50). Lack of access to economic resources meant that the vast majority of rural landless peasants were dependent on the rural landowning classes for their survival. This dependence reduced their ability to influence government policy through the democratic political process. It is ironic that this failure of government to ensure basic levels of social security and economic empowerment happened in a liberal democracy which held regular elections, and relatively greater success was achieved in China under a Communist regime that was not faced with the prospect of loss of power through democratic processes.
Brazil and South Africa transitioned to democratic governments under conditions that were far more peaceful and orderly than either India or China. However, initial economic policies in both countries were unsuccessful in laying the foundations of strong, inclusive growth. The 1985 transition to a democratic government in Brazil happened in the midst of an economic crisis. Military governments which had ruled Brazil between 1964 and 1985 had ensured rapid economic growth in the 1967–1973 period. However, when growth slowed as a consequence of the oil price shock of 1973 the government responded by resorting to heavy borrowing abroad. This contributed to a debt crisis and a decline in economic growth in the 1980s that finally forced the military to hand over power to a civilian democratic government. The restoration of democratic government posed unique challenges to Brazilian policymakers. Groups that felt alienated from the government under military rule began to demand greater resources and attention, and in a democratic environment, this led to populist responses (Kingstone, 2009: 108). ‘Social inclusion’ of groups that had been marginalized under military government was given priority over stable economic growth (Alston et al., 2016: 208). The use of economic stabilization plans for garnering greater political support was successful electorally for the ruling party in mid-term elections in 1987, but it had a catastrophic impact on the economy with inflation touching astronomical levels by the end of the 1980s. The government began to monetize fiscal deficits to fulfil populist promises, and by the early 1990s annual inflation rates was 3,000% (Sweetwood, 2002: 54–56). It required a period of economic austerity and the ‘Real Plan’ of 1994 to stabilize the economy and put it on a more stable growth path. This decade of lost growth was to have an impact on the quality of growth in later decades as well.
The nature of transition from apartheid government to a stable democracy in 1994 marked South Africa as one of the few countries that had managed change peacefully. While economic inequalities brought about by apartheid policies had impoverished large sections of the black population in South Africa, the newly democratic country had the benefit of strong institutions, such as an independent judiciary, an efficient civil service, and a modern industry with good infrastructure. However, what it lacked was good local-level ‘micro-institutions’ that could convert political freedom to economic opportunity. While good macroeconomic management stabilized the economy, it was not accompanied by a push for economic and social development in black townships. This failure was partly the consequence of a leadership vacuum that was created in black townships when many of the more capable local workers and activists left the townships to take up jobs in the provincial and national governments (Mangcu, 2012: 482). The focus of the national government was more at the macro-level on the policy of Black Economic Empowerment (BEE) meant to give the black population a share in ownership of firms and employment. This increased the representation of blacks at top levels of enterprises, but, in the absence of significant investments in education, did little to secure stable and well-paying jobs for black workers (Horwitz and Jain, 2011).
Though considered a developed state, Russia inherited an economy from the former Soviet Union that was suffering from problems of underinvestment, inefficiency, and relative backwardness when compared not just with the more advanced Western economies but also with many of the more dynamic East Asian economies (Robinson, 2011: 9). Initial economic policy in the post-Soviet era was based on stabilization of the domestic economy by cutting budget and trade deficits, removing price controls, liberalizing the internal market by throwing it open to foreign competition, and privatizing state-owned enterprises. However, the process was deeply flawed and led to a period of economic crisis and declining economic output that lasted for the rest of the 1990s. The successor state to the USSR, which was the second largest economy in the world when it collapsed in 1991, became the twelfth largest by 1998 (Intriligator, 1998: 242–243). Economic decline was accompanied by a steep decline in living standards and growing criminalization of the economy (Zhuravskaya, 2007).
Persisting Social and Economic Inequalities
Countries that suffer from socio-economic inequalities face two significant challenges. The first is to raise total income levels of the population, and the second to ensure that it is more equitably distributed. The first is achieved by attaining high rates of economic growth and the second by socio-economic interventions, including taxation and welfare spending, that ensures that income is more equitably distributed. The varied paths that the five countries have followed is reflected in any current evaluations of the nature of economic growth and socio-economic outcomes in the five BRICS countries (Ardichvili et al., 2012; Arrighi et al., 2010). India, Brazil, South Africa, and Russia, despite having enjoyed periods of high-economic growth, continue to experience persistent inequality in income distribution. China, which was relatively more successful in achieving both high growth and greater income equality in the early years of its development, has seen inequality rise since the liberalization of the economy in 1978.
The Global Inequality Report which tracks inequality around the world by measuring the percentage of national income accruing to the top 10% of the population of each country ranks BRICS countries as being among the most unequal in the world. In India and Brazil, the top 10% get 55% of total national income. In Russia, it is 46% and in China 41% (World Inequality Lab, 2018: 9). In South Africa, the top 10% accounted for 66% of national income (World Inequalities Report, 2018: 146). All five countries have seen this disparity increase since 1990. The growth in inequality comes despite the fact that three of these countries, India, South Africa, and Brazil, have programs specifically aimed at more inclusive growth and a more equitable distribution of national wealth. Equality is one of the core tenets of the ruling Communist Party in China. Russia too sees reduction of inequality as a policy goal and has reformed its wage regulation to ensure greater distribution of wealth (World Economic Forum, 2017).
India presents a paradox as far as equitable growth is concerned. Since liberalization in 1991, it has enjoyed very high rates of growth. The GDP has increased more than nine-fold from US $275 billion in 1991 to US $2.3 trillion (Turaga et al., 2018: 26). During this period, the government has enacted legislations to implement a number of welfare schemes to ensure greater growth equity. It has also implemented programs for providing employment, food security, and access to education. India also put in place, soon after Independence, a program of reservations (affirmative action) that is intended to overcome the inequities imposed on large sections of its population because of rigidities in its caste system. Yet, both in terms of wealth distribution and in terms of social indicators, its performance has been poor compared to many developing nations at similar stages of development, in some respects even worse than Least Developed Countries (LDCs) in sub-Saharan Africa. In health care, while there have been improvements in health indicators, inequalities between different regions has increased since 2001 (Goli and Arokiasamy, 2014: 162). In 2014, the UNDP Gender Equality Study ranked India 135 out of 187 countries, In addition to barriers to social mobility imposed by the caste system, social exclusion and low levels of human development seem to be major detriments to inclusive growth (Onis, 2016).
There are two major problems that negatively affect the effectiveness of welfare programs in India. The first is lack of adequate resources. India spends only about 8% of its GDP on social services, which is not just behind OECD countries which spend 20%, but also behind countries like Brazil and South Africa which spend more about 16% of their GDP on social welfare schemes. The second is the inefficiencies in implementation with actual income transfers to those targeting being much less than funds allocated because of very high transaction costs (Jha, 2014).
South Africa reflects a similar pattern. Efforts to remove inequalities in growth inherited from the apartheid government have been hampered
