(Online Course) Essay Writing Skills Improvement Programme: Relevance of BRICS

Part B – Essays on National & International issues

Relevance of BRICS

The BRIC (Brazil, Russia, India and China) idea was first
conceived in 2001 by Goldman Sachs as part of an economic modeling exercise to
forecast global economic trends over the next half century; the acronym BRIC was
first used in 2001 by Goldman Sachs in their Global Economics Paper No. 66, “The
World Needs Better Economic BRICs”. BRIC Foreign Ministers at their meeting in
New York on 21st September 2010 agreed that South Africa may be invited to join
BRIC. Accordingly, China, as the host of 3rd BRICS Summit, invited South African
President to attend the Summit in Sanya on 14 April 2011 with the concurrence of
other BRIC Leaders. The BRICS countries – originally Brazil, Russia, India, and
China, and now South Africa – have turned out to be a source of global economic
development and essential to future generations. The center of global economic
activity is shifting from industrialized nations in the west to emerging
economies in Asia, Africa, and Latin America. South Africa joined BRIC at the
end of 2010. And Indonesia should be included in BRICS to represent the large
developing countries that are increasingly central to global production and
consumption.

BRICS is used in economics to refer to the combination of
Brazil, Russia, India, and China & South Africa which make up over 48% of the
world’s population. These nations are going to play a major role in the future
of global economy. In 2000, the four countries in BRIC (along with Indonesia),
contributed just 18 percent of global GDP, while industrialized nations
contributed about 65 percent. By 2010, BRIC countries provided more than a
quarter of the world’s GDP, at 27 percent. The rich countries’ share had shrunk
to 56 percent. Between 2000 and 2010, BRIC’s GDP grew by an incredible 92.7
percent, compared to a global GDP growth of just 32 percent, with industrialized
economies having a very modest 15.5 percent. The rising importance of BRICS
economies can be seen in the growth of imports. Their import and service
demands, at over $2 trillion, accounts for 13.5 percent of global imports, up
from just 6 percent 10 years ago. This represents a 277 percent growth in
imports. Global growth of imports during the same period was just 92 percent,
while imports in industrialized economies grew only 72.3 percent.


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BRICS countries have also diversified their source of imports
and are trading more with other large emerging economies and developing
countries. They play an important role in the global economy, and their role in
the future of global economics seems more evident. In the area of new
businesses, the market capitalization of BRIC companies grew from $1.2 trillion
to $6.4 trillion between 2000 and 2010, a massive 641 percent increase. Their
companies now account for over 18 percent of global market capitalization, up
from a very modest 3.8 percent in 2000. If this trend continues, by 2025, BRICS
companies will account for more than half of global market capitalization.
Demographic shifts are taking place and BRICS states, especially India and
China, will have much of the world’s youth, a driving force behind growth of
consumer spending and innovation.
Their large domestic markets will create economies of scale that make BRICS’
geographies central to global production and demand. And they will emerge as
centers of innovation and new product development. India-China ties have
undergone a significant change in the last two decades: They are broader and
with more substance. A key element of that is the economy. China has gone from
insignificant player to India’s largest trade partner with, $62 billion of goods
traded in 2010. Indian manufacturing and IT companies are making serious moves
in China, and demonstrating their ability in high-tech engineering, software
development, banking and foreign exchange trading.

BRICS countries will need to work together closely to evolve
strategies for the future. This could include cooperation in a wide variety of
issues like energy, food security, access to natural resources, climate change,
global governance, and international trade policies. What is essential to
maintaining this wide-ranging cooperation is for BRIC countries to have a stake
in each other’s economy. And increasing trade and business relations among them
is a major part of that.

