Much ado about BRIC as threat to America’s global economic dominance

No question, powers rise and fall. It is the immutable law of nature and of geopolitics. The US has dominated the globe both in the economic, military and geopolitical spheres for over half a century and beyond, frankly since the end of the Second World War. Hence, this is often described as the US century.  So, it is natural for any nation that has been on top for such a long time to expect emerging powers to challenge it.  So, the ongoing realignment of the globe’s economic and geopolitical power structure is to be expected. However, any boxer who has faced a dominant, undefeated super heavyweight champion of the world knows it is much easier to talk about dethroning him than actually doing it.  So, when you see and hear all the hyperventilation about the decline of the US and how its dethronement is imminent, take it with more than a pinch of salt.  The US is not sitting on its rear end waiting for someone to walk up and take the championship belt from it. Whoever wants the crown would have to do better that the iconic Zaire Kinshasa rumble in the jungle bout to get it. So, when you see a half-baked, amateurish, voice-over, outlandish, really hogwash of a video reporting China suspending all trade with the U.S., you need to put your thinking cap on.  It is so outlandish and an obvious no-brainer hogwash, that it is so shocking that anyone will share that video.  Anyway, no surprises here. Almost anything, including the master of all absurdities, gets shared on Nigerian social media, including a platform like the “Great Minds” populated by the cream de la cream of Nigerian intellectuals and movers and shakers of society.  We have already entered the phase of the diminution and override of the human neural cells by AI.  We are so bombarded with information overkill to the point that we are slowly losing our ability to conduct nuance and critical analysis of information. Otherwise, why would anyone share a video that announced with fanfare and so authoritatively that China has officially cut off all trade with the US!!!? For China to do that will be akin to a man cutting off his trachea to stop the passage of inspired and expired air into and out his lungs. Does that even pass the laugh test?  Yet people are mindlessly sharing that video on Nigeria social media predicting a global economic earthquake.  China is an export dependent economy while the U.S. is a consumption-based economy (the consumer confidence index is a great indicator of US’s economic health). China economy will crumble like a house of cards without demand from the West, especially the U.S. for its manufactured goods. Yes, the exploding Chinese middle class and super rich is changing its economy to a more mature consumption and service driven economy, but it still depends on exports for its sustenance.  So, this ridiculous post about China suspending trade with US and how BRIC is a threat to a dollarized global economy in the near term, reveals an abject misreading and lack of knowledge of how the global economy operates.  While China and Russia might want to use BRIC as a counterbalance and in fact, anti-U.S. body in their geopolitical struggle with the U.S., India and Brazil have a different objective. Brazil is in the orbit of the North and South America economic zone.  India is trying to decouple its military from its reliance on Russia for her military equipment.  Who would blame them after what the world has now seen about the incompetence weakness of Russia’s military industrial capacity and its military?  Russia’s overblown and oversold military is depending on Iran made drones and missile from North Korea in its disastrous war against Ukraine. India is a rising global power. It just landed its spacecraft on the moon, the first country to do so on the more challenging moon’s southern hemisphere. Juxtapose that against Russia’s space mission to the moon which just failed spectacularly.  Global policy analysis requires nuanced and critical analysis than simply sharing alarmist, half baked propaganda of an economic earthquake.  The US, because of the dynamism of its economy, and its leadership as the innovation heartbeats of the globe’s economy, will continue to remain a major, albeit diminished force in the globe economy as new power centres emerge.  India is the country to watch. It also has territorial dispute with China. The Indian diaspora is also deeply entrenched and connected to the U.S. with high profile Indians in both the political and more so in the economic domain. Anyone who is hoping India will align with China or Russia in opposition to the West should look at who is the current occupant of No 10 Downing Street, the residence of the UK Prime Minister.  In case we have forgotten, Rishi Sunak is a full-blooded British-Indian. About the Author: A current affairs analyst, Prof. Wale Alonge is a university Don and Head, Africa-Diaspora Partnership for Empowerment and Development (ADPED) based in Miami, Florida.

Emerging, developing economies need $2trn in climate financing – IEA

The International Energy Agency (IEA) has said there is desperate need for a seven fold increase in clean energy financing in emerging and developing economies in the next 10 years if global warming is to be capped at tolerable levels. According to the IEA, financing needs to move from its present $260 billion to nearly $2 trillion in order keep temperatures from rising to catastrophic levels, annual investments in non-fossil fuel energy in emerging and developing economies.   “Financing clean energy in the emerging and developing world is the fault line of reaching international climate goals,” IEA Executive Director Fatih Birol said. The report released on the eve of the two-day Summit for a New Global Financing Pact in Paris, seeks to galvanise support for revamping the mid-20th century architecture governing financial flows from rich to developing nations. G20 nations are historically responsible for 80 percent of global carbon emissions, which are wreaking havoc on the earth’s climate. According to Amnesty International’s secretary general, Agnès Callamard, “Many vulnerable, lower-income states have been overwhelmed by economic shocks, debts they cannot pay, and the effects of climate change – a crisis to which they contributed very little, but which is costing people in these countries dearly,” “These are unprecedented challenges that require a rethink of how the world’s financial architecture is set up,” Speeding the transition from dirty to clean energy and helping emerging and developing economies cope with and prepare for devastating climate impacts are high on the summit agenda. Nearly 800 million people lack electricity and 2.4 billion have no access to clean cooking fuels, most of whom reside in poor and emerging countries. Under current policy trends, one-third of the rise in energy use in these nations over the next decade will be met by burning fossil fuels, the main driver of global warming, the IEA warned. According to Birol, investments in clean energy are increasing, but “the bad news is that more than 90 percent of that increase in clean energy since the Paris Agreement in 2015 comes from advanced economies and China.” To unlock the potential for clean energy in emerging and developing economies, the report emphasized the need for greater international technical, regulatory and financial support. Based on the IEA’s report, two-thirds of the financing for clean energy projects in emerging and developing economies excluding China “will need to come from the private sector” because public sector investments are “insufficient to deliver universal access to energy and tackle climate change”. According to the IEA report, there is potential for rapidly ramping up renewable energy. Solar power is now the cheapest source of electricity generation across almost the entire world. At least 40 percent of the global solar radiation reaching the planet lands on sub-Saharan Africa, and yet nearly 10 times more solar capacity was installed in China last year than across the entire African continent.