The purpose of this essay is to present the current situation of the political dialogue, which was organised in the year 2006 and later, formed into BRICS club. Chief economist of Goldman Sachs, Jim O’ Neil was the first person to coin the term BRICS, made up of five countries including Brazil, Russia, India, China and South Africa. Later in 2011, it appeared as independent global organisation with the motive of sharing equal effort to keep a balance between nations in economic, cultural and political sectors.
Although, if according to importance it has been arranged it must be CIRB, yet economists felt the term BRIC is market friendly. Before the interference of South Africa it was termed as BRIC. After the summit of 2010, it was internationally known as BRICS countries. According to Menon (2017), these countries are known for their potential of economic growth. Therefore, this essay will analyse and explore current economic condition of BRICS nation and their potential to conquer economic power to compete with the strongest nations by the middle of 21st century. Mutual relationship between the nations are based on non-interference policy and nations believe in equal distribution of benefits among them. The contemporary chair person is from Russia and the seventh summit was conducted by them on 15th July, 2015.
According to the predictions of Goldman Sachs, within 2050, the US will be the only western country which has a chance of securing place into the top five. The list of worlds’ largest economic power China will be the leading one just before US. However, the difference between these two is going to be much higher than it is now. Among the BRICS countries, China can lead the world economy if they can match America’s GDP rate by 2027. The collective count of BRICS’ GDP should come in parallel with USA by 2032 if growth rate remains the same. Even according to a prediction by The World Bank U.S currency will lose its dominant nature globally and China’s renminbi will come into an equal rate. One of the greatest success of China is to surpassed Japan and securing the place of second largest economy of the world.
Apparently, two central reasons can be found behind such collaboration. The first and foremost reason was to challenge the prolonged superlative status of America forming a substitute organisation to IMF and World Bank (Shetiya). Apart from that, to have mutual assistance in procedures of development plans within a self-operated structure without any foreign aids or assistance. In order to make their initiatives stronger, as per the study of Basha (2018), nations even working on forming BRICS bank to self-finance themselves.
Studying BRICS is significant as it delivers knowledge about economic direction. The reasons why these nations are considered to unite into such an organisation Gunasekaran, Jabbour and Jabbour (2014); are that all of these countries are capable of Bulk production irrespective of industrial boundaries, workforce is greater than the numbers of job profiles and cost of labour maintenance is lower than other countries. Moreover, emerging strongest economies has a tendency of rapid growth depending on real estate, oil and energy plants; both the telecom and automobile, retail, IT and pharmacy sectors chiefly. With such promising growth prospect, if nations can collaborate with each other, there is a possibility of competing with even the strongest economy of the world. However, while executing the agendas of BRICS several issues are raising due to unpredictable nature of world economy.
According to Carducci and Bruno (2014), before moving into weakness and future challenges, the strength and performance can be evaluated first. There are certain figures, which show their collective capability to perform significantly in world’s economic platform. The countries current occupy 42% of the total world population; no less than 26% of the total land area and contribute 14% of the world’s GDP. According to IMF World Economic Outlook Database, recorded in April 2018, China was the highest in terms of GDP. Whereas in terms of average annual gain South Africa has scored the highest. As argued by Mostafa and Mahmood (2015), while counting the combined share of global GDP, it has been noticed that BRICS is in a good position as compared to G7 countries. However, it will take time to develop and fulfil the objectives of BRICS. Goldman Sachs has forecasted BRICs economic growth, which predicts China to be the top contributor in terms of economic growth (Hongfeng, 2017).
Therefore, it can be summarized that, as mentioned before, economic collaboration of these five countries are important because of their ascending rate of growth and the most promising emerging economies. Moreover, they occupy half of the entire world population and according to recent reports; their contribution covers a major part in world GDP progression. Economists have already predicted that it is only a matter of few years for China to become the biggest economy. According to such predictions, supported by recent evidences, it can happen anytime in between 2030 to 2050. Along with that if current pattern of growth is followed, a nonprofessional can even understand this nations will be the most powerful economical territory. They can even be counted under 10 largest economies of the world.
People may argue apart from this growth parameter what factors have made them together forming one group working together on shared objectives. To be honest there are very few factors which are similar about them. All of those countries are in category of investment and mutual political and economic collaborated have been established. Once in 2008, when they met together in a summit, economists believe it was for transforming the economic collaboration into a political one. In case, they become successful in cresting economic order with the club then China can supervise manufacturing industry, Russia, Brazil can regulate raw materials and natural resources, and India can be the hub for outsourcing and services. As argued by Kelsey (2015), businesspersons will be interested in to invest in the field of these nations and their enhanced economic value is dependable on their joint effort towards increasing GDP rate.
