The
BRICS
is an international political association of leading emerging
economies,
arising out of the inclusion of South
Africa
in the BRIC
group in 2010. As of 2014, its five members are Brazil,
Russia,
India,
China
and South
Africa.
With the (partial) exception of Russia, the BRICS are all developing
or newly industrialized
countries (often called ‘emerging markets’ or ‘emerging
economies’, although at this point China, for
example, has clearly emerged!) with very high growth rates between
the end of the 1990s and 2010. They have large and till recently
fast-growing economies and significant influence on regional and
global affairs. As of 2016, the five BRICS countries represent 25 %
of the world’s land area, 41.1% of its population ( 3.14 billion,
but mainly China and India),
45
% of its workforce, and have a combined nominal GDP of $18.4
trillion (compared with US nominal GDP of $18.6 trillion), just over
24% of nominal world GDP (perhaps 30% in GDP PPP terms, $40 trillion)
a figure which is expected to continue to rise, although estimates
seem to vary a lot. Their share of nominal global GDP trebled in 15
years. In 2015 they also accounted for around 55% of the output of
emerging and developing economies, and
had
an estimated $4.4 trillion in combined foreign reserves (mainly
China).
However
intra-BRICS trade flows, though worth more today, have actually
declined as a percentage of total BRICS trade flows from 0.82% in
2001 to 0.70% in 2015
IMF
estimates of GDP, nominal and PPP per member for 2016 were: China
$11.3 trillion nominal and $23.1 trillion PPP, Brazil $1.8 trillion
and $3.2 trillion, Russia $1.27 and $3.9 trillion, India at $2.3
trillion and $9.5 trillion, South Africa $0.3 trillion and $0.80
trillion. Compared with the United States $18.6 trillion nominal and
$19.4 trillion PPP, European Union $17.1 trillion nominal and 20.8
PPP.
However, according to the World Bank per capita GDP nominal and PPP for 2015 was reported as: China $8,028 nominal and $14,450 PPP, Brazil $9,410 and $15,391, Russia $9,093 and $24,451, India $1,627 and $6,101, South Africa $5,724 and $13,209 (compared with US $56,116 nominal and $56,116 PPP).http://en.wikipedia.org/wiki/BRICS
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita
http://in.reuters.com/article/2013/03/26/brics-summit-factbox-idINDEE92P09120130326
http://www.treasury.gov.za/brics/sbe.aspx
http://www.mni-indicators.com/files/focus_on_brics_economic_growth.pdf
Their economies are said to be complementary rather than similar, since China and India are industrial and service producers, while Russia and Brazil are major energy and raw materials suppliers. However, ecoomic complementarity is limited by the low level of intra-BRICS trade mentioned above. Clearly their percentage of global GDP is likely to continue to grow in the long term, although other developing countries may achieve even faster growth rates. The BRICS group may expand its membership in response to this.http://articles.economictimes.indiatimes.com/2012-09-06/news/33650208_1_bric-countries-brics-share-punita-kumar-sinha
http://www.cfr.org/brazil/brics-summit-delhi-declaration/p27805
As we have seen, given their enormous populations the BRICS have relatively low average per capita income (particularly India) with large numbers of people still living in poverty.
According to OECD figures, with easy credit, rising commodity prices and favorable demographics (i.e. cheap labor) the BRIC(S) economies grew at a rapid pace from 2001 to 2010. In 2010, while central banks in developed markets were printing cash and lowering interest rates to breathe some life into their sluggish economies, Gross Domestic Product in Brazil, Russia, India, and China, expanded by 7.5%, 4.5%, 10.5% and 10.4% respectively.
However, according to the World Bank per capita GDP nominal and PPP for 2015 was reported as: China $8,028 nominal and $14,450 PPP, Brazil $9,410 and $15,391, Russia $9,093 and $24,451, India $1,627 and $6,101, South Africa $5,724 and $13,209 (compared with US $56,116 nominal and $56,116 PPP).http://en.wikipedia.org/wiki/BRICS
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita
http://in.reuters.com/article/2013/03/26/brics-summit-factbox-idINDEE92P09120130326
http://www.treasury.gov.za/brics/sbe.aspx
http://www.mni-indicators.com/files/focus_on_brics_economic_growth.pdf
Their economies are said to be complementary rather than similar, since China and India are industrial and service producers, while Russia and Brazil are major energy and raw materials suppliers. However, ecoomic complementarity is limited by the low level of intra-BRICS trade mentioned above. Clearly their percentage of global GDP is likely to continue to grow in the long term, although other developing countries may achieve even faster growth rates. The BRICS group may expand its membership in response to this.http://articles.economictimes.indiatimes.com/2012-09-06/news/33650208_1_bric-countries-brics-share-punita-kumar-sinha
http://www.cfr.org/brazil/brics-summit-delhi-declaration/p27805
As we have seen, given their enormous populations the BRICS have relatively low average per capita income (particularly India) with large numbers of people still living in poverty.
