2. BRICS: New International Actors
• BRIC configuration started on economic
projections
• Middle powers
• Regional leaders
• Fastest-growing countries
• Engines of the global recovery process
• International roles
• Diplomatic activism
• Opportunity: Global vacuum
5. BRICS countries (2010)
• More than 40% of the global population (work
force)
• Nearly 30% of the land mass
• 25% of the world GDP in PPP terms
• 43% forex reserves
• Major destinations for FDI
• Large economies
• Increasingly important role in meeting global
demands for capital
Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide
6. Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide
7. BRICS % GDP increase (2008-2013)
Source: CEPAL, en Jonathan Quirós Santos
8. Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide
9. A long-term vision for BRICS: Submission to the BRICS Academic Forum, 2013
13. Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide
14. FDI trends
• BRICS have emerged as major recipients of FDI and
important outward investors
• Overseas investment is mainly in search of markets in
developed countries or in the context of regional value
chains
• Some 43% of BRICS outward FDI stock is in respective
neighbouring countries in Latin America and the
Caribbean, East Asia, South Asia and transition
economies (40% in the case of Brazil)
• Economic linkages through FDI between BRICS countries
themselves are still limited, although intra-BRICS FDI has
grown faster than flows to non-BRICS over the past
decade
16. A long-term vision for BRICS: Submission to the BRICS Academic Forum, 2013
17. A long-term vision for BRICS: Submission to the BRICS Academic Forum, 2013
18. Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide
19. Natural resources (2005)
Source: Wealth of Nations in Lucas Ferraz Vasconcelos, Cambio estructural en Brasil: Una experiencia
latinoamericana
20. International projection
BRICS have been able to transform their economic power
into international political influence
•Members of major international and multilateral
institutions, such as the WTO, the UN, the G-20 and the
UN Framework Convention on Climate Change, and are
very active participants therein.
•Involvement in Global Issues: Reform of the UN Security
Council (UNSC), reform of international financial institutions,
namely the IMF and the World Bank, Doha Round, Climate
Change (BASIC countries)
•Create a Developing Bank
Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide
21. BRICS Summits
I. Russia (June 2009)
II. Brazil (April 2010)
III.China (April 2011)
IV.India (March 2012)
V. South Africa (March 2013)
VI.Brazil (2014)
22. Origins and evolution
2001: BRIC denomination (Goldman Sachs)
2006: The Dow Jones introduces the BRIC 50 Index, a basket
of the 50-biggest companies listed on the stock exchanges of
Brazil, Russia, India and China
2006: Formalization with the First Meeting of the BRIC foreign
ministers as a side event to the 61st UN General Assembly in
New York
2008: BRIC Heads of State/Government meeting
2009: First summit in Yekaterinburg, Russia
2011: South Africa incorporation
Suresh P. Singh in BRICS and the World Order: A Beginner’s Guide
23. Common principles of the group
• Mutual respect and non-interference in each other's
internal affairs;
• Non-confrontation;
• Opposition to the use or threat of force in international
relations;
• Centrality of multilateralism on global issues;
• Mutual respect for each other's choice of development
path;
• Openness;
• Pragmatism;
• Solidarity;
• Non-bloc nature;
•
25. Problems within
1. The group is not a natural fit: heterogeneous nature
and lack of cohesive identity
2. Differences on values, economics, political
structures and geopolitical interests
3. Inadequate infrastructure: energy;
telecommunication; transport (particularly road and
rail); and access to improved water and sanitation
4. Infrastructure challenge is also about regional
infrastructure development
5. Fragile nature of trade and investment linkages
6. Lack of skilled workforce
28. Fallacy?
Not only because an expected relative decline in growth
rates, but:
•Incapacity of performing an effective diplomacy (not
able to fashion a coordinated response to various global
challenges)
•China and Russia have little incentive to seek a change in
the global political institutional fabric
•Corruption
•South Africa?
