BRICS

Not to be confused with BRIC.

BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa.[4] The grouping was originally known as "BRIC" before the inclusion of South Africa in 2010. The BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs; all five are G-20 members.[5] Since 2010, the BRICS nations have met annually at formal summits. Russia currently holds the chair of the BRICS group, and will host the group's seventh summit in July 2015.

As of 2014, the five BRICS countries represent almost 3 billion people, or approximately 40% of the world population. The five nations have a combined nominal GDP of US$16.039 trillion, equivalent to approximately 20% of the gross world product, and an estimated US$4 trillion in combined foreign reserves.[2][6] The BRICS have received both praise and criticism from numerous commentators.[7][8][9]

History

The term "BRIC" was coined in 2001 by then-chairman of Goldman Sachs Asset Management, Jim O'Neill, in his publication Building Better Global Economic BRICs.[10] The foreign ministers of the initial four BRIC states (Brazil, Russia, India, and China) met in New York City in September 2006, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on 16 June 2009.[11]

First BRIC summit

The BRIC grouping's first formal summit, also held in Yekaterinburg, commenced on 16 June 2009,[12] with Luiz Inácio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India and China, all attending.[13] The summit's focus was on means of improving the global economic situation and reforming financial institutions, and discussed how the four countries could better co-operate in the future.[12][13] There was further discussion of ways that developing countries, such as the BRIC members, could become more involved in global affairs.[13]

In the aftermath of the Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be "diversified, stable and predictable".[14] Although the statement that was released did not directly criticise the perceived "dominance" of the US dollar – something that Russia had criticised in the past – it did spark a fall in the value of the dollar against other major currencies.[15]

Entry of South Africa

In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal admission began in August of that year.[16] South Africa officially became a member nation on 24 December 2010, after being formally invited by the BRIC countries to join the group.[16] The group was renamed BRICS – with the "S" standing for South Africa – to reflect the group's expanded membership.[17] In April 2011, the President of South Africa, Jacob Zuma, attended the 2011 BRICS summit in Sanya, China, as a full member.[18][19][20]

Developments

The BRICS leaders in 2014. Left to right: Putin, Modi, Rousseff, Xi and Zuma.

The BRICS Forum, an independent international organisation encouraging commercial, political and cultural cooperation between the BRICS nations, was formed in 2011.[21] 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.[22] In late March 2013, during the fifth BRICS summit in Durban, South Africa, the member countries agreed to create a global financial institution which they intended to rival the western-dominated IMF and World Bank.[23] After the summit, the BRICS stated that they planned to finalise the arrangements for this New Development Bank by 2014.[24] However, disputes relating to burden sharing and location have slowed down the agreements.

At the BRICS leaders meeting in St. Petersburg in September 2013, China committed $41 billion towards the pool; Brazil, India and Russia $18 billion each; and South Africa $5 billion. China, holder of the world's largest foreign exchange reserves and who is to contribute the bulk of the currency pool, wants a greater managing role, said one BRICS official. China also wants to be the location of the reserve. "Brazil and India want the initial capital to be shared equally. We know that China wants more," said a Brazilian official. "However, we are still negotiating, there are no tensions arising yet."[25] On 11 October 2013, Russia's Finance Minister Anton Siluanov said that a decision on creating a $100 billion fund designated to steady currency markets would be taken in early 2014. The Brazilian finance minister, Guido Mantega stated that the fund would be created by March 2014.[26] However, by April 2014, the currency reserve pool and development bank had yet to be set up, and the date was rescheduled to 2015.[27] One driver for the BRICS development bank is that the existing institutions primarily benefit extra-BRICS corporations, and the political significance is notable because it allows BRICS member states "to promote their interests abroad... and can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues."

