Giving the BRICS a voice
- By Jiang Shixue
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E-mail China.org.cn, March 28, 2012
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Nutrient for the world economy [By Jiao Haiyang/China.org.cn] |
Leaders of Brazil, Russia, India, China and South Africa (BRICS) are meeting once again today and tomorrow, at a summit in India.
Together the five BRICS nations have almost 2.9 billion people and a total GDP of US$9 trillion. With this population size and economic might, they are certainly vital in every aspect on the world stage.
The most crucial mission of the BRICS is to push forward the realization of a multi-lateral world order. From UN reforms to the reshaping of the IMF, the Doha Round and climate change conferences, the loud voices of the BRICS and other emerging economies have been heard. The United States can no longer enjoy its privilege as the world's sole superpower.
The BRICS are also expected to make contributions to world economic stability at a time when U.S. economic growth is still sluggish and Europe is still mired in a debt crisis. Indeed, no one could imagine that the once so-called basket case nations have now turned themselves into successful examples of rapid growth and an "engine" of the world economy.
The most important question is which direction the BRICS will head in the future. Will they become a political group, a free trade bloc, an organization of economic cooperation or simply a platform for exchanging ideas and views on global issues?
Although the BRICS provides a platform for expressing political positions on a wide range of global issues, hopefully this will not be turned into a political weapon. Given the fact that trade frictions among BRICS nations exist, it is unrealistic to assume that they will establish a free trade bloc. The most likely scenario is for the countries to gradually form a loose organization of economic cooperation.
We have already witnessed four BRICS summits. How can we make these high-level gathering more effective? Ideally, the meetings should not be only composed of hand shaking, group photos, coffee, wine and joint communiqués. In order to prevent the summits into "talk shops", the BRICS leaders need to consider the matter of institutionalization.
By institutionalization it means the BRICS would become a formal "G", an organization with an agreed charter or a treaty that has a certain degree of binding power as well as a permanent secretariat in place. In this way, the BRICS leaders would meet regularly to discuss global issues of common interest. It is likely that a non-institutionalized BRICS would continue to produce more smoke than fire.
Finally, the question of whether the BRICS can expand to include other emerging economies must be addressed. It is a well recognized fact that, in today's world, there are other important emerging economies on the world stage. These countries include Mexico and Argentina in Latin America and Indonesia, South Korea, Saudi Arabia and Turkey in Asia. These six emerging economies are members of the much more important G20. Why not expand the BRICS to include these six developing nations?
To put it another way, will the BRICS expand to represent the whole camp of the developing world? Will the consensuses reached by the BRICS leaders be accepted by other developing nations? Will the positions expressed in the joint communiqués at the BRICS summit be adopted by other emerging economies? Quite unlikely. The BRICS summits even carry the danger of dividing, rather than strengthening, the unity of the developing world as a whole.
In his article titled "Down with emerging markets", Goldman Sachs economist Jim O'Neil wrote, "I decided with my colleagues to pursue the term 'growth economies', which Goldman Sachs adopted in 2010 to describe how we treat many of the world's most dynamic markets. At its simplest, a growth economy should be regarded as one that is likely to experience rising productivity, which, together with favorable demographics, points to economic growth that outpaces the global average." According to this definition, O'Neil says eight countries currently qualify: the BRIC countries, along with South Korea, Indonesia, Mexico, and Turkey, while others - including Saudi Arabia, Iran, Nigeria, and the Philippines - could join the list in the next 20 years.
No one could predict that O'Neil's invention of the acronym "BRIC" in 2001 would inspire the leaders of the four countries to gather annually. But could O'Neil's invention of this new terminology, "growth economies", motivate the leaders of these eight countries to form a new group to be called "Group of Growth Economies", or simply a new G8? Since Brazil, Russia, India and China have adopted the acronym BRIC, why shouldn't the eight "growth economies" do the same?
Indeed, the acronym "BRICS" has become a buzzword. But how to conduct academic research on the BRICS is also an issue for scholars around the world. At a BRIC conference in Macao in 2009, when South Africa was not included yet, one scholar talked about his country's unemployment rate, trade deficit, inflation, GDP growth, etc., and another scholar elaborated on his country's science policies.
Hearing these presentations, I could not believe that this was a BRIC conference. In essence, the BRICS was created in order for world leaders to learn how to deal with global issues. It makes no sense if scholars and leaders from BRICS countries only discuss domestic problems. I sincerely wish the next BRICS summit can invite leaders of other emerging economies so that there will be more representation from the entire whole Third World camp.
The author is a columnist with China.org.cn. For more information please visit http://www.keyanhelp.cn/opinion/jiangshixue.htm
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