Editorial: BRICS Summit Offers Chance for Stronger Partnership
The ninth annual summit of BRICS — the association of the five major rising economies of Brazil, Russia, India, China and South Africa — will take place in Xiamen, East China’s Fujian province, from Sept. 3-5.
The summit theme, “Stronger Partnership for a Brighter Future,” conveys the reality for some of these member nations, which are facing political and economic challenges.
The inaugural summit took place in Yekaterinburg, Russia, in 2009. Particularly since South Africa joined the club in 2011 to expand BRIC to BRICS, the leaders of the member countries have expressed a willingness to play a bigger role in international affairs.
The new body gathered five economies that have great prospects. When combined and working together, they can become a new force to diversify the global governance that has often been dominated by a single country. The BRICS group is also expected to become another cooperation platform for the rest of the developing countries.
BRICS has been deepening the members’ cooperation since its founding. However, more effort is needed to make the cooperation more effective and lively. After all, to tell whether an international cooperation system is successful or not, people need to see major achievements.
People often compare BRICS to the Group of 20 (G-20) and the Group of Seven (G-7). The G-20 played an important stabilizing role at the height of the global financial crisis in 2008. The G-7, though having been dismissed as an all-talk, little-action shop in recent years, contributed to the drafting in the mid-1980s of the Plaza Accord, which balanced trade and economic relations among its member countries. The BRICS is also expected to produce plenty of fruit.
The major achievements so far include the New Development Bank announced in the BRICS summit in 2014 in Fortaleza, Brazil; and the Contingency Reserve Arrangement, a $100 billion fund to forestall global liquidity pressures.
The New Development Bank has been operating smoothly since it came into being in July 2015, having issued over $1.5 billion loans to seven projects.
However, the New Development Bank cannot compare to the Asian Infrastructure Investment Bank, as some BRICS member countries’ economic performances have not being doing well. Russia, Brazil and South Africa, for example, have been suffering from low economic growth or negative growth, with government debts building up, and risks in bank loans on the increase.
The New Development Bank has to accomplish two tasks right now — get new members and obtain a credit rating.
In the first decade of the 21st century, the BRICS nations were prospering. However, coming into the second decade, some of them have been encountering various difficulties in political and economic realms.
Russia’s economic reform progresses slowly. Hit by upgraded international economic sanctions, its economy has been lacking vitality.
The new president of Brazil, Michel Temer, has been showing determination to spearhead economic reforms. But he and his predecessor, Dilma Rousseff, are both involved in corruption probes, casting further uncertainties on the country’s politics and economy.
South Africa’s president has been repeatedly affected by political storms, with the country’s economy at the brink of a low ebb.
India’s economy has seen a surge in the past two years. But the economic statistics in recent months have not been exciting. Prime Minister Narendra Modi’s controversial reforms in land and labor are yet to pan out.
The problematic bilateral relations between some of the BRICS countries are also casting shadows on the deepening of the bloc’s cooperation.
After all, BRICS is only 7 years old. There should not be any unrealistic expectations in terms of what it can accomplish in the short term. However, that does not mean the BRICS countries should not try their best to look for new areas for effective cooperation.
According to the World Bank’s estimate, four of the BRICS countries — China, India, Russia and Brazil — rank in the top 10 among all economies in the world in terms of their gross domestic product based on purchasing power parity in 2016. Five of the G-7 countries are in the top 10. There are plenty of opportunities for trade among the BRICS countries. However, the differences in resources, industrial levels and per capita income have also brought difficulties in coordination. Their different economic systems and national development strategies also bring different priorities of economic cooperation.
Besides further pushing forward economic and trade cooperation, the BRICS countries may also look for other areas that have great potential for success and will not be greatly affected by the current political and economic situations.
One such area is public health care, which may often be ignored. British economist Jim O’Neill, who coined the term “BRIC” in 2001, chaired a report on superbugs resistant to antibiotics in 2016. The report is followed by the World Health Organization and World Bank, which warned about 10 million premature deaths each year by 2050, with its economic impact worse than the 2008 world financial crisis. China has been consuming nearly half of the world’s antibiotic drugs. It will be a major victim of antibiotic overdose, along with India.
If the BRICS countries can join together to find a solution in this field, it will not only benefit their future generations, but the rest of the world.
The other area for easier cooperation is environmental protection to prevent climate change. The BRICS countries have similar stances and needs in this area. The space for cooperation is huge.
Despite various difficulties, the outlook for BRICS development has been positive. Locating and exploring new cooperative areas is urgent for this group. With its sizes in economy and population, China also has to shoulder a significant burden in helping the group find opportunities of cooperation and coordinated action. The incoming summit in Xiamen will add some glimmer to BRICS.
Hu Shuli is the editor-in-chief of Caixin Media.
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