The rising prominence of BRICS

The heads of state of BRICS countries met for the fourth time at their annual summit, this time held in Delhi. The original BRICS countries are Brazil, Russia, India and China with South Africa joining later on. These countries belong to the category now described as emerging economies. The BRIC countries together represent over 40 per cent of the world’s population and approximately a quarter of the global economy at $13.5 trillion.

Although not yet a grouping powerful enough to bulldoze the developed countries, still being in its infancy, BRICS is however slowly beginning to indicate that a time will come when the grouping will leave its infancy behind and grow to be a strong entity.

One issue that BRICS has been pushing consistently is the need to overhaul the World Bank and the IMF. Traditionally, the US has been picking a US national as the World Bank head and the IMF has generally been headed by a European. At this year’s summit too, the heads of state reiterated their earlier calls for the selection of heads for these two organisations through ‘an open and merit based process.’

The implication of this is not merely a change in the process of selection, but an indication of how they intend to challenge the existing systems weighing heavily towards the developed countries.

Another development at the summit was that they put forward was the issue of having their own development bank, one that could be charged with ‘mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.’ BRICS’s finance ministers have been directed to explore the feasibility and report at the next summit.

Although there have been long standing disagreements between developed economies and the major emerging economies, particularly on non-agricultural and agricultural market access, which has been a major reason for putting the Doha Round on hold, BRICS leaders pledged to continue their efforts for the round’s successful conclusion based on the progress made and in keeping with its mandate.  The summit declaration also stated that, “Towards this end, we will explore outcomes in specific areas where progress is possible while preserving the centrality of development and within the overall framework of the single undertaking.” Although the BRICS trade ministers at their meeting had earlier agreed to explore ‘new negotiating approaches’ that would allow members to advance trade talks in areas where progress might be achieved, the BRICS leaders stressed that members should be wary when pursuing plurilateral initiatives in the absence of developments in the Doha talks. This comment may have been made in the light of a sub group of 16 WTO members, including the US, EU and Australia, beginning to hold ‘exploratory talks’ on the possibility of a services liberalisation agreement. These talks have not received much of a warm response from the emerging economies although the US Ambassador to the WTO is reported to have said that they would prefer to have the emerging economies included as a part of the services discussions as they represent the markets that all are interested in.

The importance of the emerging economies can be gauged from this comment which also shows that emerging economies are now in a position to ‘call the shots.’ Another interesting development at the summit, although it may take some time for the full impact to be felt, were the two agreements signed by officials to provide credit lines to the business community. These agreements are seen as a step towards fulfilling BRICS’s long standing goal of eventually replacing the dollar as the main unit of currency between them and increasing intra-BRICS trade.

The Rio+20 conference also featured in the final summit declaration, with leaders calling the event a ‘unique opportunity’ for the international community to renew its commitment to supporting sustainable development but they cautioned that the concept of ‘green economy’ should not result in trade protectionism.

When observing the growth of BRICS since its formation, it is evident that as it grows and as members manage to put aside their differences in order to strengthen the grouping, BRICS will become a strong voice representing the changing global landscape in which future leaders will be countries that were referred to as developing in the past and are now known as emerging economies. Therefore, it is necessary to closely follow its developments as time may see BRICS emerging to be the strongest economic union in the world and other developing countries may also be invited to join.



(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)