The Future Nations
BRICS, originally "BRIC" before the inclusion of South Africa in 2010, is the title of an association of emerging national economies : Brazil, Russia, India, China and South Africa.
With the possible exception of Russia, the BRICS members are all developing or newly industrialised countries however they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs.
As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of US$14.8 trillion, and an estimated US$4 trillion in combined foreign reserves.
In 2012, Hu Jintao, who at the time was President of China, described the BRICS countries as defenders and promoters of developing countries and a force for world peace. However, some analysts have highlighted potential divisions and weaknesses in the grouping, such as India and China's disagreements over territorial issues, slowing economic growth rates, and disputes between the members over UN Security Council reform.
The acronym was coined by Jim O'Neill in a 2001 paper entitled "Building Better Global Economic BRICS". The acronym has come into widespread use as a symbol of the shift in global economic power away from the developed G7 economies (Presently G8) towards the developing world. It is estimated that BRICS economies will overtake G7 economies by 2027.
BRICS countries represent 43 percent of world’s population, 18 percent of global trade, attract 53 percent of the foreign capital, accounts for about 25 percent of global gross domestic product on purchasing power parity basis and are currently generating about 45 percent growth of the world economy.
BRICS Trade and Economics Research Network (BRICS-TERN) has been established as a platform of non-governmental groups from among Brazil, Russia, India, China and South Africa. Its purpose is to assist the on-going cooperation between and among the BRICS countries with network-based policy research and advocacy on contemporary developmental issues.
The objective of the network will be for research organisations in BRICS countries to work together on issues of trade and investment, and jointly produce outputs which can assist policy making in BRICS countries. The following can be seen as the strategic objectives of the network
- Sustainable development
- Inclusive growth
- Promotion of fair markets
- Peace and stability
The BRICS Forum, an independent international organisation encouraging commercial, political and cultural cooperation between the BRICS nations, was formed in 2011. In June 2012, the BRICS nations pledged $75 billion to boost the lending power of the International Monetary Fund (IMF). However, this loan was conditional on IMF voting reforms. In late March 2013, during the fifth BRICS summit in Durban, South Africa, the member countries agreed to create a global financial institution which would rival the western-dominated IMF.
The G8, otherwise known as the Group of Eight, is an assembly of world leaders who meet annually to discuss global issues. Each year, the G8 holds a Leaders’ Summit, in which Heads of State and Government of member countries meet to discuss and attempt to reconcile global issues. Although the G8 is best known for its annual summits, it works throughout the year to tackle important contemporary topics such as the economy and climate change. The G8 discusses and creates global policies. However, adherence to these policies is not obligatory, and other countries can decide whether or not to obey.
The G8 is made up of heads of government from Canada, France, Germany, Italy, Japan, the Russian Federation, the United Kingdom and the United States. The European Union is also represented at meetings by both the president of the European Commission and the leader of the country that has European Union presidency.
All G8 members originate from the developed, industrialised world. The G8 excludes China and India, despite their rapid economic growth, and fails to represent countries in Africa and Latin America. This has led to accusations that the G8’s priorities fail to represent the majority of the developing world.
Indian finance minister, Mr P Chidambaram says that the five BRICS nations hope to complete preparations for their proposed joint development bank by their 2014 summit in Brazil.
The emerging powers group - Brazil, Russia, India, China and South Africa - announced their intention to set up their own development bank to reduce their reliance on Western financial institutions like IMF and World Bank.
The BRICS finance ministers met in Washington and reiterated their commitment to the BRICS bank.
The officials from the five countries - who represent a fifth of global Gross Domestic Product and have high geopolitical importance in their separate regions - would refine the plan and work out technical details for leaders to sign next year in Brazil.
Questions of where the bank will be located and respective contributions of member countries would be made by the leaders.
Before we meet in Brazil for the next summit, that is one year from Durban 2013, we hope to complete our homework. We hope that we can complete our work in 12 months. It's an ambitious agenda, but we are going to work hard on that, said Chidambaram.
Global investors should welcome the proposed $100bn Contingent Reserve Arrangement and the planned Development Bank backed by the leaders of Brazil, Russia, India, China and South Africa. The BRICS shareholders have yet to work out the details of these institutions however the political resolve is clearly in place.
Given the increasing frequency and magnitude of global financial crises since the collapse of the Bretton Woods system, the addition of another fund that major countries can rapidly mobilise in times of crisis is welcome. And a new development bank that promotes much-needed infrastructure investment is timely and can increase global aggregate supply. This is a positive development for global consumers and investors.
It is clearly evident from this that the developed nations have majorly worked towards their interests instead of viewing things from a bird’s eye view at macro level. How there can be only a few developed nations in global village and how far they can sustain the developed status without depending on developing nations.
It is said that growing from a developing stage to developed stage is not that tough however maintaining the already attained development is the biggest challenge. Undoubtedly the future nations - BRICS will work towards world peace and economics stability with complete cooperation as it is the right step towards a bright future ahead.
Some Useful Links :
BRICS - Latest News
BRICS university to offer free education
Keywords: Brazil, Russia, India, China, South Africa, BRICS, BIMSTEC