According to OECD figures, with easy credit, rising commodity prices and favorable demographics (i.e. cheap labor) the BRIC(S) economies grew at a rapid pace from 2001 to 2010. In 2010, while central banks in developed markets were printing cash and lowering interest rates to breathe some life into their sluggish economies, Gross Domestic Product in Brazil, Russia, India, and China, expanded by 7.5%, 4.5%, 10.5% and 10.4% respectively.
However,
the BRICS were eventually hit by the economic crisis of 2008 as it
reduced demand in developed economies. GDP growth rates for 2015,
2016 (estimated) and 2017(forecast) according to the World Bank were
Brazil -3.8%,
-3.4%,
0.5% Russia -3.7%,
-0.6%,
0.5% India 7.6%, 7.0%, 7.6%, China 6.9%, 6.7%, 6.5% and South Africa
by 1.3%, 0.4%, 1.1%. So China’s growth has cooled significantly
from the double digits rates of previous years. India is still doing
well. South Africa is growing at a very modest rate. However, Russia
and Brazil have been and remain in serious difficulty and facing
recession, due to falling oil and commodity prices and inflation
(15.8% in Russia in August 2015 (but down to 4.5% in January 2017)
and 9.5% in Brazil in August 2015 (down to 4.7% in September 2017).
Interest rates in Russia stood at 10.0% in February 2017 and at
12.25% in Brazil. Russia is also facing sanctions from the US and EU
and other countries as a result of the Ukraine crisis.
All
this is in sharp contrast with previous performance over the last 20
years:
Average
Growth in the past
Russia
3.6% (1996-2015), India 6.01%(1951-2015), China 10.92.% (1989-2015),
South Africa 3.03% (1994-2015), Brazil 3.01% (1991 to 2015).
However,
according to many sources, prospects for the BRICS’ future
long-term growth, appear good and, compared with many of the most
developed economies, two of the BRICS, China and India, are still
doing very well. (We will need to see if significant long-term gaps
in growth rates open up between the BRICS members.) Moreover, if
their economies have slowed down simply as a result of the world
recession and if the global economy begins to recover their growth
rates may return to previous levels. On the other hand, some experts
argue that they may face real challenges relating to structural
problems within their domestic economies and political systems. See:
and
the longer articles from Foreign Affairs cited at the end of this
post.
We
should also note that some other developing economies may out-perform
the BRICS in terms of rapid GDP growth over the next decade. There is
the ‘N 11’ group, the ‘Next
Eleven’, Bangladesh,
Egypt,
Indonesia,
Iran,
Mexico,
Nigeria,
Pakistan,
Philippines,
Turkey,
South
Korea,
and Vietnam
according to Goldman
Sachs. However, they too now face seruous economic problems.
There
are also the TIMPS, Turkey, Indonesia, Mexico and the
Philippines, a group which in 2010 was beating the BRICS by almost
every economic measure. Will
such countries be invited to join the BRICS group at some point or
are they in competition with the group’s members? Will they really
be able to sustain GDP growth?
At
all events, the BRICS group is here to stay and clearly represents a
growing movement towards a more multipolar world economic order and
the BRICS summit in New Delhi in March 2012 outlined some of their
goals.
The
reform of global economic governance
– They want to move forward with the revision of the quota
mechanism for governance of the World Bank and IMF in order to
reflect the growing economic weight of developing countries and
emerging markets.
Trade
and Development
– They would welcome a new global reserve currency as an reliable
alternative to the dollar. For the moment they also want to boost
intra-BRICS trade using their own currencies (instead of dollars) in
order to compensate for a drop in demand due to the global recession
and falling US/EU demand (and protect their national currencies from
financial crises), and to link up their stock markets. Moreover, they
have expressed a willingness to try to help Europe face the current
crisis.
