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International Relation Among BRICS Countries
Introduction:
BRICS is the acronym for an association of five major emerging national economies including
Brazil, Russia, India, China and South Africa. Originally the first four were grouped as "BRIC"
(or "the BRICs"), before the induction of South Africa in 2010. The BRICS members are all
leading developing or newly industrialized countries, but they are distinguished by their large,
sometimes fast-growing economies and significant influence on regional affairs; all five are G-20
members. Since 2009, the BRICS nations have met annually at formal summits. The term does
not include countries such as South Korea, Mexico and Turkey for which other acronyms and
group associations were later created.
BRICS brings together five major emerging economies, comprising 43% of the world
population, having 30% of the world GDP and 17% share in the world trade. The acronym BRIC
was first used in 2001 by Goldman Sachs in their Global Economics Paper, "The World Needs
Better Economic BRICs" on the basis of econometric analyses projecting that the economies of
Brazil, Russia, India and China would individually and collectively occupy far greater economic
space and would be amongst the world’s largest economies in the next 50 years or so.
History
In an August 2010, Jim O'Neill of Goldman Sachs argued that Africa could be considered the
next BRIC. Analysts from rival banks have sought to move beyond the BRIC concept, by
introducing their own groupings of emerging markets. Proposals include CIVETs (Colombia,
Indonesia, Vietnam, Egypt, Turkey and South Africa), the EAGLES (Emerging and GrowthLeading Economies) and the 7 percent club (which includes those countries which have averaged
economic growth of at least 7 percent a year).
South Africa sought BRIC membership since 2009 and the process for formal admission began
as early as August 2010. South Africa was officially admitted as a BRIC nation on December 24,
2010, after being invited by China and the other BRIC countries to join the group. The capital
“S” in BRICS stands for South Africa. President Jacob Zuma attended the BRICS summit in
Sanya in April 2011 as a full member. South Africa stands at a unique position to influence
African economic growth and investment. South Africa is a "gateway" to Southern Africa and
Africa in general as the most developed African country. China is South Africa’s largest trading
partner, and India wants to increase commercial ties with Africa. South Africa is also Africa’s
largest economy, but as number 31 in global GDP economies it is far behind its new partners.
Jim O'Neill expressed surprise when South Africa joined BRIC since South Africa's economy is
a quarter of the size of Russia's (the least economically powerful BRIC nation). He believed that
the potential was there but did not anticipate inclusion of South Africa at this stage. Martyn
Davies, a South African emerging markets expert, argued that the decision to invite South Africa
made little commercial sense but was politically astute given China's attempts to establish a
foothold in Africa. Further, South Africa's inclusion in BRICS may translate to greater South
African support for China in global fora.
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Prospects of BRICS
Starting essentially with economic issues of mutual interest, the agenda of BRICS meetings has
considerably widened over the years to encompass topical global issues. BRICS cooperation has
two pillars – consultation on issues of mutual interest through meetings of Leaders as well as of
Ministers of Finance, Trade, Health, S &T, Education, Agriculture, Communication, Labour, etc.
and practical cooperation in a number of areas through meetings of Working Groups/Senior
Officials. Regular annual Summits as well as meetings of Leaders on the margins of G20
Summits are held.
The BRIC countries label refers to a select group of four large, developing countries Brazil,
Russia, India and China. The four BRIC countries are distinguished from a host of other
promising emerging markets by their demographic and economic potential to rank among the
world’s largest and most influential economies in the 21st century and by having a reasonable
chance of realizing that potential. Together, the four original BRIC countries comprise more
than 2.8 billion people or 40 percent of the world’s population, cover more than a quarter of the
world’s land area over three continents, and account for more than 25 percent of global GDP.
BRICS Summit
As of the First Summit, held in Yekaterinburg in 2009, the depth and scope of the dialogue
among the Members was further enhanced. More than an acronym that identified countries
emerging in the international economic order, BRICS became a new and promising politicaldiplomatic entity, far beyond the original concept tailored for the financial markets.
After the Yekaterinburg Summit, five annual Summits were held (Brasilia, 2010; Sanya, 2011;
New Delhi, 2012; Durban, 2013; and Fortaleza, 2014). The leaders of the member countries have
been holding at least one annual meeting. In Durban last year, the first cycle of Summits was
completed, each member country having hosted a meeting of leaders. In this period, BRICS has
evolved in an incremental manner, in areas of consensus amongst its members, strengthening its
two main pillars: (i) coordination in multilateral fora, with a focus on economic and political
governance; and (ii) cooperation between members.
