
  setting up businesses
• Lack on its own resources, especially energy
  resources
• Poverty 80 of Indians live on less than 2 per
  day these people are a long way from becoming
  consumers

World Bank Ease of doing Business index, 2010 World Rank
Singapore 1
Hong Kong (China) 2
UK 4
USA 5
Saudi Arabia 11
South Korea 16
Germany 22
Mexico 35
China 79
Brazil 127
India 139
Chad 183
35
Forward together?

• China /India bilateral trade has grown from very
  small beginnings
• China wants Indias textiles, iron ore and some
  other products such as pharmaceuticals.
• India needs goods in the form of gadgets,
  electronics, farm equipment etc from China.
• Increasingly technology products made in China
  were actually designed and software engineered in
  India (Bangalore), and are serviced and supported
  in India.

36

• Mutually beneficial trade
• Sectors dont directly compete
• Internal market of 2.5 billion people!

37
Problems at home..

• However the future may not be smooth.
• Unexpected events happen.
• Few people predicted the rapid collapse of the
  USSR and the end of the Cold War in 1989-1991.
• The Asian BRICS all have potentially distracting
  and destabilising situations on their doorstep

38
Edging towards a multi-polar world..

• Recent economic and political events have nudged
  a multi-polar world a little closer

Chinas economic expansion in Africa Shows it has ambitions outside Asia The global recession 2007-2009 declining GDP in Europe and North America 6-8 growth in China and India
China buying American government debt making the USA reliant on Chinas cash pile (a result of its huge trade surplus). Chinas global profile raised by the 2008 Beijing Olympics the 2010 Shanghai Expo role in the Copenhagen climate talks.
39
China v India?
40
Improve Governance Weak institutions and intra-state squabbling contrast with Chinas centralised can do administration
Raise Basic Educational Achievement HE tends to be OK, but millions get the most basic, or no, education illiteracy is far too high - female literacy is barely 50
Increase Quality and Quantity of Universities 2.5 million graduates per year, but from just over 300 Universities serving a 1 billion population, which is growing and young.
Control Inflation Tends to be variable and frequently spikes at over 8, which undermines economic growth.
Reduce debt India still faces debts of over 70 of GDP which is too high
Liberalise Financial Markets India has been much slower than China to open up its markets to global trade, as has a small inefficient financial sector
Increase Trade With Neighbours Trade with the US is about 10 of Chinas trade with the US India only accounts for 2 of world trade.
Increase Agricultural Productivity 60 of employment but only 1 of economic growth if this sector does not modernise India faces a future crisis.
Improve Infrastructure Major stumbling block to future growth in rapidly urbanising country road, rail, port, energy and water infrastructure all poor.
Improve Environmental Quality Currently not a priority, and public awareness is very low but problems such as sewage and urban air quality are critical.
This is information about how India compares to
China Write a series of paragraphs explaining
which country is more likely to become the next
superpower and why.
41
Testing theories on Superpowers
Dependency World systems Modernisation
How far do real emerging superpowers actually fit
into each theory p 111 handout
42
India China
Modernisation
Dependency
World systems
How far do real emerging superpowers actually fit
into each theory
43
What is the current balance between emerging
superpowers? 1) Outline the key differences
between these two rising superpowers 2) How can
we apply modernisation theory to them? What stage
of Rostows model might they be? 3) Do any of the
two apply as a peripheral developing country
according to dependency theory? Explain. 4) Using
your knowledge of World Systems Theory, how can
the rise of China and India be explained?
44

• Homework
• To produce a presentation of your ideas about the
  nature of world super power in 50 years time
  using your knowledge of superpowers and the
  theories underpinning them.
• Key words which must be used
• Dependency theory
• Wallersteins World systems theory
• Rostows take off model of economic growth
• Pacific geography
• Cumulative causation
• Kondratiev waves
• Multi-polar
• North-south divide
• BRICs
• Core and periphery

45
Impacts on resources

• Economic development in last 20 years of BRICS
  newcomers and the expansion of EU to 27 nations,
  has raised a number of concerns
• Accelerating rise in demand for energy and other
  resources
• Impact on the environment from Global warming to
  localised river pollution
• Uneven distribution of the benefits of economic
  growth, with growing inequality between urban
  rich and rural poor.

46
Global implications the environment and
resources

• China imports 3 of its coal 20 of sea-borne
  world coal trade.
• China consumes 50 of the worlds cement
• China uses 30 of steel and 25 aluminum
• Adds 100GW electricity generating capacity per
  year
• Next 30 years, needs to build 1 large nuclear
  power plant every fortnight to meet demand
• Greenhouse gas emission increases from China by
  2030 will be equal to the increases from the rest
  of the industrialized world
• Indias emissions are likely to rise by 70-80
  over the same period.
• If the Chinese consumed paper at the same per
  capita rate as the USA, demand would exceed the
  entire supply of paper today.

47
Nutrition transition and resource demand
48
Impact of resources

• Energy
• Rapid rise in oil prices in 2007 and 2008-
  outcome of rising demand and stagnating supply
• Oil may be being pumped out of the ground quicker
  than new reserves can be found
• Key concern is the path India and China take as
  they continue to grow economically and gain
  power- continue at same rate as have done since
  1990s they will reach GDP levels similar to those
  of EU and USA

49
Impact of resources

• Environment
• China and Indias ecological footprints may be
  similar to those of the EU and USA by 2040
  pressure on water, energy and land resources

50
Shifting power and emerging power.

• Implications of shifting power for older core
  regions
• In pairs, or threes produce a mind map to
  identify the issues linked to the rise of the new
  superpowers and their impacts on the older core
  regions. Think about economic, cultural,
  political issues.