You’ve heard it before: BRICS will never be a threat to the West; BRICS will not transform into a political grouping; BRICS are a purely economic entity; most BRICS economies are in trouble. Well, it’s time to ‘unhear’ it all.

A search on Google Trends shows searches for the word BRICS increasing more than 12 times during the 10-year period from July 2005 to July 2015. Clearly, the group is gaining in popularity but there are a lot of incorrect assumptions being made about it – largely in the western media but also by their camp followers in the emerging countries.

Here are five facts that will clear the air about the BRICS.


BRICS now a full fledged organization

BRICS economies are not sputtering

Here’s a staggering statistic – China used more cement in the last three years than the United States used in the entire 20th century.

Bloomberg reports the combined economic output last year of the BRICS almost matched America’s GDP. But just eight years ago, the US economy was double the size of the BRICS.

The above statistics are an indication of the frightening pace at which the five BRICS countries are catching up with – and in some areas pulling ahead of – the West. Predictions that the Indian and Chinese economies would overtake the US in 2040 or 2060 are being revised to the 2020s. This is because of twin trends moving in tandem: steady – albeit slow – growth in the BRICS plus the western economies moving in reverse gear.

So don’t believe those economists and experts who point to Russian, Chinese and Brazilian economies losing their sheen. When they declare China’s dream run is over because the Chinese economy grew “only” 6 per cent, they don’t realise that figure translates into $1 trillion (PPP), which is the size of the Australian economy. And that’s in a bad year.

Gloves are off, politically speaking

Russian President Vladimir Putin said at Ufa that the coming together of the BRICS, SCO and EEU can provide a “powerful economic breakthrough”. However, the bigger picture is instead of being ‘merely’ economic or political, the BRICS are waltzing to strategic, long-term ties.

Unlike previous meetings that were focussed on laying the groundwork for partnership among the five members, the seventh BRICS summit at Ufa marks the milestone where the BRICS signalled their intention to shift the world’s centre of gravity away from the West.

Because the acronym has its origins in the world of finance, many observers view the BRICS as an economic grouping. When the BRICS stock markets were on fire, finance gurus talked them up to the sky. But since nothing grows to the sky and these economies are not performing up to expectations, the BRICS are being written off.

Also, the western media often refers to the complete lack of homogeneity in the BRICS as if racial similarity was a precondition for unity. It also never fails to mention the India-China rivalry and border tensions that stand in the way of a true union.

Hot topic: BRICS

But the BRICS group is not only an economic entity. At Ufa has expanded into the political arena so that the economy was just one of the agendas – among several – at Ufa.

The wide-ranging, punitive and illegal economic sanctions slapped by the West against Russia have given Moscow and Beijing the Goldilocks moment – not too early, not too late, but the perfect opportunity – to pitch BRICS, the Shanghai Cooperation Organisation (SCO) and the Eurasian Economic Union (EEU) as the core of a new international order.

That economic sanctions are a really harebrained scheme is now being realised by the hotheads who imposed them. Sanctions haven’t burned Moscow but they are hurting Europeans, who were already reeling under joblessness and faced tough future prospects. Sadly for them, Russia is leading the BRICS towards an alternative ecosystem as an insurance against western economic blackmail.

No more loan sharks

The BRICS now have the answer to the American loan sharks, the World Bank and the International Monetary Fund (IMF), which have been responsible for the economic enslavement of a number of developing countries. With its HQ in the financial powerhouse of Shanghai, the New Development Bank (NDB) has just held its first board meeting and will soon be lending internationally.

The NDB and the China-led Asian Infrastructure Investment Bank – in which all BRICS countries are founding members – will break the monopoly of the World Bank and IMF and could make their functioning more transparent. “It will motivate the IMF and the World Bank to function more normatively, democratically and efficiently, in order to promote the reform of international financial system as well as democratisation of international relations,” said China’s official newspaper Global Times in an article titled "BRICS cooperation helps to build new international framework".