In March 2014, at a meeting on the margins of the Nuclear Security Summit in The Hague, the BRICS Foreign Ministers issued a communique that "noted with concern, the recent media statement on the forthcoming G20 Summit to be held in Brisbane in November 2014. The custodianship of the G20 belongs to all Member States equally and no one Member State can unilaterally determine its nature and character." In light of the tensions surrounding the 2014 Crimean crisis, the Ministers remarked that "The escalation of hostile language, sanctions and counter-sanctions, and force does not contribute to a sustainable and peaceful solution, according to international law, including the principles and purposes of the United Nations Charter."[28] This was in response to the statement of Australian Foreign Minister Julie Bishop, who had said earlier that Putin might be barred from attending the G20 Summit in Brisbane.[29]

In July 2014, the Governor of the Russian Central Bank, Elvira Nabiullina, claimed that the "BRICS partners the establishment of a system of multilateral swaps that will allow to transfer resources to one or another country, if needed" in an article which concluded that "If the current trend continues, soon the dollar will be abandoned by most of the significant global economies and it will be kicked out of the global trade finance."[30]

Over the weekend of 13 July 2014 when the final game of the World Cup was held, and in advance of the BRICS Fortaleza summit, Putin met his homologue Dilma Rouseff to discuss the BRICS development bank, and sign some other bilateral accords on air defense, gas and education. Rouseff said that the BRICS countries "are among the largest in the world and cannot content themselves in the middle of the 21st century with any kind of dependency."[31] The Fortaleza summit was followed by a BRICS meeting with the UNASUR presidents in Brasilia, where the development bank and the monetary fund were introduced.[32] The development bank will have capital of US$50 billion with each country contributing US$10 billion, while the monetary fund will have US$100 billion at its disposal.[32]

On 15 July, the first day of the BRICS 6th summit in Fortaleza, Brazil, the group of emerging economies signed the long-anticipated document to create the US$100 billion BRICS Development Bank and a reserve currency pool worth over another US$100 billion. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also inked.[33]

At the end of October 2014, Brazil trimmed down its US government holdings to US$261.7 billion; India, US$77.5 billion; China, US$1.25 trillion; South Africa, US$10.3 billion.[34]

In March 2015, Morgan Stanley stated that India and Indonesia have escaped from 'fragile five', although US maybe increase the interest rate. Previously, in August 2013 Morgan Stanley stated that both countries above together with Brazil, Turkey and South Africa as fragile five due to its vulnerable currencies. But after it, India and Indonesia have reformed its economy with completion 85 percent of necessary adjustments and 65 percent respectively, while Brazil with 15 percent, Turkey with 10 percent and South Africa can be said as nil.[35]

Summits

The grouping has held annual summits since 2009, with member countries taking turns to host. Prior to South Africa's admission, two BRIC summits were held, in 2009 and 2010. The first five-member BRICS summit was held in 2011. The most recent BRICS summit took place in Fortaleza, Brazil, from 14 to 16 July 2014.[36]

Date(s) Host country Host leader Location Notes
1st 16 June 2009  Russia Dmitry Medvedev Yekaterinburg (Sevastianov's House)
2nd 15 April 2010  Brazil Luiz Inácio Lula da Silva Brasília Guests: Jacob Zuma (President of South Africa) and Riyad al-Maliki (Foreign Minister of the Palestinian National Authority)
3rd 14 April 2011  China Hu Jintao Sanya (Sheraton Sanya Resort) First summit to include South Africa alongside the original BRIC countries.
4th 29 March 2012  India Manmohan Singh New Delhi (Taj Mahal Hotel)
5th 26–27 March 2013  South Africa Jacob Zuma Durban (Durban ICC)
6th 14–16 July 2014  Brazil Dilma Rousseff Fortaleza (Centro de Eventos do Ceará)[37]
Brasília 		BRICS New Development Bank and reserve currency pool agreements signed.
Guest: Leaders of Union of South American Nations (UNASUR)[38][39]
7th 2015  Russia Vladimir Putin Ufa[40]

Member country

Economic data is sourced from the International Monetary Fund, current as of April 2015, and is given in US dollars.[41]

