India-First-Global-Insights-Analysis -Sharing-PlatformIndia-First-Global-Insights-Analysis -Sharing-Platform

BRICS leaders meet in China to forge new path

, September 4, 2017, 0 Comments

brics-china-marketexpress-inAn annual BRICS summit in China has kicked off with the emerging market bloc in need of direction. The five members are divided as they face political and economic troubles.

Chinese President Xi Jinping on Monday opened a summit of five major developing economies, calling on BRICS leaders to play a more active role on the world stage despite clear economic and political differences between the countries.

“We should redouble our efforts to comprehensively deepen BRICS partnerships and open BRICS cooperation,” Xi told the leaders of Brazil, Russia, India and South Africa in the southeastern Chinese city of Xiamen, where they are gathering until Tuesday.

He also told fellow BRICS leaders – Brazilian President Michel Temer, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, and South African President Jacob Zuma – that they should fight against protectionism and play a more prominent role in international affiars.

“We need to make the international order more just and equitable,” Xi said. “Our ever closer ties with the rest of the world require that our five countries play a more active role in world governance. Without us … many challenges cannot be effectively resolved.”

Slashed ambitions

With over 40 percent of the world’s population spread across three continents, 25 percent of its landmass and over 20 percent of global GDP, the BRICS countries are already influential in world affairs.

They have already reformed international financial institutions like the International Monetary Fund (IMF) and the World Bank, and launched the New Development Bank.

But since BRICS was formed a decade ago amid predictions the bloc would become a global player, stark political and economic challenges have confronted the five countries.

“Some people, seeing that emerging markets and developing countries have experienced growth setbacks, assert that BRICS countries are losing their luster,” Xi said, recognizing the criticism of the bloc.

More differences than similarities

China’s once rapid double-digit economic growth has now slowed down to around 6 percent. The world’s second-biggest economy faces a raft of problems, including excess capacities in heavy industry, a highly speculative real estate boom and widespread high corporate indebtedness.

The Russian economy has been hit hard by a slump in crude prices and Western sanctions imposed due to Moscow’s involvement in the Ukraine conflict. Brazil and South Africa are battling political crises that threaten to remove their leaders as well as low commodity prices.

Trade within BRICS is also in China’s favor, resulting in complaints from fellow members. Outward investment from BRICS amounted to $197 billion (165 billion euros) last year, but only 5.7 percent was within the group.  China has also increasingly focused on its Belt and Road initiative and Asian Infrastructure Investment Bank, which has drawn attention away from BRICS.

There are also stark political differences between the countries. China and Russia are authoritarian, while Brazil, South Africa and India are democracies.

They also don’t necessarily share the same political and foreign policy goals, something that was highlighted by a recent two-month border dispute between India and China.

The summit in China has been overshadowed by North Korea’s nuclear test over the weekend, which was widely condemned.