It’s been a long time since Western mass media started mocking at BRICS - the informal alliance of Brazil, Russia, India, China and South Africa. Numerous British, French and American editions have been questioning the transparency, stability, unity and viability of the alliance.
A lot of different opinions has been expressed. For example, it is said that BRICS is nothing but a group of countries that can be attractive for foreign investors. Others say that this is a symbolic name for the entire “non-Western” world or just an abbreviation, which doesn’t mean anything significant.
What are these opinions based on? Should international investors trust them?
According to Eugene Olkhovsky, a Canadian expert from , the mentioned claims are based on the following factors:
· In 2001 Jim O'Neill, presently the Chairman of Goldman Sachs Asset Management, coined the phrase in a 2001 paper entitled "The World Needs Better Economic BRICs." Hi did mean Brazil, Russia, India and China by saying BRIC. These were the economies to invest in during the first decade of the new century. In a couple of years BRIC turned into BRICS (South Africa was added). So it is a specific name for the international alliance of the 5 mentioned emerging economies.
· However the alliance is informal (no constituent documents, no coordinating committee or any other official things). BRICS is still just a group of fellow countries with common problems, interests and ambitions.
· Apart from the rather abstract notion of “emerging economies ” there is nothing more to speak in favor of the union. The BRICS members have different cultures, languages, religions, state systems and economic models. The only significant thing that unites them is that they are definitely “non-Western”, which is the ground for laying claim to be the counterbalance to the West.
· BRICS is a child of globalism. The West managed to involve those developing states in the global trade and financial system, thus improving the lives of millions of people living in those BRICS states. That is why BRICS shouldn’t be opposing the Western world.
· Most products exported by BRICS go to the West. Without the West the new alliance will have a lot of economic problems. It appears that the developing economies are directly dependent on the developed markets. If the West is hit by a major crisis, BRICS will also feel the consequences.
Tips for investors: what are BRICS’s major weak points?
It is been 3 years since BRICS members started holding top-level summits. They keep discussing major issues but somehow cannot make any major decisions. For example, the latest BRICS summit was held in China in April 2011. There were no significant achievements apart from creating the so-called “new international trading platform”.
The members failed to put up a single candidate for the post of the IMF’s Managing Director.
They looked very uncertain and passive in their protests against NATO’s military intervention in Libya. When voting in the UN, South Africa supported the intervention, the other BRICS members abstained from voting.
Moreover, BRICS still cannot create their own currency system. China keeps saying they are not ready for it. BRICS cannot create a big-scale and high-capacity internal market as the buying power of the population is low.
All the mentioned countries are under the threat of being hit by color revolutions, which will put an end to their economic development.
Everything looks controversial.
According to the analytic team of FreshForex, the Western media are right to some extent. But one shouldn’t absolutize all the negativity:
· BRICS used to be an abbreviation. Now the alliance seems to be fairly significant. BRICS is 40% of the global population, 18% of the global economy and 50% of international investments. As a union the 5 countries do impress. Obviously, some Western powers would like to see them as single units (not a union) because together they are a major power.
· BRICS has been included in G20 in order to enliven the global economy.
· Moreover, the EU, with all its close internal ties, now has a lot of problems. It turns out that the EU countries have little in common as well. These days more and more European politicians want Greece and Portugal to leave the eurozone.
· The BRICS countries do a lot to save the global economy from collapse, probably even more than others. For example, all the stock markets around the world are currently depend on China’s economic growth.
The BRICS countries share some political goals. They want:
- · To initiate a reform of the global financial system
- · To combat inflation
- · The accelerate the growth of their domestic economies (exchange of resources, experts and Technologies)
- · To struggle for peace (No BRICS state is currently involved in any armed conflict, as opposed to the West).
As for color revolutions, they can break out anywhere. The latest Occupy Wall Street activities or unrest in Israel could have been escalated into some revolt, if there had been parties concerned with efficient management and substantial sponsorship.
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Does BRICS have a future?
