Home > Boards > Free Zone > User's Groups > The BRICS Juggernaut

>>> Have the BRICS hit a wall?

Public Reply | Private Reply | Keep | Last ReadPost New MsgPrevious | Next
gfp927z Member Profile
 
Followed By 60
Posts 22,949
Boards Moderated 73
Alias Born 03/22/05
160x600 placeholder
Stock Futures Rise Ahead of Stimulus Talks Deadline
U.S. stock futures ticked up ahead of House Speaker Nancy Pelosi's Tuesday deadline for Congress to reach an agreement on a spending package to support American households and businesses through the pandemic.
UBS Nearly Doubles Profit on Strong Investment Bank, Wealth Management Units -- Earnings Review
Airbus and Israel Partner Win Maritime Aerial Surveillance Contract
UBS Profit Doubles on Trading Surge -- 2nd Update
Britvic Sees Fiscal Year 2020 Adjusted Profit Above Market Views; Cautions on Fiscal Year 2021 -- Update
Siemens Healthineers Plans to Invest EUR160 Million in India Innovation Hub
Sweden Bans Use of Huawei and ZTE Products in Critical 5G Infrastructure
Top Company News of the Day
Reckitt Benckiser Disinfectant Brands Drove 3Q Revenue Growth During Pandemic -- Update
Alibaba Takes 6.1% Stake in Travel Retailer Dufry
Britvic Sees Fiscal Year 2020 Adjusted Profit Above Market Views; Cautions on Fiscal Year 2021
AstraZeneca Granted US Priority Review for Early-Stage Lung Cancer Adjuvant Drug
Reckitt Benckiser's Disinfection Brands Drove 3Q Revenue Growth Amid Pandemic
Total Delivers its First Carbon Neutral LNG Cargo
UBS Profit Doubles on Trading Surge -- Update
Swedbank 3Q Net Profit Beat Views on Higher Income, Lower Costs
UBS Sets Aside Reserve for Buybacks After Strong 3Q -- Update
BMW 3Q Auto Segment Cash Flow Exceeded Expectations
UBS Sets Aside Reserve for Buybacks After Strong 3Q
UBS Publishes Agenda for Extraordinary General Meeting on 19 November 2020
Foxconn's Terry Gou Says Big Wisconsin Project Hinges on State Aid
3Q20 Net Profit USD 2.1bn, 21.9% Return on CET1 Capital
Ant Group Nears Giant IPO After Green Light From Hong Kong's Exchange
Moderna CEO Expects Covid-19 Vaccine Interim Results in November
gfp927z   Friday, 06/26/20 10:30:24 PM
Re: None
Post # of 82 
>>> Have the BRICS hit a wall?

China is the world's second-largest economy and is fast catching up on the US amid a trade war, while Russia is, well, still Russia. So, as the BRICS meet up, we ask what is the point of this oddly divergent group.


DW

Nov 13, 2019


https://www.dw.com/en/have-the-brics-hit-a-wall/a-51182058


BRICs leaders

Cooperation among the five BRICS (Brazil, Russia, India, China, and South Africa) has set an example of a new type of international relations, Chinese State Councilor and Foreign Minister Wang Yi said recently.

The BRICS meet this week in Brasilia under the banner of "Economic Growth for an Innovative Future," with a focus on strengthening cooperation in science, technology and innovation, enhancing cooperation in the digital economy, more cooperation in the fight against transnational crime, money laundering and drug trafficking.

Wang went on to say that the BRICS had served as a stabilizer in international volatility and an example of a new type of international relations. "The BRICS should continue to promote multilateralism, take the lead in safeguarding the international system with the UN as its core and uphold the purposes and principles of the UN Charter."

Great hopes

The acronym BRIC (then excluding South Africa) was created by Goldman Sachs' analyst Jim O'Neill in 2001 for the emerging powers he believed would be, alongside the US, the five biggest economies of the world in the 21st century. Nobel Prize laureate Michael Spence soon after predicted the BRICS would replace the US and Europe as the key engines of the world economy. In a decade, Spence predicted, the BRICS' share of global GDP would exceed 50%.

