- Posted July 16, 2014 by
The Future of the BRICS
After years of railing against the Western-dominated global financial order, a powerful bloc of the world’s emerging economies has finally done something about it. Emerging market countries decided to create association called as BRICS: Brazil, Russia, India, China, South Africa.
Today BRICS group does not represent a political coalition currently capable of playing a leading geopolitical role on the global stage, the panelists emphasized.Brazil, Russia, India, China and South Africa (BRICS) account for over 40% of the world’s population, 1/4 of the world’s GDP and are responsible for 55% of the global economic growth since 2009. The BRICS have raced onward in the face of the financial downturn and are poised to take a larger share of the global economy in the coming years. What will this mean for development, for the global push to reduce poverty, inequity and the so-called north-south imbalance of power. Some experts think not much, because the BRICS are more a concept than a cohesive force.
The recently published United Nations 2013 Human Development Report says that the BRICS are on track to overtaking the economies of the longstanding Western powers. The BRICS nations — Brazil, Russia, India, China and South Africa — formally introduced their long-awaited $100 billion development bank to be headquartered in Shanghai and a currency reserve of the same size, institutions that aim to be both competitor and antithesis to the World Bank and International Monetary Fund. The New Development Bank (NDB), announced at the sixth BRICS summit in Fortaleza, Brazil, has been billed as an answer to decades of grievances in the developing world about a global financial architecture that critics say the United States and Western Europe have exploited to enforce the subservience of the developing world. Totally i don't have any doubt that The BRICS bank will be one of the major multilateral development finance institutions in this world. This bank will be a best competitor of The World Bank. Unfortunately in last several years The World Bank became a international financial institution with huge corruption ties in many countries worldwide. Another development bank by BRICS is a second chance for the world economy to reduce currency hegemony of American Dollar and work for implementation and development of BRICS currencies especially Chinese Yuan and Russian Rubble. Here is another proof of strongest positions of Russian Rubble in future in Eurasia Union created by Russia and Post-Soviet Union Countries. Totally i have big hope and don't have any doubt that this unity will be a productive and maybe better than The World Bank or other international financial institutions like as EBRD, ADB and etc.
By 2020, according to projections developed for this Report, the combined economic output of three leading developing countries alone—Brazil, China and Russia —will surpass the aggregate production of Canada, France, Germany, Italy, the United Kingdom and the United States.
Today i can say that Russia and China is the only one of the emerging BRICS nations (Brazil, Russia, India, China and South Africa) that is likely to break out of the middle income trap.
First step of BRICS become to establish $100 bn bank a reserve currency pool worth over another $100 bn. Both will counter the influence of Western-based lending institutions and the dollar. BRICS represents 42 percent of the world’s population and roughly 20 percent of the world’s economy based on GDP, and 30 percent of the world’s GDP based on PPP, a more accurate reading of the real economy. Total trade between the countries is $6.14 trillion, or nearly 17 percent of the world’s total.
The $100 billion crisis lending fund, called the Contingent Reserve Arrangement (CRA), was also established. China will contribute the lion’s share, about $41 billion, Russia, Brazil and India will chip in $18 billion, and South Africa, the newest member of the economic bloc, will contribute $5 billion.
I don't know what will be a respond from US or other EU countries, but what i can say today is that world needs more players, more reforms and more stimulus to improve cost of living and economy worldwide