This week, the world’s most powerful emerging economies hold their annual summit in Brazil. The five nations, Brazil, Russia, India, China and South Africa, go by the acronym “BRICS.” They include four of world’s top ten economies. The World Bank says China will probably overtake the United States as the world’s number one economy before the year is out. Nathan King previews the summit.
BRICS: Gathering of five of world\'s most powerful economiesThis week, the world's most powerful emerging economies hold their annual summit in Brazil. The five nations, Brazil, Russia, India, China and South Africa, go by the acronym "BRICS." They include four of world's top ten economies. The World Bank says China will probably overtake the United States as the world's number economy before the year is out. Nathan King previews the summit.
As the excitement of the World Cup comes to an end, another group of nations from the four corners of the earth will be in the spotlight this week in Brazil, host to the six annual BRICS summit.
They started out as “BRIC,” minus the “S”– an acronym coined by Goldman Sachs economist Jim O’Neil back in 2001. The “S” in “BRICS” — South Africa” — was added later.
“It was a branding invented by an investment bank to sell higher risk assets, but it became something else,” said Paulo Sotero, Director of the Brazil Institute at the Wilson Center.
After the 2008 financial crisis, the BRICS nations pushed for global financial reform, suggesting the group was more than just a label. Critics say little else unites them.
Economically, the nations are split between two big commodity importers — India and China — and three big commodity exporters — Russia, Brazil and South Africa. Some are more developed than others, and they sometimes have competing national interests.
At last year’s summit in Durban, South Africa, the group failed to agree on the details for their own development bank with $50 billion in funding. It’s hoped that this year the bank, a lending facility for developing nations with around a $100 billion in funding, will become a reality.
While that sum pales next to the assets held by the 188 members of the International Monetary Fund or World Bank, the group’s strength may be its lack of entrenched policies, giving BRICS countries more flexibility as they collectively challenge an old world order for dominance in the 21st century.
In fact, the BRICS could soon face competition from another group of emerging economies that economist Jim O’Neill calls the “Next Eleven” with countries that include Iran, Indonesia, Mexico and Turkey.
They may not be fully-fledged global groupings, but they provide structure for rapidly developing economies, seeking alternatives to the global status quo.