Intra-BRICS cooperation has also been gaining density a broad agenda has been developed,
comprising areas such as finance, agriculture, economy and trade, combating transnational
crime, science and technology, health, education, corporate and academic dialogue and security,
among others.
Aims and Objectives of BRICS
“The main objective now, the main goal is to foster the infrastructure of five countries. There are
wide opportunities for multilateral cooperation in nuclear energy, aircraft engineering, space
exploration and use, and nanotechnologies which can be enhanced through financial interaction
of the BRICS countries.
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By strengthening the economic foundation BRIC countries are objectively contributing to
creating conditions for strengthening international security.
Some of the Aims and Objectives of BRICS are:
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Promote technological information exchange among member country.
Improve education of BRICS nations.
Economic cooperation.
Bridging the gap between developed and developing countries.
Climate change, cultural tie ups and assistance in projects, finances, trade extension etc.
The Fortaleza Summit launched a new cycle for the BRICS. Brazil will follow up on the
initiative, aiming at incrementally increasing existing cooperation. The meeting's particular focus
on social inclusion and sustainable development gave visibility to policies implemented by
member countries, and to the contribution of the BRICS' economic growth to poverty reduction.
The theme "inclusive growth, sustainable solutions" is not only in line with the member
countries' social policies, but also highlights the need to tackle challenges in the social, economic
and environmental fields, and creates new opportunities for the BRICS in different areas,
including the negotiations on the post-2015 development agenda.
For Brazil, BRICS has a special significance: it comprises four of the country's strategic partners,
all of which have a strong regional leadership and growing participation in the global economy.
Brazil is now in charge of the group's presidency, and will lead the implementation of the Plan of
Action to be approved on the occasion. In view of BRICS' informal nature, the role of Secretariat
is played by its pro tempore presidency. BRICS is cautiously and incrementally being
consolidated, gradually moving forward the institution-building process.
Key Indicators and Statistics
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Economic Growth and Development of the BRICs
From 2000 to 2008, the BRIC countries’ combined share of total world economic output rose
from 16 to 22 percent. Together, the BRIC countries accounted for 30 percent of the increase in
global output during the period.
To date, the scale of China’s economy and pace of its development has out-distanced those of its
BRIC peers. China alone contributed more than half of the BRIC countries’ share and greater
than 15 percent of the growth in world economic output from 2000 to 2008. The chart above on
key development indicators for the BRIC countries shows the sharp contrast in GDP,
merchandise exports and the UNDP’s Human Development Index (HDI) between China and the
other BRIC countries.
Growing BRIC Middle Class
The rapid economic growth and demographics of China and India are expected to give rise to a
large middle class whose consumption would help drive the BRICs’ economic development and
expansion of the global economy. The charts below depict how the increase in the middle class
population of the BRIC countries is forecasted to more than double that of the developed G7
economies.
Science and Technology in the BRICs
The BRIC countries of China, India and Brazil account for much of the dramatic increase in
science research investments and scientific publications. Since 2002, global spending on science
R&D has increased by 45 percent to more than $1,000 billion (one trillion) U.S. dollars. From
2002 to 2007, China, India and Brazil more than doubled their spending on science research,
raising their collective share of global R&D spending from 17 to 24 percent.
China’s development planning has targeted a number of scientific fields and related industries,
including clean energy, green transportation and rare earths, among others. Since 1999, China’s
spending on science R&D has grown 20 percent annually to more than $100 billion. By 2020,
China plans to invest 2.5 percent of GDP in science research.
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Next 11 Emerging Markets
Many analysts and commentators have suggested expanding the original group of four BRIC
nations to include other emerging markets. Goldman Sachs has resisted conferring BRIC status
on other developing countries on the grounds that their demographics and economic
characteristics do not hold the potential for them to rival the economic size or influence of the
BRIC countries or today’s leading economies (e.g., U.S. and Japan).
In a nod to the interest in other emerging markets, Goldman Sachs identified another group of
economically dynamic and promising developing countries creatively labeled the “Next 11” in
its 2005 Economics Paper No. 134 “How Solid are the BRICs?” The Next 11 consists of a
broader group of emerging markets with the potential to play significant roles in the global
economy, including Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan,
Philippines, Turkey and Vietnam.
Infrastructure Fuels Growth in BRIC Countries
The 2012 annual report of the International Finance Corporation (IFC), a member of the World
Bank Group, estimates that developing countries will require $1.1 trillion in infrastructure
investment annually. A survey of business leaders identified India’s underdeveloped
infrastructure as the nation’s top priority.
