CHINA
22 March 2014
BRICS, still an acronym, not yet a reality
Emanuele Schibotto provides us with an insightful and critical perspective on the concept of the BRICS (Brazil, Russia, India, China and South Africa).
Over the past 5 years, the so-called BRICS countries (Brazil, Russia, India, China and South Africa) have tried to give substance to the fortunate acronym created by Goldman Sachs' economist Jim O'Neill, by carrying out joint initiatives and projects. However, it seems more a "façade operation" than a real attempt to create an alternative to the (over-critized) Group of 7, "G7" (Canada, France, Germany, Italy, Japan, United Kingdom and United States).
Numbers tell us that the BRICS group matters. Over 40 percent of the world's population live in these five countries. Their economies combined represent roughly one-quarter of world GDP. They hold over 4,000 USD billion of foreign-exchange reserves. And in 2012 the BRICS will contribute to more than half of world's economic growth.
These figures prompted the five capitals to organize joint initiatives such as the BRICS' summit to strengthen their partnership and to increase their global influence. During the last summit, held in New Delhi, lots of measures aimed at expanding the pace of trade were announced - the common goal being to reduce their economic dependence on the EU and USA.
This is not an easy task. As Dominique Moïsi rightly points out, economic power does not automatically translate into political power. First, the global economic clout of G7 countries is still far greater. And while the BRICS economies have recorded dramatic economic growth in recent years, their per capita GDP still lags below OECD average. Second, BRICS economic development relies on very much diverse economic models – from China's export-led industrialization to Russia's over-dependence on natural resources. Third, the recent worsening economic outlook does bring some worries to foreign investors.
As regards politics, there is one big question that goes unanswered: who's the group leading nation? If you consider the G7, Washington is the dominant player. China should be the natural BRICS leader, as its economic size exceeds the four other members' combined. However, there is no reason to believe this could happen anytime soon.
India and China have been experiencing diplomatic tensions for the most of the past 50 years. Brazil has sided with Western powers in the fight against undervalued yuan, the Chinese currency. Moscow and Beijing have just started to get serious in their relationship after decades of ideological rivalry – with no great results so far. Brazil, India and South Africa are very keen to reform the UN Security Council, whereas Russia and China defend the status quo, in which they exert their veto power thanks to their permanent seats.
These BRICS not only seem fragile, clay “brics”. They are also only a part of the bigger wall representing the future drivers behind global economic growth – from Turkey to Indonesia to South Korea. In other words, the newly emerging economies go far beyond BRICS.
* Emanuele Schibotto, the author is a PhD candidate in Geopolitics at the Guglielmo Marconi University in Rome. He also is Editorial Coordinator of Equilibri.net, an Italian think tank on Geopolitics and International Relations.
Numbers tell us that the BRICS group matters. Over 40 percent of the world's population live in these five countries. Their economies combined represent roughly one-quarter of world GDP. They hold over 4,000 USD billion of foreign-exchange reserves. And in 2012 the BRICS will contribute to more than half of world's economic growth.
These figures prompted the five capitals to organize joint initiatives such as the BRICS' summit to strengthen their partnership and to increase their global influence. During the last summit, held in New Delhi, lots of measures aimed at expanding the pace of trade were announced - the common goal being to reduce their economic dependence on the EU and USA.
This is not an easy task. As Dominique Moïsi rightly points out, economic power does not automatically translate into political power. First, the global economic clout of G7 countries is still far greater. And while the BRICS economies have recorded dramatic economic growth in recent years, their per capita GDP still lags below OECD average. Second, BRICS economic development relies on very much diverse economic models – from China's export-led industrialization to Russia's over-dependence on natural resources. Third, the recent worsening economic outlook does bring some worries to foreign investors.
As regards politics, there is one big question that goes unanswered: who's the group leading nation? If you consider the G7, Washington is the dominant player. China should be the natural BRICS leader, as its economic size exceeds the four other members' combined. However, there is no reason to believe this could happen anytime soon.
India and China have been experiencing diplomatic tensions for the most of the past 50 years. Brazil has sided with Western powers in the fight against undervalued yuan, the Chinese currency. Moscow and Beijing have just started to get serious in their relationship after decades of ideological rivalry – with no great results so far. Brazil, India and South Africa are very keen to reform the UN Security Council, whereas Russia and China defend the status quo, in which they exert their veto power thanks to their permanent seats.
These BRICS not only seem fragile, clay “brics”. They are also only a part of the bigger wall representing the future drivers behind global economic growth – from Turkey to Indonesia to South Korea. In other words, the newly emerging economies go far beyond BRICS.
* Emanuele Schibotto, the author is a PhD candidate in Geopolitics at the Guglielmo Marconi University in Rome. He also is Editorial Coordinator of Equilibri.net, an Italian think tank on Geopolitics and International Relations.
REFERENCES:
- BRICS Hit A Wall - Rising Economic Powers Are Not Ready For Real Leadership, by Dominique Moïsi. Les Echos/Worldcrunch. 11 September, 2012.- Fourth BRICS Summit - Delhi Declaration. Fourth BRICS Summit. Delhi Declaration
- Equilibri.net, an Italian think tank on Geopolitics and International Relations.