Country Population GDP
(PPP)		 GDP
(nominal)		 HFCE (2009) Government spending Exports Imports GDP per capita (PPP) Literacy rate Life expectancy (years, avg.) HDI
 Brazil 201,046,886$3259.079 bn$1903.934 bn $1,266.3 bn $846.6 bn $396.0 bn $278.8 bn $15,153 95.5% 76.5 .744 (high)
 Russia 143,678,000 $3458.402 bn$1175.270 bn $671.6 bn $414.0 bn $542.5 bn $358.1 bn $24,764 99.7% 70.5 .788 (high)
 India 1,210,193,422$7996.623 bn $2308.018 bn $737.9 bn $309.0 bn $309.1 bn $500.3 bn $6,01374.0% 65 .586 (medium)
 China 1,354,040,000$17632.0 bn$10355.0 bn $1,835.3 bn $2,031.0 bn $2,021.0 bn $1,780.0 bn $12,02195.1% [42]76 .719 (high)
 South Africa 51,770,560$711.0 bn $341.28 bn $173.8 bn $95.27 bn $101.2 bn $106.8 bn $13,192 93%[43]49.56[43] .658 (medium)

Potential members

Indonesia, Turkey, Mexico and Germany have been mentioned as candidates for full membership of the BRICS, while Egypt, Argentina, Iran, Nigeria, Syria and most recently Bangladesh have expressed interest in joining BRICS.[44][45][46]

Criticism

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.[7] Some analysts have highlighted potential divisions and weaknesses in the grouping, including significant economic instabilities,[47][48][49][50] disagreements between the members over UN Security Council reform,[51] and India and China's disputes over territorial issues.[8]