So the next time American and British intelligence agents – embedded within the IMF or World Bank as “consultants” – want to sabotage the economy of a free-minded developing country or assassinate a nationalist leader or an honest bureaucrat, the chances are they will be asked to stand down by the bankers. Competition – like money – talks in a language everyone understands.


India pushes for greater facilitation of trade within BRICS

Bye-bye sanctions

The NDB – aka BRICS Bank – will start off with a capital of $50 billion which will be hiked to $100 billion in two years. Headed by India’s K.V. Kamath, the bank is just what the doctor ordered for large Russian enterprises such as state oil company Rosneft, private gas producer Novatek and Russia’s biggest bank, Sberbank, that are impacted by sanctions.

However, according to Kamath, the NDB should not be viewed as a tool to help sanctions-hit companies but said the bank would look at requests from Russian companies. “We are not looking at it in that context at all,” he told Reuters.

Guess what, Kamath or not, Russian firms will be queuing up at the NDB.

Hellenic Hellhole vs order in the Urals

Success has a lot to with public perception. The eastern nations are the ones supposed to be divided and squabbling, but for weeks the world has been witnessing the westerners slug it out in an ugly family drama gone viral. While BRICS leaders attending their summits appear to walk with the bearing of conquerors, European politicians are battling furious public protests.

At Ufa in the Urals, as the leaders of the BRICS calmly presented their drafts for a new world order, in the Hellenic Hellhole that is Greece, overbearing and overfed Germans were shoving austerity down the throats of hungry Greeks reeling under 50 per cent youth unemployment.
Such perceptions can directly impact financial flows, which tend to gravitate towards markets and economies that are secure and stable. Where would you like to keep your hard earned millions – in turbulent Europe, racially divided America or the comparatively calmer BRICS?
The opinion of the writer may not necessarily reflect the position of RIR.



The BRICS Summit: A Look at Some of the Issues

Posted: Updated: 
XI JINPING PUTIN MODI








NEW DELHI -- The BRICS summit in Ufa, the capital of the Russian republic of Bashkortostan, this week brought together the heads of government of Brazil, Russia, India, China and South Africa (BRICS) in what's already one of the world's most unusually interesting international groupings. Jokingly dismissed by some as the only world body invented by a merchant bank (BRICS was born in an emerging market analysis by Goldman Sachs' chief economist Jim O'Neill more than a decade ago), the five countries are taken increasingly seriously as a significant force in global affairs.

For one thing, they're too big to be ignored. It's not just BRICS' populations, which collectively account for nearly half of the human race. It's also their economies, which now add up in output to about the same as that of the U.S. and are well on course toovertake the entire G-7 before 2050. With that kind of clout, the BRICS countries have started to discuss new endeavors and common positions on international issues. BRICS is slowly emerging as an alternative forum to the dominant worldview of the established economies.

The key player, of course, is China, whose economic output is almost twice as large as the other four members put together, and whose role will be determinant in BRICS' global effectiveness. After decades of an almost isolationist approach to world politics, China has begun stretching its sinews on the world stage. Its economic interests span the globe, and Beijing seems to see merit in complementing these with an expanding array of partnerships with other countries. Some of these are unilaterally led, like its revival of the ancient land and maritime Silk Routes as a platform for Chinese trade and investment. But Beijing is also showing increasing interest in multilateral engagements with like-minded nations, partially to compensate for not having the role it believes it deserves in existing institutions like the World Bank and the IMF. This is where BRICS comes in.
China and Russia wish to legitimize greater government control over the Internet; India is an energetic advocate of Internet 'multi-stakeholderism.'


Or does it? The summit suggested a certain level of ambivalence on China's part. Whereas the other BRICS countries saw the summit as the highlight of their presence in Ufa, China seemed to treat it as something of a sideshow to the annual meeting of the Shanghai Cooperation Organization, of which it is the principal animating spirit.

