Originally coined as a term during the early 2000s, BRIC referred to\nthe global economic weight of Brazil, Russia, India and China. The term was\npopularised through financial reports developed by the investment bank Goldman\nSachs and it foresaw the economic importance that these four nations would\ncarry on the world stage during the coming decades. The BRICS economies stand\nin contrast to the Group of Seven (G7) of the world\u2019s most developed and\nindustrial economies, since the BRICS nations are still considered as being\ndeveloping economies. <\/p>\n\n\n\n
The idea of uniting the world\u2019s largest developing economies under\nthe term BRIC (Brazil, Russia, India and China) belongs to James O\u2019Neill, a\nwell-known analyst in the field of global economic research from the leading US\ninvestment bank Goldman Sachs. In 2001, O\u2019Neill wrote an article, \u2018Building\nBetter Global Economic BRICs\u2019, in which he introduced a grouping acronym BRIC\n(by taking similarity to the English word \u2018brick\u2019). Following the logic of the\nabbreviation, Kazakhstan that possesses a huge growth potential could become a\nnew member of the BRICs \u2018to complete the whole picture\u2019. But firstly the\nRepublic of South Africa joined the alliance, giving the organisation a\ntranscontinental character.<\/p>\n\n\n\n
During the years of existence and development, BRICS has been in a\nconstant process of transformation. However, we must emphasise the essence of\nthe creation of this format\u2014the consolidation of the countries which are\nprojected by leading analysts of the world to become the world\u2019s most powerful\neconomies in the 21st century. This also brings the understanding of the\ncritical role of the BRICS in global processes of building a new world order\nthrough the consolidation of international efforts. Such format fulfils the\nfunction of an \u2018architect of globalisation\u2019, laying the foundation for a new\nglobal construction, made of \u2018bricks\u2019, whose strength will depend on how long\nour common planetary home will stand. Thus, the BRICS format cannot operate in\nthe logic of isolation of the developing world from the developed Western\ncountries. The power of the BRICS and its civilisational mission consists in\nbringing the consolidated global efforts to a new level of \u2018strong wave\u2019 of\nrapidly growing economies. Collective leadership is a new experience that\ncivilisation realises within the BRICS framework in the face of globalisation.\nThe challenge for the BRICS consists in the development of a new global model\nof governance which should not be unipolar but consolidated and constructive.\nThe goal is also to avoid a negative scenario of unfolding globalisation and to\nstart a complicated merging of the global growing economies without distorting\nor breaking the single financial and economic continuum of the world. It is\nimportant to continue following this path, and not to hamper the growing\npotential of the BRICS by the pole confrontation with the West.<\/p>\n\n\n\n
BRICS nations are striving to capitalise on their economic leverage\nfor more political influence. BRICS\u2019s growing impact on Low Income Countries\n(LICs) through trade, foreign direct investment and development financing\nis significant. Therefore, this is challenging the traditional western donors such\nas the EU, the US and Japan. These relations instil the vision of\nSouth-South-Cooperation (SSC), which is based on solidarity, shared experiences\nand self-reliance of the South. The development cooperation is focusing on\ntrade, investment and economic growth as the main vehicles of advancement\nthat can be achieved via regional integration and neighbours\u2019 bilateral\ncooperation. The cooperation also insists on the principles of non-interference\nand national sovereignty. It does not focus on issues related to governance and\nsocial standard which are crucial for LICs\u2019 sustainable development. <\/p>\n\n\n\n
The BRICS nations, which overall account for more than 40 percent of\nthe world\u2019s population, have been key drivers of this historic movement toward\nalleviation of greater overall global income inequality. The collective\neconomic growth and very large populations of India and China, in particular,\nhave lifted a massive amount of people out of poverty.<\/p>\n\n\n\n
These countervailing pressures, like tectonic plates, are pushing\nagainst each other. While the net global trend for the past 200 years has been\ntoward greater overall income inequality, there is significant, growing\nevidence since the turn of the millennium that the \u201cpositive effect\u201d of growing\nincome equality between countries, spurred by the development of the global\nSouth, is superseding the \u201cnegative effect\u201d from increasing inequality within\nnations.<\/p>\n\n\n\n
Monumental as this could be, however, the picture is not yet very\nclear. While more proof is needed to judge whether this economic phenomenon is\nrobust and sustainable, what is certain is that the overall lot of the South\nhas improved dramatically, as exemplified by BRICS over the past generation.<\/p>\n\n\n\n
The most prominent beneficiaries have been a much heralded \u201cnew\u201d\nmiddle class\u2014estimated to be as large as a third of the world\u2019s\npopulation\u2014disproportionately located in key Asian emerging economies. Much of\nthe bottom third of the global income hierarchy has generally benefited, too.<\/p>\n\n\n\n
However, not all of the South has shared fully this success story, to\ndate at least. Much of Africa, and some of Latin America, for instance, have\ngenerally not benefited as much as Asia, and this is an issue the South African\nSummit hosts will seek to explore.<\/p>\n\n\n\n
