BRIC nations break new ground with lofty goals

• Source: Global Times
• [08:09 June 15 2009]
• Comments

Chinese President Hu Jintao (2nd L) arrives in Jekaterinburg, Russia, on June 14, 2009, for a summit of the Shanghai Cooperation Organization (SCO) and a meeting of BRIC countries, namely Brazil, Russia, India and China. (Xinhua/Lu Jinbo)

By Kang Juan in Beijing and Zhang Guangzheng in Moscow

Leaders of Brazil, Russia, India and China will meet tomorrow in Russia for their first summit in a move to look into a wide range of issues such as energy security, climate change and reform of international financial institutions.

Although the international standings of the four countries have been increasing, Chinese scholars downplayed the clout they now have on the world’s economic structure.

Chinese President Hu Jintao left Beijing yesterday for the annual summit of the Shanghai Cooperation Organization (SCO) and the first meeting of BRIC (Brazil, Russia, India and China) leaders in Russia’s Ural city of Yekaterinburg.

Leaders of the four countries have said they plan to discuss ways to reshape the world financial system and how to reduce dependency on the US dollar amid the global economic downturn.

Goldman Sachs economist Jim O’Neill first used the BRIC acronym in 2001 to describe the growing power of emerging market economies. Meetings of the four nations’ foreign ministers have been held since 2006, but tomorrow’s gathering will be the first at the head-of-state level.
The summit Tuesday in Yekaterinburg marks a step toward cooperation as a group, an AFP report noted.

BRIC countries account for 15 percent of the $60.7 trillion global economy, but Goldman Sachs predicts that in 20 years, the four countries could together dwarf the G7, and China’s economy will overtake the United States’ in total size.

“The upcoming meeting is to express hope for strengthening economic and financial cooperation in order to better equip themselves for the post-crisis period, and once again become the world’s major force of economic growth,” said Li Daokui, director of the Center for China in the World Economy at Tsinghua University.

 Political might not sought

Li, while admitting that BRIC has the potential power to change the world’s economic structure, noted that there are possible conflicts among BRIC members concerning issues regarding protectionism in international trade and attracting investment.

“The summit has a potential to become an annual meeting between the four emerging nations. But we have not yet found a long-time mutual interest among the countries, and their domestic politics are still developing, so it’s hard to say whether BRIC will become an influential world organization such as ASEAN,” Li said.

Yevgeny Yasin, a leading Russian economist, former Minister of the Economy and current head of research at the Higher School of Economics, was quoted by Russia’s RIA Novosti news agency as saying BRIC “will remain an informal club in substance and in form,” as the four developing countries are very different in terms of their development, economic structure and cultures.

Wang Yusheng, director of the Beijing-based China Foundation for International Studies, told the Global Times that BRIC countries are on their way to forming an institutionalized grouping, and they have overlapping national interests.

“Despite the discrepancies on ideological thinking and social systems and so on, the grouping of BRIC represents the burgeoning of emerging markets and would promote the development of multilateralism,” Wang said.

“It is their commonalities on respecting variety in development patterns and supporting a fair and just world, as well as economic orders, that make the grouping natural and necessary,” Wang added.
Some believe that the four countries could serve a temporary purpose – to prompt reform, even though it’s unlikely to form a kind of political alliance.

“I think BRIC as an institution is a very useful threat and inter-temporal political grouping to force more realistic change of global institutions,” O’Neill told Reuters, adding that the G8 should be reformed, with China, India and Brazil taking the places of eurozone members Germany, France and Italy.