•Overhyped from the start
•Structural disparity between China and the rest
30. New BRICS members?
Indonesia is tagged to be the next BRICS
It is the largest economy in South-East Asia with
strong links to both China and India and the
world’s fourth most populous nation
31. New acronyms
• IBSA: Brazil, India and South Africa
• RIC: Russia, India and China
• BASIC: Brazil, South Africa, India and China
• CIVETS: Colombia, Indonesia, Vietnam, Egypt,
Turkey and South Africa
• Next 11 or N-11: Bangladesh, Egypt, Indonesia, Iran,
Mexico, Nigeria, Pakistan, Philippines, Turkey,
South Korea and Vietnam
• MIST: Mexico, Indonesia, South Korea and Turkey
32. Process of confrontation, negotiation and co-
operation
• Bilateral trade tensions: In the WTO, the largest
number of complaints against the Chinese have been
initiated by Brazil, with India also seen as a threat to
Brazilian producers in the steel and software sectors
• Progress in the area of facilitating trade: Two
agreements were signed at the 2012 BRICS summit: the
Master Agreement on Extending Credit Facility in Local
Currency and the Multilateral Letter of Credit
Confirmation Facility Agreement
• Other areas for co-operation: food security, R+D,
culture exchange, tourism
33. Interesting facts
• China emerged as Brazil’s largest trading partner: Is this
economic relationship harmful for Brazil’s industry, with
China mainly importing commodities and flooding the
Brazilian market with cheap manufactured goods?
• China has also become the largest trading partner for
Russia and South Africa; and the second-largest partner for
India
• China and Brazil are competitors in South America
• Sectoral level: China will dominate in manufactured goods,
India will control services, and Russia and Brazil raw
material supplies. South Africa could emerge as an
important mineral supplier
• China’s currency manipulation has being criticized by
Brazil
34. Real green economies, conference at Wilton Park, UK, February, 2014
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Reunión informal a propósito de la Cumbre del G-20 en San Petersburgo (Septiembre 2013)
It all
started with a November 2001 Goldman Sachs research paper titled ‘‘Building
Better Global Economic BRICs,’’ written by Jim O’Neill. He predicted that
‘‘over the next 10 years, the weight of the BRICs and especially China in world
GDP will grow,’’ and went on to suggest that ‘‘in line with these prospects, world
policymaking forums should be reorganized’’ to give more power to BRICs.
2001 by Goldman Sachs in their Global Economics Paper No.
66, "The World Needs Better Economic BRICs".
BASIC (Brazil, South Africa, India, and
China), came together at the 2009 Copenhagen Summit on climate change to
block measures for environmental protection advocated by the West.
These agreements were signed by the export–import
banks of the five BRICS countries, namely the Brazilian Development Bank, Russia’s State
Corporation Bank for Development and Foreign Economic Affairs, India’s Exim Bank, the
China Development Bank Corporation and the Development Bank of Southern Africa.29
These agreements will allow trade among the BRICS countries to be conducted in domestic
currencies, thereby eliminating the use of the US dollar and reducing the risk of currency
volatility, as well as promoting the internationalisation of BRICS currencies.
As economic ties between China and Brazil have grown from $6.7 billion in
2003 to nearly 75 billion in 2012, frictions between the two have also risen.
Brazil views China as an unfair competitor, accusing China of dumping diverted
exports from Europe while charging Brazilian manufacturers steep non-/tariff
barriers when they try to export to China.30 Brazil is worried about the influx of
investment and cheap imports from China and has been very vocal in criticizing
Beijing for undervaluing the Yuan. To protect its manufacturing industry, Brazil
has started levying import tariffs on some industrial goods, mainly directed at
Chinese imports. Brazil is also wary of China’s growing economic profile in
South America, which Brazil considers its own sphere of influence. Thus, China
is not only killing Brazilian industries but threatening Brazilian exports in third
markets.