BRIC, a thoughtful grouping acronym for Brazil, Russia, India, China, and South Africa, grabbed international attention when renowned economist and chairman of Global Sachs Asset Management, Jim O’ Neill, introduced this acronym in his paper almost 15 years ago. BRICLab is now well known platform at School of International and Public Afair (SIPA), Columbia University. Last month on February 12, 2016, fifth BRICLab conference was hosted where two separate panels not only discussed BRICS market, its growth with reference to geonomics and geopolitics but panelists also shared their honest thoughts on, “what happened to BRICS, a non-political consortium of countries sharing same stage of newly advanced economies, once referred as BIG 4s ready to drive global economic power away from G-7”, and “ what will or may happen in future?”. It was a well-spent time in artistic and GREEN Low Library Rotunda and one of those meetings from where I left with lots of thoughts and perspectives.
Talking about take-away of conference, there is no doubt that China has managed to grow her economy unprecedentedly and exponentially and as one of panelists Gregory Bedrosian commented that now there is nothing like BRICS market or emerging markets, those are just Markets. He set a tone of discussion right from the beginning that it is China’s growth and market which can be discussed against BRIS, later to which Robin Wigglesworth debated if China is driver or component of Global economy. It is no secret that business cycles and commodity pressures are making Brazil and Russia suffer. Structural slow-down being predicted for China, yet with 6-7% growth, was also discussed by Yuan “Lawrence” Tian, a pioneer of modern financial system in China. He discussed how Chinese economy may need to be restructured to address supply chain reforms, rising internet based industry where only on evening on New Chinese year 3 billion RNBs were transacted through social media app ReChat, and China’s growing population of young entrepreneurs, many of those highly educated in international institutes and eager to return for their dream innovative startups. India stays on front of positive expectations, promoting fresh architect of current financial reforms, given political system permits. South Africa has incredible potential but not growing.
Today when BRICS has surprised everyone by becoming an institution, it has been also emerging more of a global tool in brainstorming to set global strategies for countries to cooperate, to monitor global governance systems and create joint global economic order, or as Jan Svejnar emphasized consolidating multipolar world to be reason behind BRICS 2.0 in 2016.
Sitting there, listening to hard financial geo-political facts from speakers on behalf of those countries having veto power, countries who also happen to be nuclear powers and represent 40% of world’s population, it was hard not to wonder what role these countries has to play in non-discriminatory trading and financial system and address the special needs of least developed countries. And most of all before addressing to special needs of other countries can this group of countries address special needs of each other and help India, Brazil and Russia purge up for 0% growth in terms of dollar in last 5 years. There is no doubt that in new world economic order where gravitational center of economy is shifting, engaging China in policy coordination in such way that it affects currency and fiscal market is inexorable. However, this emerging role will call for greater responsibility to improve trade-climate for developing and least developed countries.
I can see how global market and financial analysts and economists are worried about China’s soft landing or hard landing in upcoming years and how it is worrisome. In addition, O’Neill surmised that by 2050 the combined economies of the BRICs would surpass those of the world’s current wealthiest countries. With 2050 yet to come and with knowledge that BRICS rise will depend on many factors, it is worth being optimistic. And let’s say theory of BRICS bouncing back does work out, it is not far-fetched debate to assess role that China, India or any of 5 countries has to play invigorating equality based financial systems. United Nation’s 8th millennium development goal points to this very fact. It will be very interesting to witness transitional journey of BRICS towards growth infused with willingness to promote global social justice through financial frameworks.