1. BRICS as envisioned
In 2001, Chief Economist of Goldman Sachs Jim O’Neil coined a term BRIC. Four emerging economies on world map from Left to Right, Brazil Russia India & China. Latter South Africa was added to the list. All these countries were emerging economies, with large population. They also have large land mass available for expansion.
BRICS countries are very different — both in terms of their resources and in terms of their values and goals. The only thing they all have in common is, well, membership of BRICS. Brazil and India are democratic, China and Russia are not. Brazil and Russia export hydrocarbons, China and India are net importers. China and Russia are permanent members of the UN Security Council – the others are not. Structure of financial systems, levels of income, education, inequality, health challenges also differ substantially within BRICS. This is why it is very hard to speak with a unified voice and to co-ordinate action. The fact that BRICS have not really established anything tangible yet should not be a disappointment .
Even though BRIC was propose 2001 it remain as dormant idea till 2009. Most multi-lateral institutions were designed in the era when the West dominated the world. The US and Europe are over-represented in the IMF and the World Bank. Together with Japan, they control most regional development banks as well. But the Sub Prime crisis of United States in 2007-08 made G7 to realize that Global financial power has shifted, and broader participation from non OECD countries is must if they wanted to save global economy.
In this backdrop first BRIC summit happened in 2009 and South Africa joined next year in 2010. Also at the same time G20 was also rejuvenated which includes the BRICS nations.
2. Comparison of BRICS nations
Since 2009 every BRICS nations has progressed differently. Which you can see from the chart below.
economy was more than all the other BRICS nations combined. China in 2009 stood at 5088 Billion USD against all other BRICS were 4693 Billion USD. Today China alone is twice of all BRICS economies. China in 2019 is 14731 Billion USD and all other BRICS are 6760 Billion USD.
3. Chinese dominance in world trade negotiations.
China is unusual fit in this group. China being member of BRICS might be justifiable 2 decades ago but now it is becoming more and more evident that China is becoming a nuisance to the cause of BRICS.
BRICS was formed with the view to face challenges collectively as a block of developing nations. Especially during the beginning of last decade Develop nations started putting environmental restrictions on developing nations and industries. But as we see in recent times, China has struck deal individually with US and EU. This has left other 4 BRICS nations at a disadvantage. Because, now the EU has an option if things doesn’t work out with any of the BRICS nation they can continue to work with China.
Chinese dominance in world trade make them immune to certain environmental restrictions. But that immunity is not available to Brazil, Russia Indian and South Africa. They get bitter end of the bargain. China rather than adding value to the collective taking advantage of the poor/emerging economy status.
4. Challenges for BRIS
Without China the BRIS would have mere 7% of world GDP. But excluding China BRIS has many more things in common to work together. All 4 BRIS nations has massive landmass. South Africa is 24th Largest while other 3 comes in top 10. They have humongous natural resources to be exploited, which are favourite target of environmentalist. They have too much to gain working together and too little to lose. Staying together is their biggest challenge.
While China has ongoing border disputes with Russia and India no BRIS nation shares a common border. That put strategic pressure at ease while discussing economic issues. Such thing could not be imagined between India and China. Just recently India has banned 100+ Chinese apps and designated them security risk. There is no such conflict of security interest among BRIS. In few cases they can complement each other. Brazil and Russia are net exporter of Hydrocarbon while India and South Africa are importer. India has largest IT and Pharma industry which can satisfy need of all BRIS nations.
More so countries like Bangladesh, Indonesia, Argentina and Mexico has expressed strong interest in joining BRICS. Bangladesh was invited in 2020 summit.
It would be feasible to achieve goals only if economies with similar strength are grouped together. With China the balance is unfairly tilted.
It would be advantageous if China replaced with few other emerging economies.
