By Jaylan Boyle, Contributing Reporter
MOSCOW – On June 16th Russia hosted the first fully-fledged summit of the BRIC countries, an acronym for the world’s fastest growing economies; Brasil, Russia, India, and China.
Aside from the current global economic crisis, the theme of the summit will be the discussion of a new world order that acknowledges the BRIC countries’ growing influence and participation on the world economic stage.
Agreeing upon a unified approach to interaction with other bodies such as the G8 is also a priority. Brazilian President Lula said, “The BRICs need to establish a common strategy in our negotiations with other blocks.” Mr Lula has repeatedly stated that raising Brazil’s international profile is a goal of his presidency.
A spokesperson for President Lula has said that the BRIC countries, which now account for one quarter of the world’s population and 15 percent of global production, must agree on a declaration detailing measures considered necessary to maintain sustainable growth within the global economy. This declaration will be presented at the upcoming meeting of the G20 countries, representing the world’s 20 largest economies. The meeting will take place later in the year, possibly in Italy.
President Lula believes that agreement can be reached among the BRIC countries on a unified approach, because of the increasing economic participation of member economies. “Wealthy countries are no longer the only ones that account for the world’s production capacity and consumption; the BRICs should work together to change the political and trade geography of the world” he said.
Brazil has recently joined other BRIC countries in lending money to the IMF (International Monetary Fund), contributing US$10 billion. It is hoped that this will give the BRICs greater influence in the reforms as a unilateral lender. “The good news is that rich countries are in crisis and that emerging countries are making a huge contribution to saving the economy and, consequently, saving the rich countries,” Lula said.
It had been speculated that the BRIC summit will discuss the reform of the international currency reserve, however a senior adviser to the Russian Kremlin, Sergei Prikhodko, has said this will not be the case. Russia has questioned recently the world’s reliance on the dollar for international reserves, and has expressed concern that this reliance may have played a part in exacerbating the current financial crisis. Kremlin officials have suggested that a larger proportion of Rubles and Yuan be used, however the Russian Minister of Finance has said that this is unlikely to happen in the near future.
While Brazil has been less sensitive to the international crisis than more industrialised countries, in relative terms it has fallen behind other BRIC partners. “There has been perhaps exagerated pessimism regarding the abillity of developing countries to combat the crisis. But when one looks at the performance of China and India, it should be noted that Brazil has perhaps acted less than it could have” said Chief Economist of Austin Ratings, Alex Agostini.
The BRIC acronym was coined in 2003 by Goldman Sachs economist Jim O’Neill, who argued that given the relatively strong growth of the member countries, by 2050 the combined economies of the BRIC nations could eclipse the combined economies of the current richest countries of the world. While there was no suggestion that the BRIC countries were seeking to organize themselves into a formal trading bloc such as the European Union, it was noted that the BRICs were interested in forming an alliance in order to parlay their growing economic power into greater geopolitical influence.