The Fourth BRICS summit was held in New Delhi on 29 March
2012. The theme of the summit was BRICS partnership for Global Stability,
Security and Prosperity. The summit was participated by India, Brazil, Russia,
China and South Africa. At the end of the summit, Delhi Declaration was issued.
Development banks of BRICS signed two agreements- i) Master agreement on
extending credit facility in local currency. ii) BRICS Multilateral letter of
credit confirmation facility agreement. The five participating banks are Banco
Nacional de Desenvolvimento Economico e Social- BNDES, Brazil; State Corporation
Bank for Development and Foreign Economic Affairs-Vnesheconombank of Russia;
Export-Import bank of India; China Development Bank Corporation, and Development
Bank of Southern Africa. These two agreements are expected to enhance
cooperation among the BRICS development banks and to significantly promote
intra-BRICS trade.

Highlights of Delhi Declaration

  • BRICS nations agreed on the reform of IMF and world bank.
  • Brazil, India, China and South Africa congratulated the Russian
    Federation on its accession to the WTO.
  • BRICS nation said they were committed to playing their part in the
    global fight against climate change and will contribute to the global effort
    in dealing with climate change issues.

In the New Delhi summit, leaders of the BRICS group
[Thursday, 29 March 2012] pressed Western powers to cede more voting rights at
the IMF this year and flayed the rich world’s reflationary monetary policies for
putting global economic stability in jeopardy. Promised changes to voting rights
at the IMF have yet to be ratified by the United States, adding to frustration
over reform of the G7 and the U.N. Security Council, where India and Brazil have
been angling for years for permanent seats. The BRICS leaders also accused rich
countries of destabilizing the world economy five years into the global
financial crisis by creating excessive global liquidity. It also recognised the
right of Iran to pursue peaceful nuclear energy. They said that the crises over
Iran’s nuclear programme should be resolved diplomatically and should not be
allowed to escalate.

China hopes the summit will continue to display the BRICS
spirit of unity and win-win partnership, continue to enhance coordination and
cooperation on global economy, finance, development and other major issues of
common interest, push forward practical cooperation in various fields, send a
joint message of confidence for world economic stability and recovery, provide
impetus for improved global economic governance and make a contribution to
common development in the whole world. We also hope the summit will help
strengthen institutional building of BRICS cooperation, map out plans for the
future, and lay a solid foundation for the long-term growth of BRICS
cooperation. Currently, a large number of emerging markets and developing
countries have achieved rapid economic growth and become an important force in
promoting world peace and common development. Firmly committing to the path of
peaceful development, cooperative development and harmonious development, these
countries form an important part of common development of the world, which is
conducive to a more balanced world economy, more reasonable international
relations, more effective global governance and more durable world peace.

Since the outbreak of the international financial crisis in
2008, these countries have spearheaded the global recovery through their own
development. The steady increase of their representation and the greater say
they acquired in global economic governance have moved the international order
in the direction of greater fairness and rationality. What has happened
testifies once again that without the rise of emerging markets and developing
countries, there will be no universal prosperity in the world; and that without
the stability of these countries, there will be no world peace and stability.
The development of these countries has a constructive impact on the
international landscape. The international community should look at these
countries from a long-term and strategic perspective and actively support their
development.

BRICS countries are the defender and promoter of the
interests of developing countries. In their cooperation, BRICS countries have
committed to promoting South-South cooperation and North-South dialogue,
endeavoured to implement the U.N. Millennium Development Goals, worked for early
realisation of the goals set out in the mandate for the Doha development round
negotiations, strived to secure a greater say for developing countries in global
economic governance and fought all forms of protectionism. Cooperation among
BRICS countries is made necessary by the ongoing economic globalisation and
democratisation in international relations. It is consistent with the trend of
the times characterised by peace, development and cooperation, and fully
conducive to building a harmonious world of durable peace and common prosperity.
As for BRICS practical cooperation in the near future, China wants to see
efforts made in the following two areas: First, building a solid foundation. We
should beef up the existing cooperation programmes in the spirit of practicality
and efficiency and build a number of flagship projects. Second, being
innovative. We should properly explore new areas of cooperation in light of the
needs of economic and social development in BRICS countries, tap the cooperation
potential and inject new vitality into the mechanism of BRICS cooperation.

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