Above
all, they examined the idea of setting up a new development bank,
whose aims would include funding development and major infrastructure
projects initially in BRICS countries, but perhaps eventually in
developing and
least developed countries too; lending, in the long term, during
global financial crises such as the Eurozone
crisis;
and issuing convertible
debt,
which could be bought by the central banks of all the member states
and hence act as a means of risk-sharing.
Foreign
policy
– In 2012 at the BRICS New
Delhi
summit, then President
of China
Hu
Jintao
described
the BRICS countries as defenders and promoters of developing
countries and a force for world peace. At the summit the BRICS
criticized the West’s pressure on Iran and its attempts to convince
other countries to restrict their trade with Iran, and said that
dialogue was the best way to resolve the nuclear question. The group
took a similar position on Syria, against military intervention, and
in general emphasized the dangers of a war in the Middle East and the
fact that it would immediately lead to a rise in oil prices. The deal
with Iran was welcomed by the BRICS but Russia itself moved to
intervene in Syria.
AT
the BRICS summit in Durban in March 2013, further progress was made
with the approval of the plans to create development bank. Russia,
Brazil and India agreed to contribute $18 billion to the BRICS
currency reserve pool, China $41 billion and South Africa $5
billion.)
At
the July 2014 sixth BRICS summit in Fortaleza, Brazil the group
signed a document to create the $100 billion funded New
Development Bank
(NDB) and a reserve currency pool worth an additional $100 billion to
help make currency transaction more diversified, stable and
predictable and
to act as “a kind of mini-IMF”. The NDB opened in July 2015. The
NDB’s headquarters are in Shanghai,
the institution's first president is from India, the bank's first
regional office is in Johannesburg,
the
inaugural chairman of the board of governors is from Russia and the
first chairman of the board of directors is from Brazil. The
presidency, with a term of five years, will rotate among the members
of the BRICS.
However,
the BRICS’ NDB may be overshadowed by the other new Chinese-based
multilateral lender, the Asian Infrastructure Investment Bank (AIIB),
which is headquartered in Beijing. China is its biggest shareholder
with about 30%, according to the legal framework signed by 50
founding member countries. It opened for business on 16 January 2016
. Major European and Asian economies, including Germany, Italy,
Britain, France, Russia, Australia, and South Korea have joined the
AIIB, but the US and Japan, two of the world’s largest economies,
have declined to do so.
Some
Chinese leaders have also talked of the need to prepare for a
'de-Americanised' world economy. However, Chinese Finance Minister
Lou Jiwei played down the competitive aspect (2015). The new banks
can offer an alternative to the World Bank, the International Fund
and the Asian Development Bank and can be seen not as competition to
the existing system but as complementary and a way for China to
reinvest productively some its vast $4 trillion foreign-exchange
reserves.
The
7th
BRICS summit
was held in the Ufa in Russia Russiaof
Ufa in July 2015. The
summit coincided with the entry into force of constituting agreements
of the New
Development Bank and the BRICS
Contingent Reserve Arrangement
The
2016
BRICS summit
was held from 15 to 16 October 2016 in Goa, India. It condemned
terrorism, recognised the difficulties for the group created by the
global recession and underlined the importance of cooperation with
and work within traditinal global institutions like the WTO.
https://www.theguardian.com/world/2016/oct/16/narendra-modi-mothership-of-terrorism-pakistan-brics-goa
So
do the BRICS represent a fundamental change in the world order either
today, or in the near future or in the long term?
No
one doubts that the influence of these countries will continue to
grow. After all, as emerging economies, their growth rates were much
higher than those the developed economies averaged over most of the
last 20 years and although some of them face economic difficulties
now their prospects for the long-term future remain good. So the real
question is whether Brazil, Russia, India, China and South Africa
form a coherent group with a coherent set of interests which are
clearly opposed to those of the traditional ‘West’ or not. In
other words are all of these countries really outside the ‘West’
if we do not restrict the meaning of the term ‘West’ to a synonym
for NATO or fully developed economies? Are they a challenge to the
West’s leadership, or will all or some of these countries simply
become an integral part of it?
Much
of what the BRICS aim to do with regard to trade and development, as
outlined above, should simply be welcomed by the West and the UN.
