In the first decade of the 21st century, much of the focus of global economics and world trade has been on the fastest-growing and emerging economies: the BRICS - Brazil, Russia, India, China and South Africa.
Originally coined in 2001 by economist Jim O’Brien, it wasn’t until 2009 that the group of nations met formally, and expanded one year on to become the BRICS, and include South Africa. Indeed, it is in Johannesburg, on 25th July, that the group celebrates its tenth summit, so how has it fared and what is in store for the next ten years?
When the BRICs nations were first defined, whilst they were identified as having huge economic potential, the group was often criticised for ‘a distinct lack of logic behind the coming together of these countries’ – with geographic dispersion, and ideological differences just two of the charges levied at the group. But one of the key elements here is that unlike other international organisations, the BRICS never sought any political or security assimilation – the vision was purely one of mutual economic benefit.
The BRICS nations are hugely populous – in 2015, the members represented over 3.1 billion people, which is around 41% of global population, with all five members in the top 25 most populous countries, and four of them (South Africa misses out) are in the top 10. Despite this, the group only accounts for around 23% of the gross world product. In terms of land surface, the land of member states covers an area of 39,000,000 km2 , approximately 27% of the world’s total land surface.
The BRICS have already made significant progress on the financial integration of members. 2015 saw the launch of the BRICS Development Bank, now known as the New Development Bank, with the members keen to move away from reliance on the US dollar for international investment. Today, the bank holds a capital of $100 billion and is authorised to lend up to $35 billion annually. Projects supported in 2017 included water supply and sanitation, rural development, energy conservation and social infrastructure in India, China and Russia.
Further progress has been made this year, with BRICS finance ministers meeting on the sidelines of the IMF/World Bank Spring Meeting, with India pitching the concept of an independent credit ratings agency for the BRICs nations, for the purpose of solving ‘impediments for the emerging market economies posed by the present credit rating agency market’ that is dominated by western reference agencies, with S&P, Moody’s and Fitch collectively accounting for 90% of the sovereign ratings market.
There are many countries who have sought to join the BRICS group, and some of these include countries in the ‘MINT’ group – Mexico, Indonesia, Nigeria and Turkey – who are tipped to match the rapid economic growth experienced by the BRICS. For these states, the strength lies in their populations, which while not the largest, they have what has been described by economists as ‘good inner demographics’ – essentially they have a population which is going to see a rise in the number of people eligible to work relative to those not working – a precursor to a boost in productivity – hugely envied by countries in the ‘developed’ world including the UK.
What holds back some members of the MINT group however, particularly in Nigeria as one example, is the provision of energy supplies. According to the BBC, poor energy infrastructure in the country means that around 170 million citizens share the same amount of power that is used by around 1.7 million in the UK. For a country to see 7% growth with such limitations in terms of infrastructure, it can only be a matter of time before it joins the G20 and becomes a global leader, should it be able to resolve these issues.
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