Irrespective of economist’s predictions, there are some practical objectives of BRICS group. Those are as follows. 1) To act as a linkage between developed and developing countries, as instance in front of world trade organisation this group of nations are trying to escalate the matter of unfair agricultural policies and bringing justice. 2) Far beyond assisting in economic platform these nations are working as a group who shares information regarding development of education, culture, health and environment. 3) Every nation will share benefit in terms of regional development if assisted by rest of the four nations. 4) The joint initiative will be increasingly significant as they are assisting developing nations in terms of development of business scenario within a competitive environment Shen et al. (2017).
Although, the group used to be recognised for rapid financial growth, the current situation reflects serious political and economic crisis. There are two major aspects, which indicates the upcoming disaster. At first, debt burden is getting higher over these nations due to an increase of Federal rate and secondly, there income from exporting has become low due to the falling price of regular commodities across the world. In addition to that, it has been reported, China’s business structure has been transformed as it has started to depend on domestic consumption of goods instead of exported materials. Undoubtedly, this has become the most terrifying factors as far as the economic collaboration is concerned. Among these five economical platforms, India is promising for potential and accelerated growth pattern being the importer of crude oil and other goods whose prices have fallen globally. As the country is self-sufficient in terms of natural resources and agricultural production, it does not have to be dependent on exportation for its economic propriety. Since the occurrence of global economic crisis, China’s economy is progressing slowly as of the beginning of 2016. India is consistently struggling to achieve a stable position and has considered several foreign aids in terms of improvements.
The last decade has experienced BRICS’ moderate rate of success until the incident of military standoff between India and China, which has increased political tension between these two nations. Next big thing is China’s initiative of developing a BRICS plus model. As argued by Cooper and Farooq (2013), both the event questions objective of establishing a global model of governance in terms of aligning BRICS objectives with individual national agendas.
Although, except India rest of the nations have confronted with an economic decline, the social environments differ from one country to another. It has been observed minutely that only economic development does not ensure a developed lifestyle. The data collected by practical survey support the fact that in spite of being economically stronger Russia cannot beat Brazil and South Africa in terms of social progression (Staniste, 2015). It is important to address social issues as soon as possible, as it highly affects the economic prosperity of any nation irrespective of its developed or developing status. As instance, India needs to invest more resources to satisfy basic requirements of the fellow citizens. On the other hand, as described in Dhanavandan, Tamizhchelvan and Mary (2014), although these countries are in a stable economic position institutional structure must be changed in terms of protecting the rights of Chinese and Russians. Moreover, study of Ozturk (2015) suggests, along with social development, environmental issues must be addressed by adopting energy efficient, green technologies, which will be able to mitigate the human issues without harming environmental balance. A reading of Klafke et al., (2015) suggests the joint implementation of policies to reduce the emission of greenhouse gases will create immense impact on global measures against pollution and global warming. Apart from these fragmented issues identified by the researchers and economists, Brazil and South Africa must work on social sectors to protect the relationship among the nations (Strizhakova & Coulter, 2013).
Therefore, considering the differences in socio-economic scenario of every nation scholars have observed a little chance of this bond to work out in future days. While predicting the facts and figures related to BRICS for the next decade a distinct reason has been highlighted that there is no specific logic which can bound these five nations together. They are different in terms of geographical features firstly. Although, all of them are emerging fastest growing economies still each one of them are in different stages of development process. Hence, it is unjustified to categorizing them into one group. Political and social structures are too different to compile them under on category. However, economist do not consider these facts as obstacles as far as their objectives are concerned. As per the study of Larionova (2016), mutual assistance can help them to resolve regional issues and it has potential of boosting global economy as well according to the reports presented in World Trade Organisation. The objectives are decided after receiving the approval of all the five countries and this establishment is highly pragmatic and contemporary too. As per Stuwe, Bellanger and Picon (2014), the advantage of diversity is that one country can take lessons from the other one before reacting on same kind of social or environmental issues. Therefore, such geopolitical collaboration is expected to make a difference in upcoming decade in terms of social sustainability (Stender, 2016).
For the coming decade, BRICS members have decided to be more relevant in terms of shared goals like the previous decade. They were successful in identifying mutual points of benefits and common interests to work on further. Their further agenda is to develop making a new model of BRICS comprising of other developing countries in order to work on their flaws (Kolachi & Shah, 2013). Besides, according to Ali et al. (2018), UN’s one of the sustainable development goal is to maintain environmental balance throughout the world. Working towards an energy alliance and policy will help to ensure financial progress on environmental sustainability.
Hence, it can be concluded from the above discussion that BRICS nations as compared to other developed and emerging economies have better intentions for the world economy. Their current rate of growth indicates their potential of sustainability. Although, according to the economists observation BRICS is lagging behind G7 countries as of now yet it can be expected that within a 2050 China will be the most superior economic power if the progression rate remains same. However, three decades is not a short span for confronting several twists and turns. Expectation is BRICS will be capable of maintaining this development through channelizing global businesses, improving technological fields aligning with environmental interests, developed procedure of exports and imports and foreign investments. Apart from all these aspects, it is crucial to remain tolerant for each other as well as aligning collective motive with the individual national agendas.
References
Ali, S., Hussain, T., Zhang, G., Nurunnabi, M., & Li, B. (2018). The Implementation of Sustainable Development Goals in “BRICS” Countries. Sustainability, 10(7), 2513.
Basha, J. (2018). FINANCIAL PERFORMANCE OF BANKS OF BRICS-A COMPARATIVE STUDY. INDIAN JOURNAL OF APPLIED RESEARCH, 7(9).
Carducci, M. and Bruno, A.S., 2014. The BRICS countries between justice and economy methodological challenges on constitutional comparison. Sociology and Anthropology, 2(2), pp.46-58.
Cooper, A. F., & Farooq, A. B. (2013). BRICS and the Privileging of Informality in Global Governance. Global Policy, 4(4), 428-433.
Dhanavandan, S., Tamizhchelvan, M., & Mary, A. I. (2014). A Study on Current Scenario of Institutional Repositories among BRICS Countries. International Research: Journal of Library and Information Science, 4(4).
Gunasekaran, A., Jabbour, C. J. C., & Jabbour, A. B. L. D. S. (2014). Managing organizations for sustainable development in emerging countries: an introduction. International Journal of Sustainable Development & World Ecology, 21(3), 195-197.
Hongfeng, L. (2017). A review of Chinese studies on the role of the BRICS in global governance. Hermès, La Revue, (3), 165-172.
Kelsey, E. (2015). Towards a new international investment paradigm? Taking the BRICS seriously.
Klafke, R. V., de Barros Ahrens, R., da Silva, R. G., Pilatti, L. A., & de Francisco, A. C. (2015). Air pollution indicators in Brazil, Russia, India and China (BRIC) countries. Scientific Research and Essays, 10(16), 513-521.
Kolachi, N. A., & Shah, H. A. (2013). BRICS countries and their strategic HRD agenda in 2020. International Journal of Management & Information Systems (Online), 17(2), 105.
Larionova, M. (2016). Russia’s 2015 BRICS Presidency&58; Models of Engagement with International Organizations. International Organisations Research Journal, 11(2), 113-139.
Menon, A. A. (2017). Performance of Economic Growth in BRICS Countries.
Mostafa, G., & Mahmood, M. (2015). The rise of the BRICS and their challenge to the G7. International Journal of Emerging Markets, 10(1), 156-170.
Ozturk, I. (2015). Sustainability in the food-energy-water nexus: Evidence from BRICS (Brazil, the Russian Federation, India, China, and South Africa) countries. Energy, 93, 999-1010.
Shen, L., Shuai, C., Jiao, L., Tan, Y., & Song, X. (2017). Dynamic sustainability performance during urbanization process between BRICS countries. Habitat International, 60, 19-33.
Shetiya, R. M. BRICS New Development Bank: An Option to World Bank-IMF?.
Staniste, M. M. (2015). Humanitarian interventions, responsibility to protect versus state sovereignty. The BRICS countries perspectives. International Journal on Humanistic Ideology, 6(2), 57.
Stender, M. (2016). Social Bricks?: Integrating Social Sustainability in Housing and Neighbourhoods. In Secretariat Sustainable Housing 2016. Green Lines Institute for Sustainable Development.
Strizhakova, Y., & Coulter, R. A. (2013). The “green” side of materialism in emerging BRIC and developed markets: The moderating role of global cultural identity. International Journal of Research in Marketing, 30(1), 69-82.
Stuwe, L. T., Bellanger, M. M., & Picon, P. D. (2014). Hta In The Brazilian Health Care System and Potential Lessons Learned For Other Brics States. Value in Health, 17(7), A444.
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