It is unclear whether the development of the global South has enough\nmomentum to keep driving forward a more equitable world order. This will depend\nlargely on the same twin issues of whether emerging markets generally continue\nto grow robustly, and whether the trend toward rising income inequality within\ncountries is sustained. On the first issue, the trajectory of the global\neconomy will very likely continue to shift toward the South, and for the\nforeseeable future many key emerging markets will probably remain robust.\nHowever, the remarkable wave of emerging, market growth of the past generation\nmight now decelerate, and the global transformation it has produced in recent\nyears potentially will not be repeated.<\/p>\n\n\n\n
Regarding the second issue, it is not set in stone that ever-growing\nincome inequality within countries will continue, especially if there is a\npolitical will to address it. However, the debate over what long-term reform\nagenda should be undertaken to tackle this problem is contested by the left and\nright across much of the world.<\/p>\n\n\n\n
The BRICS comprises both the fastest-growing and largest emerging\nmarket economies. They account for almost three billion people, or just under\nhalf of the total population of the world. In recent times, the BRICS nations\nhave also contributed to the majority of world GDP growth. According to various\neconomists\u2019 projections, it is only a matter of time before China becomes the\nbiggest economy in the world\u2014sometime between 2030 and 2050\u2014seems the\nconsensus. In fact, Goldman Sachs believes that by 2050 these will be the most\nimportant economies, relegating the US to the fifth place. They are primarily\nan investment category now, although some political and economic alliances may\ndevelop from that grouping. If they do, it is likely to be temporary. Once China assumes its rightful place, it may\nhave no need for these alliances.<\/p>\n\n\n\n
BRICS\u2019s cooperation has been driven not only by economic and\npolitical factors but also by the failure of the existing global economic\ngovernance framework to satisfy the needs of these countries. As a result, the\nBRICS countries have established a new cooperative mechanism that promotes\npolitical and security governance structure reform in the UN and in the\ninternational financial, monetary and trade systems. Seven BRICS summits have\nbeen held thus far. Importantly, cooperation between the BRICS countries not\nonly produces outcomes that align with their own interests but also reflects\nthe interests of other countries. Their cooperation will lead to progressive\nchanges in the international system and minimise the inevitable shocks that may\nresult from reform.<\/p>\n\n\n\n
In general, the BRICS countries have gradually become aware that they\nshare mutual interests in international affairs and actively participate\nin international multilateral cooperation. The G20 has become an\nimportant platform for them to strengthen cooperation and provides a new\nsupporting mechanism for their participation in global economic governance.\nWhile BRICS and other emerging economies have been pushing for deep reforms in\nglobal governance, their national interests and world views differ, which makes\ncomplete alignment in the G20 unrealistic. Since 2013, structural problems in\nBRICS\u2019s economies have also been significant, including large income gaps, lack\nof financial transparency and infrastructure deficiencies. At the same time,\nthe external economic environment is not favourable to
\nBRICS, with emerging market economies experiencing sharp slowdown of late. This\nhas led to divergent growth trends between the BRICS economies. Weak\ngeopolitical links, complicated internal and external relations, and inadequate\ngovernance capabilities also pose challenges for BRICS.<\/p>\n\n\n\n
China can also continue to promote a stable and resilient\ninternational financial structure that improves the representativeness of emerging\neconomies. And, last but not least, China can play an important role in\nfacilitating policy coordination between BRICS and other G20 members. There is\nmuch for BRICS to achieve, from jointly promoting global trade growth to\nenhancing the transparency of regional trade agreements. But to do this, BRICS\nnations must make use of internal exchanges, share knowledge and unify their\nstance to ensure their voice is louder, clearer and fully reflected in the G20.<\/p>\n","protected":false},"excerpt":{"rendered":"
Originally coined as a term during the early 2000s, BRIC referred to the global economic weight of Brazil, Russia, India and China. The term was popularised through financial reports developed by the investment bank Goldman Sachs and it foresaw the economic importance that these four nations would carry on the world stage during the coming […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts\/521"}],"collection":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/comments?post=521"}],"version-history":[{"count":1,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts\/521\/revisions"}],"predecessor-version":[{"id":523,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/posts\/521\/revisions\/523"}],"wp:attachment":[{"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/media?parent=521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/categories?post=521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.competitionreview.in\/blogs\/wp-json\/wp\/v2\/tags?post=521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}