Goa BRICS summit
- By Sajjad Malik
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E-mail China.org.cn, October 14, 2016
The 8th BRICS summit will be held in the Indian city of Goa beginning October 15. It will bring together leaders from Brazil, Russia, India, China and South Africa - the countries which are members of BRICS.
The theme of this year's summit is: "Building responsive, inclusive and collective solutions." The gathering will mainly focus on economic issues faced by BRICS nations and try to find a collective and collaborative response.
Goldman Sachs analyst Jim O'Neill used BRIC acronym for the first time in a research paper in November 2001 about a group of emerging economies comprised of Brazil, Russia, India and China. Later, South Africa was added to the list, leading to BRICS.
The grouping was formalized when their foreign ministers met in 2006 on the sidelines of the UN General Assembly annual session in New York, but consultations for it had started several years before. The first BRIC summit was held in Yekaterinburg, Russia, in 2009, when South Africa was still not a part of it.
BRICS countries represent about 43 percent of the world population. The sheer amount of people inhabiting the BRICS countries makes the group an important international player when working together for common goals.
The numerical strength is just one aspect of BRICS, as it also controls 30 percent of global GDP, though, this is far lower than its potential - the summit provides a platform to think of ways to maximize this potential.
The share of BRICS in world trade is about 17 percent, also far below the potential strength of these nations.
At first glance, BRICS is another international association aiming to build economic and commercial linkages by mutual cooperation. But it is not without its own distinctive features. For example, hardly any other small number of nations has such vast potential. They also do not have any major issues that would hamper mutual cooperation.
President Xi Jinping will represent his country at the Goa summit. Foreign Ministry spokesman Lu Kang said Xi is attending the summit at the invitation of Indian Prime Minister Narendra Modi. He is expected to meet leaders and put forth his vision of "win-win cooperation" for a prosperous future.
China's presence is the backbone of BRICS, as it constitutes 70 percent of the collective gross national product of the BRICS. It would be correct to say that China is the main stakeholder of all institutional arrangements that BRICS nations are creating to expedite growth and ward off economic emergencies.
For example, China promised to provide $41 billion for a $100 billion BRICS joint currency reserve pool agreed to during a summit in Brazil. It is a kind of emergency fund to deal with financial problems. China also played lead role in setting up the New Development Bank, formerly known as BRICS bank, in Shanghai.
Separately, the Asian Infrastructure and Investment Bank launched by China is a parallel arrangement to fund major development projects in the developing world. BRICS can be a beneficiary of this bank.
Despite its long-term prospects, BRICS currently faces several challenges. The major one is the slowing economies of its members.
Russia is coping with a weakening ruble and a slump in oil prices, while Brazil is suffering its worst recession in decades. Its economic problems have been confounded by political turmoil and the health scare caused by Zika virus.
Indian's strategic ambitions, rampant corruption and inefficient bureaucracy are hurdles. It needs to normalize ties with Pakistan to maintain a steady upward economic trajectory. Its strategic rivalry with China could spoil the efforts for closer cooperation among BRICS countries.
China is also passing through a period of major adjustments, which will take time to settle while also slowing down net growth in the process. South Africa has to deal with a basket of issues, like unemployment, violent crime and attracting new investments.
It is time for BRICS to think of innovative ways for speeding up economic growth.
Sajjad Malik is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/SajjadMalik.htm
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