It's already apparent that the five do not see all international issues in the same perspective. China and Russia are suspicious of liberal ideas, wary of information technology and decidedly unsympathetic to democratic dissent; India, Brazil and South Africa are lively democracies. It is unlikely, for example, that the five would see eye to eye on issues of Internet governance. China and Russia wish to legitimize greater government control over the Internet; India is an energetic advocate of "multi-stakeholderism."

On issues of development, Russia is the odd man out; China has largely eliminated mass poverty, while the other three still struggle with existential questions of survival for a significant proportion of their populations. Can they truly adopt a common view on global macro-economics, development aid and international resource transfers?
India hoped the summit would endorse its concerns about terrorism but China, mindful of its close links with Pakistan, the source of the terrorism that has targeted India, refused to play along.

BRICS has established a New Development Bank, headquartered in Shanghai and headed by one of India's most eminent private-sector bankers. But China's major priority remains the 57-member Asian Infrastructure and Investment Bank, of which India and Russia are the second and third largest stakeholders respectively (and to which Brazil and South Africa also belong). Since China will be the principal contributor to both institutions, is there any doubt as to which it will do more to bankroll?

Trade divides the group; a recent research report by the think tank Global Trade Alert points to the negative impact of the trade policies of individual BRICS members on each other. Commercial ties between them are still characterized by a lack of harmony and discriminatory trade distortions.

Global geopolitics, too, divides the BRICS countries. India hoped the summit would endorse its concerns about terrorism but China, mindful of its close links with Pakistan, the source of the terrorism that has targeted India, refused to play along. The summit declaration made no reference to U.N. Security Council resolution 1267, which India had hoped to use to bring pressure on its neighbor.
The five countries are unlikely to be able to take a joint position on any issue unless China wants it -- or at a minimum, is willing to go along.

On the other hand, Russia persuaded the others to sign up to language "condemn[ing] unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations," an oblique endorsement of Moscow's position on international sanctions over Ukraine.

These issues suggest that BRICS is still finding its collective feet and that some differences of nuance and even of perspective are still inevitable. Beijing realizes that China's weight is what gives ballast to BRICS, and the five are unlikely to be able to take a joint position on any issue unless China wants it -- or at a minimum, is willing to go along.

This will pose interesting challenges to the five on a range of global issues. To take a relatively minor example: As a state that has been aggressive in hacking into foreign websites, China has a position on cybersecurity that opposes that of Brazil, which protested bitterly at American snooping on its government and cancelled a presidential visit to Washington in protest. India, which could make a major contribution to the stewardship of the global commons with its expertise on issues ranging from cyberspace to outer space and which has its own suspicions of China, could well find itself out of step with BRICS' largest member.
To the extent that the West resists the claims of the BRICS members to places of honor on the world stage, the greater will be the incentive for those countries to consolidate their own alternative system and view of the world.



For now, the summit suggests the grouping has only begun moving in little steps. Aside from a Economic Cooperation Strategy proposed by Russia, the only concrete action plan came from India, which offered a "ten steps" program that is underwhelming in its lack of ambition -- a trade fair, a railway research center, audit cooperation, an agricultural research center, a sports council, a soccer tournament, a film festival and so on: hardly earth-shaking initiatives. These could either contribute to an environment of collective camaraderie on which bigger things could be built, or dribble into insignificance.

For now, BRICS remains an institution with great potential surrounded by considerable uncertainty. Its future impact on the world will in large part, however, be determined by those who weren't at the Bashkortostan capital -- the Western countries who dominate the existing post-1945 international system. To the extent that they raise the ramparts and resist the claims of the BRICS members to places of honor on the world stage, the greater will be the incentive for the BRICS countries to consolidate their own alternative system and view of the world.

It doesn't have to be that way. BRICS should ideally find their place within the framework of global structures that ensure all countries a fair deal in keeping with their size, capabilities and contributions to the international system.

Bricks can be used to build an equitable world order, or be thrown to shatter the glass towers of the existing system. The same can be said of BRICS.