Many Western NGOs and UN Agencies have been working towards these
development goals for decades, but with limited resources. A new
reserve currency alongside the dollar would make the international
financial system more stable, and the creation of the New Development
Bank should provide a way for countries like China to reinvest their
surpluses in various local and global projects and provide a further
global lender of last resort. How realistic all this is in the short
term is, however, less clear given the weakness of the Russian and
Brazilian economies and the fears of a possible recession in China.
Population
trends within the BRICS also differ significantly. The population of
China continues to grow, but slowly (0.44% per year 2013) and is
predicted to reach 1.4 billion in 2030 and then to go into decline
with an already aging population. India’s population is youthful
and expanding at 1.25% annually and will probably overtake China as
the world’s most heavily populated state by 2030. Brazil’s
population growth rate was also high in previous years but fell to
0.80% in 2013, while the population in South Africa has actually
fallen slightly in the last few years (-0.48% in 2013). After the
break-up of the Soviet Union Russia’s population fell significantly
for more than a decade but may now be starting to recover.# These
trends impact GDP growth rates and social welfare costs in the future
making forecasts difficult to make and suggesting growing divergence
among the members of the group.
Commentators
also point out that there are already real differences and potential
divisions and weaknesses among the group’s members which will
inevitably affect the coherence and effectiveness of the group in
responding to any particular issue, and the ultimate objectives of
each of its members. Here are a few of them:
Russia
and China are permanent members of the UNSC with veto power. They
initially did not seem in a hurry to support India, Brazil and South
Africa with more than words in any bid to obtain permanent seats on
the Council and do not support attempts to reform the SC by
eliminating or reducing the scope of the veto power. The Durban
Declaration included this sentence:
In
this regard, China and Russia reiterate the importance they attach to
the status of Brazil, India and South Africa in international affairs
and support their aspiration to play a greater role in the UN.
This
seemed to stop short of unconditional support for seats on the UNSC
for Brazil and India, but in August 2015 Russia finally expressed
clear support for permanent seats for Brazil and India:
Latest
https://www.rt.com/news/315510-un-security-council-reform/
However,
it seems likely that Russia and China will use their position and
their vetoes primarily to forward their own interests, as they
perceive them, rather than the interests of the BRICS or the
interests of the majority of developing nations in the General
Assembly. For example, after the start of the Syrian civil war in
2011 China and Russia were ready to block any resolution on Syria on
the SC, like that proposed by the Arab League in Feb. 2012 and
approved by the UNGA by 137 votes to 12 with 17 abstentions, which
could have opened the door to outside intervention or simply called
for the current regime to step down. In contrast, when Russia decided
to launch its own air strikes into Syria in September 2015, at the
invitation of President Assad, it is not clear if it first informed
and coordinated its action with its BRICS partners and sought
approval from them. Russia has used its veto to block criticism of
the Assad regime or of its own intervention. Currently China also
supports some form of intervention and says it is cooperating with
both Russia and the US.
Brazil’s
President Rousseff criticized Russia over its intervention in Syria
in Oct 2015.
India
accepts Russia’s intervention but argues that any long-term
solution must be political.
China
is, of course, a one-party state with regional ambitions, perceived
as a threat by several of its democratic and non-democratic neighbors
who have turned to the US for support. Russia is, although formally a
democracy, an authoritarian state and one with substantial military
power. By contrast, Brazil, India and South Africa are all
functioning (or dysfunctional!) democracies, with a variety of
problems relating to the very poor, but sharing many ‘Western’
values. India has border disputes with China and is also involved in
the dispute over the status of Tibet (a ‘domestic’ Chinese issue
for the Chinese, as is Taiwan). So while the BRICS appear to
represent a calming force in international relations, in favor of
conflict resolution through dialogue and against military
intervention and regime change, something that the West, or at least
large sections of Western public opinion, probably welcomes after the
long and costly campaigns in Iraq and Afghanistan, it is not clear
that this respect for every nation’s sovereignty will be
universally accepted and approved of by public opinion around the
world, by all the members of the UNGA and by public opinion within
the democratic BRICS themselves. Humanitarian intervention remains a
subject of heated debate within as well as between countries, experts
and ordinary people. Some argue that a situation like Syria requires
international action. Others argue that the humanitarian costs of
intervention may easily outweigh the gains. It would be an
oversimplification to see this as a division between an aggressive
NATO and a peaceful BRICS. Opinion in the West was always divided
over the non-UN mandated operation in Iraq, but also over the
UN-mandated interventions in Afghanistan and Libya. At present it is
the BRICS who seem out of step with opinion in the Arab world and the
General Assembly on Syria, while the West seems out of step with
opinion in the GA on the Palestinian problem. Now that Russia has
decided to intervene in Syria it will be interesting to see the
reaction of its BRICS partners and the level of cooperation between
Russia and France (after the Nov. 2015 terrorist attack on Paris),
the EU, the US and other Western countries.
