The leaders of the leading emerging nations need to demonstrate the BRICS organization still matters when it meets for its eight summit in Goa on Oct 15, experts say.
The two-day meeting takes place against the backdrop of uncertainty surrounding some of the economies within the bloc.
High on the agenda will be institutional reform so the organization’s members, consisting of Brazil, India, Russia and South Africa as well as China, can work more effectively together to deliver results.
The summit, which Chinese President Xi Jinping will attend, and which will have a lotus flower in the color of each of its members as its emblem, will have a five-pronged approach to build a more coherent organization, which will include integration, innovation and exploring synergies among existing mechanisms.
Jeremy Stevens, the Beijing-based chief China economist at Standard Bank, Africa’s largest bank, said such issues remain important for such a young organization. It was in effect founded only seven years ago.
“I expect them to focus on issues such as institutional underpinning and collaboration generally such as peopleto-people exchanges and learning from one another,” he said. “One area where they might want to cooperate more is infrastructure construction.”
Gideon Rachman, chief foreign affairs commentator and author of Easternization, which examines the rise of Eastern countries, says there remains a big question about how BRICS hangs together as a political grouping.
“It started out as an economic proposition and has mutated into something more political. I am not sure if it still makes sense as a geopolitical proposition. What is actually meant to unite them? They are all big emerging markets, apart from South Africa, but that is about it.
“My guess is that in 20 years’ time we will have forgotten all about BRICS, but I could be wrong.”
BRICS, a term first used by the then Goldman Sachs chairman Jim O’Neill in 2001, formally became an official grouping when the countries held their first summit in Yekaterinberg, Russia, in 2009.
The founding countries, Brazil, Russia, India and China, were joined by South Africa, which, although much smaller than the others, was seen as a proxy member for the African continent.
Since the last summit in Russia in July last year the organization has set up its New Development Bank, and it launched a 3 billion yuan ($450 million) green financial bond in July.
But with China’s economy slowing and the Russian and Brazilian economies hit hard by the slump in commodity prices, the organization may have lost some of its original gloss.
Martin Jacques, author of When China Rules the World and visiting professor at the Institute of Modern International Relations at Tsinghua University, believes China remains committed to the organization, despite the suggestion it is looking more to Western countries such as Germany and the UK to build economic and commercial ties.
“China’s fundamental orientation is to the developing world, and I think you can see this by looking at its overall foreign policy and the arguments it makes about reform of the IMF and the World Bank. Unlike BRICS these Washington-based institutions don’t reflect the developing world.”
Despite the recent economic difficulties of some of its members, some 3 billion people, or 43 percent of the global population, live in BRICS countries, and the bloc accounts for more than 20 percent of global GDP.
I expect them to focus on issues such as institutional underpinning and collaboration generally such as peopleto-people exchanges and learning from one another.” Jeremy Stevens, Chief China Economist at Standard Bank.
“The reality is that the BRICS economies matter more and more every year,” Stevens of Standard Bank said. “These countries are reshaping global trade and investment in a profound way. The growing size of their economies and their huge populations are producing a huge structural transformation.”
Some argue that the biggest BRICS initiative has been overshadowed by China setting up its Asia Infrastructure Investment Bank this year, which has more development capital than the World Bank, and its Belt and Road Initiative.
“It might have slightly overshadowed what BRICS is doing but I think China sees the organization as one of its major networks and it won’t abandon it,” the British journalist and academic Jacques said. “When China does something it sticks to it.”
In BRICS, China’s economy is the biggest, five times larger than that of the next biggest, India.
Ruchir Sharma, head of emerging markets and chief global strategist at Morgan Stanley in New York and author of The Rise and Fall of Nations, believes this remains a fault line.
“China is really far above any BRICS nation. This and the changing general sentiment about emerging markets is also not good for the organization.”
Windsor Chan, strategy consultant for Asia practice for the law firm Hogan Lovells in Johannesburg, insisted, however, that China playing a major part in BRICS gives it its strength.
“It is certainly very important for South Africa. BRICS as with FOCAC (the Forum on China Africa Cooperation) is seen as a way of engaging with China and facilitating investment into and trade with Africa generally.”