The $17 trillion BRICS shift that few noticed
- By Dan Steinbock
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E-mail China.org.cn, July 14, 2015
And yet, the forces of development that unite the BRICS are greater than those that divide them.
Unlike the G7 nations, which garnered their early prosperity through colonialism, the BRICS nations are the ones that suffered dearly from that very same colonialism. Due to their later starting-point in economic development, the prosperity levels of these nations are significantly lower than those of their counterparts in the advanced world. As a result, they have similar views about international economy, politics and governance.
And it is precisely these commonalities that fueled the theme of the 7th Summit: “BRICS partnership: A powerful factor for global development.”
What made this Summit different from the all the previous ones was the effort to transform the very nature of the BRICS cooperative mechanism, from a forum of dialogue to a venue of strategy – from talk to action.
The new forces behind the BRICS push
There are three new forces that motivate China’s BRICS efforts. Beijing has initiated a series of huge infrastructure projects that can fuel markets for years to come. The “One Belt, One Road” initiative has potential to uplift modernization in China and in and beyond its regional neighborhood. As Beijing seeks to couple the One Belt, One Road initiative with the BRICS goals, economic development is likely to accelerate from East and Southeast Asia to South Asia, Eurasia, Africa and the Americas.
These massive initiatives will be supported by the Asian Infrastructure Investment Bank (AIIB) and the BRICS nations’ New Development Bank. The Ufa witnessed the launch of the $100 billion BRICS Bank and a reserve currency pool worth another $100 billion. In turn, the registered capital of the AIIB amounts to $100 billion, with half from Beijing and the rest from the other founding members.
From now through 2030, the world will need to spend at least $57 trillion to build the ports, power plants, rails, roads, telecoms, water systems, and other infrastructure that the global economy needs. According to McKinsey, for advanced economies, the priority is to renew aging and dilapidated infrastructure; but for emerging ones, it is to build the structures required to support growth. The latter is the larger part of the total bill – and that’s what the BRICS will fuel in the coming years.
In the past few days, the West has been so fixed with the fate of a proud small nation in Europe that once gave the world the idea of democracy that it willfully ignored the large emerging economies that one day may make that democracy true at the global level.
Dr Dan Steinbock is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/DanSteinbock.htm
This post was first published at Chinausfocus.com. To see the original version please visit: http://www.chinausfocus.com/foreign-policy/the-17-trillion-brics-shift-that-few-noticed/
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