Goa BRICS summit challenges are like old wine in new bottle
Zee Media Bureau
The bloc of leading emerging market economies Brazil, Russia, India, China and South Africa(BRICS) is meeting in Benaulim, Goa- for building bridges to new partnerships and finding common solutions to entrenched problems of the region.
The five BRICS countries represent over 3.6 billion people, or half of the world population and they have a combined GDP of USD 16.6 trillion. The summit is taking place in the backdrop of strained relations between the two biggest members China and India over political and trade issues.
BRICS summit is also taking place in the backdrop of insipid global economic growth, especially, when the developing economies are expected to contribute over 75 percent of global growth this and next year.
As per IMF, the average growth rate for emerging markets in 2016 is expected to be around 5% versus 1% in developed countries according to IMF projections. Given good growth projections, generally better debt-to-GDP ratios and higher foreign reserves than many developed countries, these markets are expected to do well in the long-term.
The challenge before the members is to showcase unity to the world in addressing challenges faced by the bloc. The US has also welcomed the efforts of BRICS countries to engage constructively in global issues of importance.
The biggest challenge is that trade between the member nations have not registered expected growth. BRICS countries lack mutual economic interests. Trade between them is now less than 320 bln dollars a year and declining. Their trade with the US and EU is 6.5 times higher. China’s trade with the rest of the world is 12.5 times higher. Bilateral trade between China and South Korea is almost as large as that between BRICS nations. China remains India's strongest trading partner followed by Russia and Brazil. India's exim trade with BRICS nations was strong at 6.5 percent and 7.8 percent, respectively, in 2015 and 2016. This summit also gains significance as the BRICS leaders are scheduled to engage in dialogue with counterparts from members of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation to boost regional cooperation.
Finance ministers of the BRICS group, on Friday called for greater coordination among the five member nations to protect their interests. "During the meeting, the countries agreed that the BRICS economies have a vital role to play in ensuring that the global economy is rejuvenated.The need for BRICS countries to co-operate and co-ordinate on the G20 issues was re-iterated," a finance ministry statement added. The meeting of the finance ministers and Central Bank governors took place ahead of the two-day BRICS (Brazil, Russia, India, China, South Africa) leaders` summit here beginning on Saturday.
The ministers also discussed strategies on enhancing global growth, key issues of co-operation under the G-20 agenda, international financial architecture and the way forward on new areas of co-operation.
According to the statement, the ministers stressed on the need for timely implementation of the International Monetary Fund (IMF) quota reforms.
"The timely implementation of the 15th General Review of Quotas was emphasised by all the BRICS countries," the statement said.
The way forward on new areas of co-operation proposed by India, such as the BRICS Institute of Economic Research and Analysis as well as BRICS Credit Rating Agency, were also discussed, the statement added.
BRICS was formed in 2011 with the aim of using its growing economic and political influence to challenge Western hegemony, and nothing much has changed when it comes to thier trade or polictical relations.
The BRICS leaders will get down to talks on Sunday, with enhancing trade ties along with "regional and global terrorism" issues that are expected to be on the agenda. It is to be seen how the summit succeeds in addressing challenges that have persisted ever since its inception.
With agencies input