brics and its importance by sushil hardy
TRANSCRIPT
BRICS... Sushil MA/MSc HS&AT [email protected]
What are the BRICS?
BRICS (Brazil, Russia, India, China, South Africa). The five leading emerging powers, straddling the continents of Asia, Africa and Latin America.Originally the first four were grouped as "BRIC" (or "the BRICs"), before the controversial addition of South Africa in 2010.
Features of this Group -1) Represents 3 Billion People. (40% of World Population)
2) Accounts for $20 Trillion of GDP which is growing at 28% Growth Rate.
3) First Summit in 2009, in the midst of Global Recession.
4) No European/US as a member.
5) Idea to form this group was conceived by Goldman Sachs.
The BRICS countries have made tremendous contributions to the world economy by increasing employment, cutting poverty, pouring in capital, exporting and importing,among others.
2001, Jim O’Neill, then Chief Economist of Goldman Sachs, coined the acronym for Brazil, Russia, India and China as the largest emerging markets economies. He expected them to grow faster than the developed countries and to play an increasingly important role in the world.
Why does the world need the BRICS?
Jim O’Neill’s point has been that the world is changing. The leading role of the Group of Seven (G7) (Canada, France, Germany, Italy,
Japan, the United Kingdom, and the United States.) and, more broadly, of the Organisation for Economic Cooperation and Development (OECD) is no longer undisputed. Most multi-lateral institutions were designed in the era when the West dominated the world. This imbalance has been especially clear during the recent global financial crisis when the need for participation by non-G7 countries became evident.
Do they have enough in common to get things done?BRICS countries are very different — both in terms of their
resources and in terms of their values and goals. The only thing they all have in common is, well, membership of BRICS.
Brazil and India are democratic, China and Russia are not. Brazil and Russia export hydrocarbons, China and India are net importers. China and Russia are permanent members of the UN Security Council – the others are not. Structure of financial systems, levels of income, education, inequality, health challenges also differ substantially within BRICS.
What could they do?
BRICS now have a clear leader than can address the issue of internal differences in goals and resources. BRICS is quickly becoming a China-led club. Unlike 15 years ago, China’s nominal GDP is now larger than that of the other club members combined. The same it’s true with net international financial position, outward Foreign Direct Investment and development aid.
China’s leadership has finally turned the long-debated plan for a “BRICS Bank” into a reality. The BRICS have founded the New Development Bank (NDB), which will become a major regional development bank – the first one without OECD-countries’ membership (unless of course Greece joins.)
INDIA in BRICSAt 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.
Looking at India’s own geopolitical and economic interests, the country has made some significant strides over the past few years with countries like Japan, Vietnam and Bangladesh.
Japan has committed to making heavy investments in India’s infrastructure sector, including the Ahmedabad-Mumbai bullet train and highways in North Eastern India.
Given its current interests, India can find greater opportunity by strengthening its relationship with Japan, the Asian Development Bank, and the ASEAN. Closer ties with core regional organizations in South Asia, Latin America, and Africa also present favorable economic opportunities for India while avoiding the shortcomings presented by membership in the BRICS.
Indian membership in the BRICS has no direct risk, but it certainly should not be among India’s top priorities. There are numerous relationships and organization memberships with greater potential to bring economic and strategic benefit to India.India-China strategic ties. Even though India and China have issues regarding borders, Tibet, South China Sea, Dalai Lama etc., it still supports each other in strategic economic relations. A sustained and steady growth will help in stability of the world.
INDIA have made tremendous contributions to the world economy by increasing employment, cutting poverty, pouring in capital, exporting and importing,among others.