Each
of the BRICS also faces serious domestic challenges (mainly relating
to inequalities of wealth and widespread poverty)
and
these, together with growing regional commitments may take precedence
over aspirations to play a more global role in international
relations. For example, Brazil in 2015 has seen widespread protests
by the poorest sections of society, with people saying that they have
not benefitted from GDP growth, that money has been wasted on the
Olympics and World Cup and calling for the government to do something
about economic inequalities and widespread bribery and political
corruption. This scandal has led to the opening of impeachment
proceedings against president Dilma Rousseff in December 2015.
Meanwhile
South Africa faced a currency crisis related to accusations of
cronyism against President Jacob Zuma. So the BRICS may have to focus
more on domestic affairs than foreign affairs.
Finally,
one should note that the BRICS are not really like the old Communist
bloc, which defined itself by its opposition to the West and to
capitalism. (Perhaps politically it has been more similar to the old
Non-Aligned Movement of the Cold War period, of which India was a
member – at least until Russia’s increasingly proactive foreign
policy). Economically, there is no clear division between the ‘West’
and the BRICS. In both groups we find a range of approaches to
managing the economy, those that adopt a more free market approach,
those that belief in government supervision and those that believe in
a welfare state – and varying proportions of all three.
Politically, like with the rest of the world, the BRICS countries
have their national interests and will no doubt seek to protect them,
but there is no basic ideological division between the West and the
BRICS. (China is hardly recognizable today as a ‘Communist’ state
in terms of economic policy). China and Russia are authoritarian
states but they are part of an international community based fairly
solidly on Western liberal democratic values that they do not wish to
challenge publicly (although they may violate them) and which shows
no signs of losing its appeal to the majority of people around the
world. Brazil, South Africa and India are active supporters of this
community’s values. In fact, one might hope that both Russia and
China will conform to those values in the long term, evolving slowly
towards a more democratic and rights-based society. Thus a more
multipolar world with a more diffuse leadership does not necessarily
mean a weaker West, but perhaps simply a more inclusive and wider
definition of that idea. Alternatively, we may see the BRICS acting
together on economic issues, and also negatively to block, discourage
or restrain what they perhaps see as Western adventurism as regards
military interventions (for humanitarian reasons) in other countries,
but much less able to agree a positive, proactive line in foreign
policy due to their different political systems.
#
According to an official
estimate
for 1 January 2015, the population of Russia is 146,270,033.
With
the 2014
annexation of Crimea by the Russian Federation
in a move condemned by many countries as illegal
Russia
occupied additional territory with 1,965,200 inhabitants.
New
citizenship rules allowing citizens of former Soviet countries to
gain Russian citizenship have gained strong interest among Uzbeks. So
the population could return to levels seen just before the breakup of
the Soviet Union as well as resolve problems of statelessness.
The population hit a historic peak at 148,689,000 in 1991, just
before the breakup
of the Soviet Union,
but then began a decade-long decline, falling at a rate of about 0.5%
per year due to declining birth rates, rising death rates and
emigration. The decline slowed considerably in the late 2000s, and in
2009 Russia recorded population growth for the first time in 15
years, adding 23,300 people. Key reasons for the slow current
population growth are improving health care, changing fertility
patterns among younger women, falling emigration and steady flows of
immigrants from the ex-USSR countries.
Other
sources suggest that the population continues to decline (-0.17% in
2014) for a current total of 142,833,689.
However,
with the 2014
annexation of Crimea by the Russian Federation
in a move condemned by UN as illegal
Russia
began occupying additional territory with 1,965,200 inhabitants.
Thus, according to an official estimate for 1 January 2015, the
population of Russia is 146,270,033.
I
think the following article expresses a very reasonable, balanced
position:
Sources
:
for
the group without South Africa
then
See
also:
Three
longer articles from Foreign Affairs:
long-term
growth
also:
