The BRICS countries were supposed to change the world as they transitioned from being simply a financial markets acronym to a more unified group of countries with a growing institutional capacity to project economic influence. The large and dynamic emerging economies of Brazil, Russia, India and China (with the later addition of South Africa to round out the acronym) were supposed to herald a shift in the world’s center of economic gravity.
The long-dominant but aging economies of the United States, Japan and the European Union would be, if not replaced, at least forced to make room for the spry newcomers.
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Well, there’s been a shift alright, but not really the one that was envisioned only a few years ago. Instead of bounding into the annual summit that began today youthful and strong, the BRICS countries are more likely to resemble a group of tottering old men, leaning on each other for support and chattering on about their various infirmities.
China, by far the largest economy among the five BRICS nations, is looking at an economic slowdown that has analysts concerned about its prospects for continuing the rapid growth that has set it apart from other nations for many years. A major decline in the country’s stock market and the government’s heavy-handed application of capital controls has others questioning the wisdom of investing there.
Russia, which is hosting the summit in the city of Ufa, is expected to show negative growth this year, the combined result of a decline in global oil prices and international sanctions. And the prospects for the future do not look particularly rosy for Moscow. As a result of its invasion of Ukraine’s Crimean peninsula and its continued support of rebels in eastern Ukraine, the European Union recently voted to extend sanctions until January of next year, with further extensions possible.
South Africa, meanwhile, is battling stagflation and is facing sub-2 percent growth in 2015, while Brazil is looking down the double-barrel of stagflation and negative economic growth for the year.
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Of the five, India appears to be faring the best in the near term, with estimates of economic growth approaching 8 percent in 2015. But even there, many analysts are concerned about the reliability of the economic numbers being provided publicly.
According to Bruce Jones, director of the Foreign Policy program at the Brookings Institution, the economic prospects for the BRICS countries aren’t the only thing that has changed in recent years. China’s political and military position, particularly in the Pacific, has become much more forceful. And Russia’s behavior in Ukraine, combined with a general bellicosity toward its neighbors, has also altered previous dynamics.
“[T]he strategic tensions between the BRICS are now more visible,” Jones wrote in a blog post this week. “In the period immediately after the global financial crisis these were overshadowed both by their aim of recovering from the crisis, one shared with the West, and their common ambition to gain a greater voice in the management of the global economy. But China’s growing assertiveness has shaken this dynamic.”
He adds, “Far from cozying up to China, several of the BRICS are nervous about China’s direction, and keen to restore and refresh their ties with Washington.”
With regard to Russia, however, Jones says not to expect too much in the way of condemnation or even a collective cold shoulder.
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“[T]he members will do the exact opposite of isolating Russia; they’ll be on stage with Putin and they’ll refrain from any public criticism of his strategy in Ukraine. They aren’t particularly happy with his strategy there — but their view is: This is not our problem.”
Coming out of the summit, Jones says, the BRICS countries can be expected to “double down on their pitch for a greater role in global economic governance.” Indeed, he points out, “The BRICS’ slowing collective growth lends all the more urgency to their concern to increase their voice and decision-making role in the global economy.”
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