Roads, ports, railways, electricity and information communications technology are all vital
enablers of economic growth and better living standards in emerging markets and developing
countries around the world. BRIC countries like India, Brazil and China have all announced
significant commitments to infrastructure development. The success of these efforts will depend
on their capacity to follow through on these commitments and a number of critical project design
and implementation issues, including cross-sector cooperation in the form of public-private
partnerships.
Infrastructure Development in Brazil, India and China
Brazil’s government plans to spend some 163 billion or 1% of GDP, on infrastructure as part of
its “growth acceleration” according to the Economist. On the other hand, a 2010 report by
Morgan Stanley calculated that Brazil would require infrastructure investment of 6 to 8 percent
of GDP annually to catch up with South Korea in 20 years and 4 percent to pull even with its
smaller Latin American neighbor Chile.
China has five-year plans that call for aggressive infrastructure investment. Among other
infrastructure investments, the plan includes:
 $840 billion in energy by 2015 and $1.76 trillion in the power industry over the next 10
years;
 $112 billion annually in rail projects to expand high speed rail and connect every city
with a population of at least 600,000 people;
 Extending China’s highway network to 83,000 kilometers; and
 Building a new airport in Beijing and increasing China’s total number of airports from
175 to 220.
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India has Five Year Plan (2012-2017) calls for $1 trillion in infrastructure investment, with the
goal of funding half of that hefty sum through private sector involvement in public-private
partnerships (PPPs). As in other BRIC countries, the scope of India’s infrastructure challenges
correspond to the country’s expansive geography and ample development needs. At 3.14 million
kilometers, India has the second largest road system in the world behind the U.S. Described as a
“lifeline to the nation,” India Railways operates the world’s second longest railroad network and
is the nation’s largest employer.
Among other measures, India’s infrastructure development plans call for:
 $42 billion in road-related infrastructure, including doubling the size of the country’s
70,000 kilometer highway network;
 $67 billion in rail-related infrastructure to expand routes to ports and the country’s vast
interior and improve shipping capabilities, among other objectives; and
 Upgrading infrastructure in Delhi and other cities to support the nation’s rapid
urbanization.
BRICs Development Bank
To help pursue these infrastructure goals, the BRICS countries, including South Africa, first
discussed creating their own South-South development bank at the fourth BRICS summit in New
Delhi in March, 2012. The idea seemed to be gaining momentum as the countries moved from
considering “if” to “how” such a bank would be formed and function at a meeting in Chongqing,
China in late September.
A BRICS development bank would be “the first major multilateral lender to emerge since the
European Bank for Reconstruction and Development in 1991” according to the Financial
Times. Prominent economists like Joseph Stiglitz and Nicholas Stern have argued that the bank
could help address important global challenges, such as the adoption of green technologies to
ward off climate change.
Academic Forum and Think Tanks Council
Since 2010, the Academic Forum of the BRICS meets annually, prior to the Summits, with the
participation of a large number of distinguished professors from the five countries. It constitutes
an important instance of civil society participation in the BRICS process. The meetings have
provided original brainstorming from the member countries on the challenges and opportunities
that they face.
The BRICS Think Tanks Council, established in 2013, consists of the following institutions:
Institute of Applied Economic Research (Brazil); National Committee for BRICS Research
(Russia); Observer Research Foundation (India); China Center for Contemporary World Studies
(China); and Human Sciences Research Council (South Africa). The Council is responsible for
sharing and disseminating information; research, policy analysis and prospective studies; and
capacity-building. Recommendations of both the Forum and the Council shall be addressed to
the leaders. Both the Academic Forum and the Think Tanks Council met in Rio de Janeiro in
March 2014.
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Health
The BRICS Health Ministers meet regularly since 2011, including at the margins of meetings of
the World Health Organization (WHO). Besides coordination on issues on the WHO agenda, the
group is considering the possibility of establishing a Technological Cooperation Network. One
of the goals of this initiative would be to promote the transfer of, and access to, technologies that
would allow increased availability and lower prices of medicines in developing countries. Three
ministerial communiqués (Beijing, New Delhi and Cape Town) mention the intention to
establish the network. The BRICS Framework for the Collaboration in Strategic Health Projects
was adopted in 2013.
