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TMCNet:  Unity in bloc's diversity [China Daily: Africa Weekly]

[July 13, 2014]

Unity in bloc's diversity [China Daily: Africa Weekly]

(China Daily: Africa Weekly Via Acquire Media NewsEdge) The BRICS summit held in Durban, South Africa, in March 2013 marked the first five years of the group. During those five years BRICS members expanded their areas of concurrence in terms of national interests and strengthened the status of the group as a meaningful inter-civilizational macrostructure.


Thanks to its members' common interests and global goals, BRICS has become a political identity and established itself as an international association. And deeper and comprehensive cooperation among BRICS members is boosting the trend toward a multipolar world.

The world economy has been passing through rough times, which has forced the growth rates of BRICS countries to slow down too. The global economy may be moving toward a "post-BRICS" world marked by weaker investor interest in developing economies, but despite that it is too late to disregard BRICS. Attacks on BRICS, attempts to form parallel and competing blocs only go on to prove that the group has become a real factor in world economy and politics.

BRICS represents an alliance of economies that demand deep reforms in the international monetary and financial system (established after World War II), because the existing framework reduces the role of developing countries in the world economy and denies them their rightful say in international economic matters. BRICS countries have set an ambitious goal: to prevent the International Monetary Fund from imposing political and other conditions on developing countries for granting them loans to build infrastructure and/or run businesses.

The past year's efforts to establish a BRICS development bank is likely to bear fruit at the sixth BRICS summit in Fortaleza, Brazil, where the member countries are expected to sign an inter-governmental agreement to set up the bank. The bank is expected to more efficiently allocate global financial resources, and attract funds for long-term projects in developing and emerging market economies. The existing world financial system has a constraining effect on global demand, and the BRICS bank's aim is to overcome this "market failure".

The decision of BRICS countries to create a currency reserve of $100 billion - intended to ensure sustainability of their economies - can be seen as a success of past year's efforts. The reserve will play an important role at a time when leading Western countries' are tapering or ending their quantitative easing. This policy of advanced economies, pursued under slack world economy dynamics, resulted in capital outflow from developing countries, which were forced to depreciate their currencies.

The unexpected moves of the Western countries to stabilize their monetary policy compelled BRICS countries to adopt rather tough measures to protect their economies, better coordinate their policies and, in particular, launch several joint initiatives in the framework of the G20.

On the initiative of BRICS, a series of issues were actively discussed at the G20 last year, which included the problem of ensuring funding for long-term projects, the idea of developing a stock market based on national currencies, and the reform in the international financial system, such as regulation of over-the-counter derivative market and the "shadow" banking system. BRICS also favors the 15th review of IMF quotas.

In the year since the fifth BRICS summit, its members have achieved real progress in several areas. They have advanced markedly on a broader use of their currencies for trade settlements and payments, which has helped stabilize their economies in the face of a shaky world economy. They have also succeeded in prioritizing their areas of cooperation in science and innovation (for example, combating climate change and dealing with natural disasters and environmental catastrophes, designing and using new energy sources, and raising energy efficiency levels). And they are working on how to extend bilateral cooperation contracts in science - already signed by BRICS countries - to other groups of countries and thus convert them into multilateral contracts.

BRICS members have already reached agreements on several multilateral projects of strategic importance, the largest among them being the setting up of an alternative network infrastructure, an Internet segment independent from the United States and the United Kingdom. For this purpose, a cable system is being laid from Vladivostok (Russia) to Shantou (China), Chennai (India), Cape Town (South Africa) and Fortaleza (Brazil). The cable system will not only help boost the member countries' IT security, but also broaden technology transfer, increase commodity turnover and simplify financial operations.

Education has become an important cooperation area for BRICS members. Issues such as mutual recognition of university diplomas, expanded academic mobility, greater educational contacts are on the agenda. And the academic ranking of best institutions for higher studies in BRICS countries has already been developed.

On the political front, the Ukraine crisis has highlighted BRICS' role in the geopolitical stabilization mechanism. Russia appreciates other BRICS members' understanding of the situation in and around Ukraine, their disapproval of Western sanctions against Russia, and their stand that the position-of-strength policy does not ensure a balanced and peaceful crisis resolution. Russia lauds the fact that during the UN General Assembly voting, the other BRICS members were among those that supported Russia (either by voting against Western sanctions or by abstaining from voting).

Although it is difficult to list all areas of successful interaction among BRICS members, but it can be said that advantages of the complementary economies are used to the maximum to expedite economic development, it will benefit the entire group. Of course, there are disagreements among member countries, but today centripetal forces are stronger than the centrifugal ones, and common interests motivate countries to search for compromises to settle disputes.

More importantly, member countries know that BRICS is an important intermediate platform for negotiating individual interests, as well as to decide the strategy they should adopt at the G20 - which helps them to influence the agenda of global reforms. If BRICS countries succeed in working out a common goal on a certain point, the chances of the G20 approving it increase manyfold and, consequently, they would be in a better position to realize their geopolitical interests.

The author is deputy director of the Institute of Economics, Russian Academy of Sciences.

The opinions expressed on this page do not necessarily reflect those of China Daily.

(c) 2014 China Daily Information Company. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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