If you’re an emerging market and there’s a geoeconomic grouping you’re looking for, you’ve got a few to choose from. In Asia there is Asean - ten countries in search of common ground. In Latin America there is Mercosur - five countries in search of common tariffs. And from the Atlantic west to the Black Sea there is Asia-Pacific Economic Co-operation – four adjectives in search of a noun.
But none of these has the distinction of having been a marketing campaign by Goldman Sachs got out of control. The Brics nations, apparently noticing a small clearing in the densely-thicketed field of international relations, seized on the designation to set up their own diplomatic process. The sixth leaders’ summit will take place next week in Fortaleza, Brazil, with the host nation hopefully performing better than at its other major international gathering.
As a coordinated entity, the BRICS grouping of emerging markets has produced little except inspiring the name of a widely-read blog.
Next month, the five governments – Brazil, Russia, India, China and South Africa – are planning to erect an actual edifice amid the swirling mists of rhetoric with the launch of a development bank dedicated to filling some of the gigantic hole in the financing of infrastructure and growth in fast-growing emerging economies.
The BRICS are seeking to avoid some of what they say are the faults of the World Bank and regional development banks – too much rich country dominance and too many conditions attached to lending. But that leaves the exact function and operation of the BRICS bank open to a great deal of political jockeying and uncertainties over how it is run.
Ah, the value of state visits. Russian President Vladimir Putin is in India for a few days, and the trip is certainly proving a profitable one. Deals so far include Russian helicopters to India, and a $2bn joint project financing deal between Russia’s sovereign wealth fund, the Russian Direct Investment Fund, and State Bank of India. Read more
By Akshay Mathur and Neelam Deo of Gateway House
Two recent developments – the $75bn bailout contribution from the Brics countries to the IMF, and the western push for sanctions against Iran – show how exposed the Brics economies are to western financial policies.
For decades, they have been successfully co-opted to submit to western-dominated institutions, leaving them with little motivation to build their own. Now, the Brics must urgently organize to build institutions of mutual economic benefit. The June 28 deadline that China faces on complying with Iran sanctions, highlights the urgency of the issue. Read more
The big news to come out of the Brics summit in New Delhi last month was the formal proposal for a Brics development bank. But another item may end up being of greater economic significance: the Brics Cable.
This isn’t some Wikileaks exposé. Rather, it’s a proposed new route for a huge undersea telecoms cable connecting Vladivostok to Miami via Shantou, Mumbai and Fortaleza, Brazil. At a length of 34,000km, the cable will be the third longest in the world. So why is it needed? Read more