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New world power - BRIC group

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Realities of the modern stage and historical experience prove that the world`s being unipolar doesn`t promise long-term stability on an international scale. The unipolar world is built on the interests of world powers, where principles such as global justice and equal cooperation are not considered.

Since the collapse of the USSR-led socialist bloc modern international relations have been dominated by the West led by the United States. Recent ethnic, religious and cultural conflicts in different parts of the world, global financial, economic and environmental crises demonstrate that such a world order makes new configurational changes unavoidable.

Economic powers remain the world`s emerging poles. Russia, a successor of the last century, China and India in Asia, Brazil in the Western hemisphere seem to be main geo-economic actors as contours of new world order are emerging. This group of nations is called BRIC. The BRIC, as an economic term, was invented by Goldman Sachs in 2001. 

BRIC was initially considered exceptionally as a group of countries with the same level of development, but whose economies were in no coordination. It should be noted that pro-Western centers do not accept BRIC as a group, and consider it just an acronym invented by Jim O'Neil (of Goldman Sachs) and believe that these countries have basically nothing in common whatsoever (1). However, the BRIC countries seem to be tending to create a political and economic union, and this can also be considered an effort to transform economic power into geo-political influence.

A civilizational approach to BRIC is also important. Some believe the fact that the BRIC countries represent different civilizations is a plus, while others consider this a disadvantage. India and China represent ancient civilizations, while Brazil and Russia belong to two completely alien civilizations. However, the countries within the group do not try to implant their own values in each other

The group`s countries are bound by common interests. There seems to be an alternative vision of the West`s model of common civilization and common values. Russia sees BRIC as a new model of global relations built on former disagreements in the direction of East-West and North-South (2). In general, BRIC is considered a platform for dialogue of civilizations. BRIC completely rejects the existing East-West and North-South confrontation.

After South Africa's accession to BRIC in 2011 this bloc turned into the BRICS group. However, the group is still called BRIC as a geo-political actor, and given its geo-political weight, South Africa is not related to the bloc.

Covering 25 per cent of the world’s land mass and representing 40 percent of the world’s population, these countries account for 14.6 per cent of global GDP.

The total size of their economies has grown 4.2-fold in the last ten years. The following table (3) shows that they have real potential to become world giants.

 

World ranking Brazil Russia India China
Territory 5 1 7 3
Population 5 9 2 1
Workforce 5 7 2 1
GDP(purchasing power parity) 7 6 3 2
Gold and exchange currency reserves 7 4 6 1
Military expenditures 12 5 10 2

 

The 2012 Wealth Report by Knight Frank and Citi Private Bank said China and India would overtake the United States in terms of GDP size, forecasting Brazil would make it into the top five. Financial experts believe that with the 8 per cent annual development indicator in 2010-2050, India will overtake China after 2050. The report predicts India’s GDP will reach $85.97 trillion in terms of purchasing power parity (PPP) by 2050, compared to China’s figure of $80.02 trillion for the same period, while the United States sits in third place at $30.07 trillion.

The BRIC countries can be called the club of new world leaders. For a long period of time the world`s political and economic scene was dominated by “Great seven” countries (the US, Canada, Germany, France, UK, Italy and Japan). The G7, which is not an international organization, but an international forum, is already falling behind the BRIC countries in terms of economic indicators. The United States and its allies are losing the grip on the economic front. Goldman Sachs forecasts that the BRIC economies will overtake G7 economies by 2050. In this regard, some believe the BRIC will replace the G7 or be an alternative to it.

Given economic indicators, the BRIC countries have real chances of achieving a dominant position on the front, because they can make others respect themselves by expanding economic operations and financial resources strictly among themselves.

Russia`s and Brazil`s rich natural resources, India`s cheap intellectual resources and China`s cheap labor force are major links of this internal chain. Russia and Brazil, being major raw material suppliers, and China and India thanks to a dominant position in manufacture of industrial goods and services sector can completely get rid of dependence in economic relations with Western countries. On the contrary, the West`s economy is much dependent on the BRIC countries as suppliers of energy and raw material.

If BRIC prefers working within the group, this will certainly radically change the balance of powers on the economic front, with the West facing new economic crises. Given the fact that the two of the BRICS countries are permanent members of the UN Security Council and other three are nuclear states, the group`s political weight is also growing.

Specialists believe that rapid development of the BRIC countries is also based on several segments of the internal market. Today in BRIC countries, there are 800,000,000 people with middle income, and the figure is expected to rise. The middle income population makes the major layer of consumers and is the main factor stimulating the national economy.

According to Goldman Sachs, in 2010 the total number of the world`s population with middle income was 2.6 billion people, of which 29 per cent live in the G7 countries, while 33 per cent in the BRIC nations. It is forecast that the world`s population with middle income will make 5.2 billion people in 2030, with 52 per cent living in the BRIC and 15 per cent in the G7 countries. It is obvious that the world`s consumer center is moving from the G7 in the direction of BRIC,

On the other hand, the increase in the number of billionaires and city population in China and India means huge economic demands (city infrastructure, services, entertainment, real estate). According to Forbes, there are 301 billionaires in the BRIC countries. By comparison, the number of billionaires in Europe is 300 (4).

The BRIC was initially a group of countries at similar stage of economic development, but there seem to be signs of the bloc`s turning into a political actor. However, there is not a definite unanimous opinion on the issue. The BRIC countries do not have common interests on the majority of directions - from their representing different civilizations and to their preferring different models of development.

However, recently there have been efforts to coordinate the links in the political direction too. The interests of the BRIC countries particularly coincide on the issue of carrying out reforms in the United Nations, raising the number of Security Council members by accepting Brazil and India, and increasing the share of developing countries in the World Bank and the International Monetary Fund.

The aforementioned is also confirmed by the growing dynamics of efforts at BRIC summits towards consolidating the political positions.

In 2009, the leaders of the BRIC countries held their first summit in Yekaterinburg, and issued a declaration calling for the establishment of an equitable, democratic and multipolar world order.

The second summit in Brazil in 2010 saw the leaders call for the establishment of a new financial order and the increase in opportunities for the BRIC countries` influence in the World Bank and the International Monetary Fund.

The third summit, which took place in China in 2011, marked efforts towards reforming the United Nations, performing economic operations with national currencies and taking a common position on Libya.

The fourth summit took place on March 28-29, 2012 in India, and the BRIC counties made proposals on the founding of a common development bank, removing dependence on the dollar and the euro in favor of national currencies, as well as taking a common position on the Middle East and Iran. Thus, the group seems to be gradually coordinating the positions on political issues, and it is already the reality that BRIC has become a new world power.

 

New Times

 

References:

  1. Does the BRİCS Group matter? Council on Foreign Relations. March 30, 2012
  2. Сергей Лавров. БРИКС – ГЛОБАЛЬНЫЙ ФОРУМ НОВОГО ПОКОЛЕНИЯ. Научно-практическая конференция "Страны БРИКС как восходящие государства-гиганты: новая роль в системе международных отношений, глобальная проекция внешнеполитических стратегий, сравнительный анализ национальных моделей модернизации. Опыт для России"  (Москва, МГИМО, 9 –10 ноября 2011 года)
  3. The table was made with reference to www.cia.gov.
  4. BRICs becoming billionaire factoryhttp://www.ft.com/cms
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