Science and Technology
After several annual meetings of senior officials held since 2011, the BRICS Ministers of
Science and Technology met for the first time in February 2014, in Kleinmond. In the next
ministerial meeting, during the Brazilian pro tempore Chairmanship, a memorandum of
understanding in the area is expected to be signed, aiming to establish a strategic framework for
cooperation on science and technology. The memorandum will foster the promotion of
partnerships with other stakeholders in the developing world, based on the experiences and
complementarities of the BRICS. The areas of oceanographic and polar research, including the
Antarctic continent, are particularly promising.
Security
The BRICS High Representatives Responsible for Security has been meeting since 2009. The
latest meeting (Cape Town, December 2013) allowed the exchange of views on cyber security,
counterterrorism, transportation security, and regional crises. A Working Group on Cyber
security was established; among other objectives, it will assess developments in the field of
cyber security in international fora and coordinate a BRICS approach in those instances.
Agriculture
The BRICS Ministers of Agriculture and Agrarian Development met for the first time in 2010, in
Moscow. The following year, in Chengdu, the Action Plan 2012-2016 was approved, providing
guidance to the cooperation among the five countries in the agricultural field. A Working Group
of Agricultural Experts was also established, tasked with preparatory meetings prior to the
Ministerial gatherings.
Statistics
Since 2010, the BRICS Joint Statistical Publication is launched annually, on the occasion of the
BRICS Summit. Experts from the member countries meet regularly with a view to preparing this
document. The 2014 edition of the Joint Statistical Publication was prepared by the Brazilian
Institute of Geography and Statistics (IBGE) and was launched during the VI Summit.
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Dreaming with BRIC-The Path to 2050
The BRIC thesis recognizes that Brazil, Russia, India and China have changed their political
systems to embrace global capitalism. Goldman Sachs predicts that China and India,
respectively, will become the dominant global suppliers of manufactured goods and services,
while Brazil and Russia will become similarly dominant as suppliers of raw materials. Of the
four countries, Brazil remains the only polity that has the capacity to continue all elements,
meaning manufacturing, services and resource supplying simultaneously. Cooperation is thus
hypothesized to be a logical next step among the BRICs because Brazil and Russia together form
the logical commodity suppliers.
In 2016, an economist from Australia predicted that in 2050, based on Gross Domestic Product
per capita spending, China will be the first and followed by India and then USA. Indonesia
which nowadays is not belonging to BRICS countries will jump from 9th position to 4th
position. And Brazil will be in fifth position. It is due to the global economic center is shifting
from the Atlantic to the Asia Pacific region.
Criticism of BRICs
While a lot has been made about the enormous potential growth of the BRIC nations, O’Neils
thesis has been challenged over the years as the economic and geopolitical climate has
shifted. A couple fundamental criticisms of the investment concept include the idea perceived
by some as implicit in the argument for continuous growth by raw material providers that natural
resources are limitless. Those critiquing the model of growth say that it ignores the finite nature
of fossil fuel, uranium, and other resources.
It’s been argued by Deutsche Bank Research and editorials written in Foreign Policy Magazine
that China outstrips the other BRIC members economies by a huge amount, making up 70%
GDP growth of the group countries, putting the country in a seemingly different category than
other members of BRIC.
Still others have cited human rights issues in China and Russia, as well as Russia’s annexation of
Crimea and direct or indirect support of Russian separatist fighters in Ukraine as reason to doubt
fundamental tenants of the BRIC thesis. An editorial written for Reuters and published in 2014
categorized Russia’s belligerency as evidence that globalization is not inevitable, nor is it
irreversible.
Conclusion:
Brazil, Russia, India and China (BRIC) refer to the idea that China and India will, by 2050,
become the world's dominant suppliers of manufactured goods and services, respectively, while
Brazil and Russia will become similarly dominant as suppliers of raw materials. Due to lower
labor and production costs, many companies also cite BRIC as a source of foreign expansion
opportunity, and promising economies in which to invest.
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BRIC is an acronym for the economies of Brazil, Russia, India and China combined, originally
projected to be the fastest growing market economies by Jim O'Neill of Goldman Sachs first in
2001, but most prominently in a follow up paper published in 2003. It has been speculated that
by 2050 these four economies would be wealthier than most of the current major economic
powers.
The Goldman Sachs thesis doesn’t argue that these countries are a political alliance like the
European Union or a formal trading association; instead they have the potential to form a
powerful economic bloc. The countries haven’t announced any formal trade agreement between
them, but leaders of the four countries have attended summits together, and acted in concert with
each others interests. BRIC or ‘Big Four’ is now also used as a more generic marketing term to
refer to these four emerging economies.
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