The question of what truly unites all BRICS economies has been an ongoing topic in the ideation of the bloc’s global mission for decades
The question of what truly unites all BRICS economies has been an ongoing topic in the ideation of the bloc’s global mission for decades. But while there may be a host of factors at work to bring these emerging markets closer together (perhaps most notably the search for alternatives to the existing global governance framework), there is also a sense that the single most important challenge faced by BRICS members in boosting mutual economic cooperation is the tremendous distance that separates these economies. In fact, there are several dimensions to the BRICS distance challenge that have been explored by BRICS+ Analytics authors in the past, including the distances between BRICS core members as well as the great continental expanses in the broader regions of the Global South. In what follows we explore the three dimensions of distance with respect to BRICS-5, namely the geographical distances between BRICS members, the scale of the continental remoteness of inland regions in these economies and the cultural diversity/distance across the BRICS-5 economies. While undoubtedly a challenge, distance may be the factor to overcome for the BRICS economies in order to deliver a tangible contribution to reforming the global economic system, bridging existing divides and advancing South-South economic cooperation.
In terms of the geographical divides between BRICS-5 members, one of the ways to look at the enormity of these distances is to take the distance pairs between the capitals of G20 economies. A ranking of these distances reveals that there are three BRICS pairs in the top-10 – the Brazil-China pair (#6 in the top 20), the India-Brazil pair (#8) and the South Africa-China pair (#10) and another one, Russia-Brazil (#17), in the top-20. If Argentina is considered to be part of the BRICS+ circle (due to its earlier participation in BRICS+ summits), then the wider BRICS+ bloc holds the #1 position in the ranking, with the distance in the Argentina-China pair exceeding 19,000 km. All of the BRICS-5 economies feature in these top-20 distance rankings of the G20 and BRICS is the only bloc to be represented in the top-10 with the sole exception of Australia-Canada pair (#7) from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Another distance dimension with respect to BRICS is the scale of distances within these economies – something that to a significant degree can be gauged by the fact that the BRICs countries are in the top 10 of the world in terms of the size of their territories. A different way to gauge the importance of intra-country spacial divides for BRICS is to look at the scale of the distances between their remote inland locations and their coastline. This gives some idea about the scale of continental isolation that regions in these economies may be facing compared to other countries. On this count (in terms of straight distances from the farthest locality to the coastline), China (#1) and Russia (#2) are in the top-2, while Brazil (8) and India (6) are in the top 10 and are close to being on par with the US, Canada and Australia (differences of 100-150 km). If landlocked economies are excluded, the BRICs are essentially at the top of the world league table in terms of the scale of internal distances to the coastline.
If these rankings are further adjusted for the degree of elevation of the terrain, then all developed economies drop out of the top-10, with Russia, China and India retaining their top-10 positions (Ethiopia (a new BRICS member) as well as Kazakhstan and Bolivia (BRICS partners) are in the top-10). If the terrain is further adjusted for such logistical barriers as deserts and tropical forests, then the ranking includes all BRICs in the top 15, with no developed economies in the top-10 or top-15. These internal distances may be further explored from the point of view of ethnic and cultural diversity, administrative divisions (China and India are among the leaders in terms of the number of local divisions) and other factors that contribute to the unique internal diversity across BRICS economies. Another angle with respect to BRICS distance is the continental expanses of the broader regions of the BRICS economies that are typically more fragmented and greater in size than the respective macro-regions in the developed world.
The third distance dimension across BRICS is the cultural diversity across the core economies, particularly when compared to the variations in cultural attitudes across the developed world. One way of quantifying cultural distance between countries is to use Hofstede’s methodology that ascribes scores to countries across six dimensions: Power Distance (PDI), Individualism (IDV), Masculinity (MAS), Long-Term Orientation (LTO), Indulgence (IVR), Uncertainty Avoidance (UAI). Based on the differences in these national scores as indicated by the squared root of the sums of squared score differences across the six categories (Euclidean distance) it is possible to estimate (with due regard to methodological limitations and imperfections of such an approach in gauging cultural differences – sub-cultures not taken fully into account, uniform weights ascribed to all six components) an approximation of cultural differences.
Under such an approach, for most of the intra-BRICS pairs these figures are among the highest in the world, with the intra-Western cultural distances exhibiting far lower divergence. In particular, in the top-5 of the world’s cultural distance country pairs, there is the China-Brazil country pair with a score of 77.9, which compares to the 10.2 score for the US-Australia pair or 13.5 for the US-UK pair. Other South-South country pairs in the top-10 in terms of cultural distance include China-Venezuela (#1 globally) and China-Mexico (#7), with most of the remaining country pairs at the top dominated by the North-South pairs. Other intra-BRICS-5 pairs at the top include the China-South Africa pair (#18 in the world), with all other intra-BRICS-5 pairs falling into the top 12% in the world in terms of high cultural distance.
Furthermore, across the entire data set, the top-10 lowest cultural distances in the world are almost exclusively concentrated in the developed economies: there is only one North-South country pair in the top-10 lowest cultural distances across the globe, namely the Argentina-Italy (for understandable reasons of cultural and ancestral affinity), with the rest dominated by North-North cultural affinities, including such pairs as Switzerland-Germany or Netherlands-Denmark. A similar picture emerges from the use of Schwartz’s figures[8] to calculate cultural distances – the highest divergence is across the North-South dimension, as well as partly the South-South space, with the lowest cultural distances being concentrated among the developed economies.
The resulting three dimensions in the distances across the BRICS-5 core – the inter-BRICS geographical distance, the inter-BRICS cultural distance and the intra-BRICS geographical distances – all reinforce each other to raise the challenge for BRICS to connect via trade, investment, migration as distances continue to impart dominant effects across the global economy in line with the predictions of the gravity model. Indeed, recent empirical research does point to the significance of cultural distance in affecting trade flows, with the geographical distance factors continuing to be a statistically significant factor in gravity model simulations with at times a rising rather than declining coefficient (a phenomenon referred to as the “distance puzzle”).
Mitigating the distance challenge may call for a prioritization of BRICS economic cooperation in such areas as finance and investment, with connectivity projects alleviating the costs of isolation and remoteness for inland regions. More trade and investment in the services sector, including in the sphere of digital economy, may further lower the BRICS economies susceptibility to the distance factor, while free trade accords across BRICS as well as within the respective regions of the BRICS core members (RTAs) could raise the trade and investment potential for BRICS cooperation, thus compensating for the negativity of high distances. At the micro-level of companies and industries, the cultural diversity factor should be used as an advantage rather than a barrier in building BRICS/BRICS+ business models.
Ultimately, viewed through the prism of distance, the challenges and the unique mission of the BRICS grouping become more tangible and distinct. The distance factor should not be taken as an insurmountable barrier for the bloc, but rather as a challenge to be overcome in order to expand the possibility set for the global economy through boosting South-South cooperation and supporting the disadvantaged regions of the world economy. Without bridging such divides, the international economy could well continue to operate along the lines of the “core-periphery”/cumulative causation paradigm, with inland and least developed regions further falling behind. And while many observers continue to insist that the bloc’s diversity is a source of weakness, dealing with the distance/diversity challenge may be key to transforming the global economy in novel ways that favor cooperation over zero-sum competition and inclusive development models over crisis-prone economic dependencies. So there you have it – the global mission for the BRICS to bridge the divides and connect the farthest poles: discrimina superanda pro bono omnium.
Yaroslav Lissovolik is Founder of BRICS+ Analytics.