Read more: Russia's comeback in Africa

Lacking access to the top jobs in international financial and development institutions, the BRICS set up the New Development Bank (NDB) in 2014 to finance infrastructure projects in the developing world. The institution was intended to rival the US- and Europe-dominated IMF and World Bank and were explicitly aimed to break the West's hold on finance and development. The bank had a total authorized capital of $100 billion (€91 billion) and was open to all members of the UN.

China's growth comes at a cost

Four years after starting operations, it had a $10.2 billion loan book and is one of the word's biggest multilateral development banks. Since then, the bank has lent over $5 billion in 21 projects. The BRICS at the same time created a Contingency Reserve Arrangement which would be accessed by BRICS members in need of funds.

Divergence

BRICS makes little sense today, S&P Global Ratings said in an emailed note in late October. It said the BRICS had lost relevance due to their diverging long-term economic trajectory. The economic performance of China and India over the past two decades contrasts with poor results in Brazil, Russia and South Africa, whose shares of global output have shrunk since 2000. India and China have exceeded the rating firm's growth predictions since the turn of the century. Russia and South Africa have failed to meet them since about 2005, Brazil since 2010.

"The diverging long-term economic trajectory of the five countries weakens the analytical value of viewing the BRICS as a coherent economic grouping," O'Neill wrote recenly. "I myself have occasionally joked that perhaps I should have called the acronym 'IC' based on the clear disappointment of the Brazilian and Russian economies in the current decade since 2011, where both have clearly significantly under-performed compared with what the 2050 scenario path laid out."

The five countries' economic models and policies are also divergent, as are their credit ratings. China's has gone up four rungs on the S&P ladder to A+, while the others have never got that high: Russia and India are five steps below and South Africa and Brazil seven and eight below respectively.

Facts and figures

South Africa was the last to enter the bloc and is the smallest of the countries with a population of about 50 million, compared to the 143 million of Russia, the 1.2 billion of India, the 1.34 billion in China and the estimated 210 million in Brazil.

BRICS together represent 42% of the global population, 23% of GDP, 30% of the territory and 18% of trade. Combined, they are bigger than the eurozone and unless China slows dramatically, the collective size of the BRICS countries will soon be as big as the US. Over the past decade, the combined BRICS' GDP has grown 179% and total trade of the member nations has risen 94%. From 2008 to 2017, the world's average growth rate was around 1%, but that of BRICS nations was about 8%.

What's it for?

"The significant question will be: How and to what extent will the BRICS take the next step in underwriting the rules of the game in an international order that is seeking leadership and direction?" Sanusha Naidu, senior researcher, University of South Africa, asked this year.

Read more: Why India pulled out of the RCEP free trade deal

The first official summit in 2009, held in Yekaterinburg, Russia, came up with a short declaration containing 15 commitments, according to the BRICS Research Group, based at the University of Toronto and the Russian Presidential Academy of National Economy and Public Administration. According to the BRICS Research Group's analysis, they show a surprisingly high rate of compliance: 77% on average, The Economist calculated. China keeps its word the most; South Africa the least, the weekly reported.

The BRICS have retained a certain credibility as "middle power," but in 2019, with Brazilian president Jair Bolsonaro's new rightwing agenda coming into focus, the situation appears fluid. His Finance Minister Paulo Guedes was named chair of NDB in April.

But one should also bear in mind that three of the five leaders head very authoritarian states, some of those most keen on an alternative to the global dominance of the US: Xi Jinping, Vladimir Putin, Jair Bolsonaro and Narendra Modi.

<<<







Public Reply | Private Reply | Keep | Last ReadPost New MsgPrevious | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
X
Current Price
Change
Volume
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist
Consent Preferences