Current BRICS leaders

See also

References

  1. ↑ "Report for Selected Countries and Subjects." World Economic Outlook. International Monetary Fund. 2014. Retrieved 21 December 2014.
  2. ↑ 2.0 2.1 2.2 "World Economic Outlook". IMF. April 2013 data. Retrieved 17 April 2013. Check date values in: |date= (help)
  3. ↑ "Country Comparison: Area". The World Factbook. CIA. Retrieved 13 February 2015.
  4. ↑ "New era as South Africa joins BRICS". SouthAfrica.info. 11 April 2011. Retrieved 2 December 2012.
  5. ↑ China, Brazil, India and Russia are all deemed to be growth-leading countries by the BBVA: "BBVA EAGLEs Annual Report (PPT)". BBVA Research. 2012. Retrieved 16 April 2012.
  6. ↑ "Amid BRICS' rise and 'Arab Spring', a new global order forms". Christian Science Monitor. 18 October 2011. Retrieved 20 October 2011.
  7. ↑ 7.0 7.1 "Brics a force for world peace, says China". Business Day. 8 August 2012. Retrieved 9 November 2013.
  8. ↑ 8.0 8.1 "Brics summit exposes the high wall between India and China". Asia Times. 2 April 2012. Retrieved 10 July 2013.
  9. ↑ "BRICS – India is the biggest loser". USINPAC. 18 April 2013. Retrieved 17 June 2013.
  10. ↑ Jim O' Neill (2001). "Building Better Global Economic BRICs". Goldman Sachs. Retrieved 13 February 2015.
  11. ↑ "Cooperation within BRIC". Kremlin.ru. Retrieved 16 June 2009. Archived 19 June 2009.
  12. ↑ 12.0 12.1 "First summit for emerging giants". BBC News. 16 June 2009. Archived from the original on 18 June 2009. Retrieved 16 June 2009.
  13. ↑ 13.0 13.1 13.2 Bryanski, Gleb (26 June 2009). "BRIC demands more clout, steers clear of dollar talk". Reuters. Archived from the original on 19 June 2006. Retrieved 16 June 2009.
  14. ↑ "BRIC wants more influence". Euronews. Archived from the original on 21 June 2009. Retrieved 16 June 2009.
  15. ↑ Zhou, Wanfeng (June 16, 2009). "Dollar slides after Russia comments, BRIC summit". Reuters. Retrieved July 6, 2014.
  16. ↑ 16.0 16.1 Graceffo, Antonio (21 January 2011). "BRIC Becomes BRICS: Changes on the Geopolitical Chessboard". Foreign Policy Journal. Retrieved 14 April 2011.
  17. ↑ Blanchard, Ben and Zhou Xin (14 April 2011). "UPDATE 1-BRICS discussed global monetary reform, not yuan". Reuters Africa. Retrieved 26 April 2013.
  18. ↑ "South Africa joins BRIC as full member". Xinhua. 24 December 2010. Retrieved 14 April 2011.
  19. ↑ "BRICS countries need to further enhance coordination: Manmohan Singh". Times Of India. 12 April 2011. Retrieved 14 April 2011.
  20. ↑ "BRICS should coordinate in key areas of development: PM". Indian Express. 10 April 2011. Retrieved 14 April 2011.
  21. ↑ BRICS Forum website. Retrieved 29 November 2012.
  22. ↑ "Russia says BRICS eye joint anti-crisis fund". Reuters. 21 June 2012. Retrieved 5 December 2012.
  23. ↑ "Brics eye infrastructure funding through new development bank". The Guardian. 28 March 2013. Retrieved 29 March 2013.
  24. ↑ "India sees BRICS development bank agreed by 2014 summit". Reuters. 19 April 2013. Retrieved 10 July 2013.
  25. ↑ http://in.reuters.com/article/2013/10/11/g20-brics-fund-idINL6N0I13N720131011
  26. ↑ http://in.reuters.com/article/2013/10/10/us-brazil-economy-mantega-idINBRE9990WR20131010
  27. ↑ rbth.com: "BRICS countries to set up their own IMF" 14 Apr 2014
  28. ↑ "Chairperson's Statement on the BRICS Foreign Ministers Meeting held on 24 March 2014 in The Hague, Netherlands" 24 Mar 2014
  29. ↑ "BRICS at Hague slam attempts to isolate Putin" 24 Mar 2014
  30. ↑ voiceofrussia.com: "BRICS morphing into anti-dollar alliance" 3 Jul 2014
  31. ↑ yahoo.com: "Brazil, Russia discuss creation of BRICS bank" 14 Jul 2014
  32. ↑ 32.0 32.1 "BRICS to launch bank, tighten Latin America ties". Yahoo.com. 11 July 2014. Retrieved 13 February 2015.
  33. ↑ "BRICS establish $100bn bank and currency reserves to cut out Western dominance". RT.com. 15 July 2014
  34. ↑ "India cuts exposure to US government securities at $77.5 billion in October." The India Times. 21 December 2014. Retrieved 21 December 2014. Alternative link: of interest& utm_medium=text&utm_campaign=cppst
  35. ↑ Simon Kennedy (March 18, 2015). "Fragile Five currencies may soon be three".
  36. ↑ "Africa: Reporter's Notebook – All Systems Go for Brics Summit in SA". AllAfrica.com. 10 October 2012. Retrieved 26 April 2013.
  37. ↑ "A Cúpula de Durban e o futuro dos BRICS". Post-Western World. 4 July 2013. Retrieved 7 November 2013.
  38. ↑ "Los líderes del BRICS, Unasur, Cuba, México y Costa Rica se citan en Brasilia". LaVanguardia.com. LaVanguardia. Retrieved 15 July 2014.
  39. ↑ "BRICS summit: PM Modi to leave for Brazil tomorrow, will seek reforms". Hindustan Times. Retrieved 12 July 2014.
  40. ↑ "Ufa to host SCO and BRICS summits in 2015". UfaCity.info. Retrieved 7 November 2013.
  41. ↑
  42. ↑ "The World Factbook".
  43. ↑ 43.0 43.1 "The World Factbook".
  44. ↑ "Syria Seeks to Join Shanghai Group, BRICS – Minister". RIA Novosti. 27 April 2013. Retrieved 7 November 2013.
  45. ↑ "India quiere a Argentina en los BRICS, el club de los emergentes". Clarin. 3 May 2014. Retrieved 12 May 2014.
  46. ↑ "Germany Secretly Planning on Joining BRICS".
  47. ↑ "Broken BRICs: Why the Rest Stopped Rising". Foreign Affairs. November/December 2012 issue. Retrieved 19 December 2012. Check date values in: |date= (help)
  48. ↑ "China Loses Control of Its Frankenstein Economy". Bloomberg. 24 June 2013. Retrieved 25 June 2013.
  49. ↑ "Brazil Stocks In Bear Market As Economy Struggles". Investors.com. 26 June 2013. Retrieved 29 June 2013.
  50. ↑ "Emerging economies: The Great Deceleration". The Economist. 27 July 2013. Retrieved 27 July 2013.
  51. ↑ "BRICS Leaders Fail to Create Rival to World Bank". New York Times. 29 March 2012. Retrieved 18 June 2013.

Books and Further reading

External links