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Emergence of BRICS as an Economic Bloc

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 Transnational Corporations Review Volume 7 Number 1 March 2015
www.tnc-online.net info@tnc-online.net 110-120

Emergence of BRICS as an Economic Bloc

Badar Aalm Iqbal and Eliane Cristina de Araújo

Abstract: The emergence of the BRICS economic bloc has got the increasing attention of the global
community. This economic bloc accounts for 1/3 of the global population. Similarly, the bloc’s aggregate
nominal GDP amounts to US$13.6 trillion. The average growth rate of the BRICS countries during the
last five years has been nearly 10 per cent and the growth forecast for the bloc in the coming years is
estimated to be at 10 per cent, indicating the growth potential and opportunities of this emerging bloc.
Since the BRICS economies are coming up as potential trade, business and commerce destinations for the
global business community, their economic structure, contribution and role are of paramount significance
and, therefore, more research is needed on these horizons. With this in mind, the present paper examines
the BRICS’ economic significance, contribution and role in the growth and development of the world
economy. The paper further explores whether the BRICS grouping remains a myth or could prove to be a
reality.

Keywords: Economic structure, contribution, economic bloc

1. Introduction
The term BRIC was created in 2001 as a concept to represent the changes that were taking place in the
international order, in which the countries of the “South” were playing an increasingly important role in
global economic growth and in the direction of international politics. At that time, there was no indication
of the possibility and/or the viability of the four initial countries (Brazil, Russia, India and China) to
become a formal group. However, with the growing popularity of the term, the governments of these
countries seized the opportunity to use it in support of their national objectives. It was thus, until 2006,
when the first meeting of the foreign ministers of the BRIC countries took place, with academics,
journalists and politicians from various parts of the world, including the countries themselves, affirming
that the BRIC represented a change in the world order.1

Institutionalized at the Ministerial Meeting in Yekaterinburg, the BRIC bloc resulted in a combined action
between four countries that were previously considered individually. The BRIC then began to exist as a
mechanism through which member countries could exchange views, seek convergences, identify areas of
cooperation and influence the international agenda.

1
See O’Neill (2001) and Wilson and Purushothaman (2003).

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 Badar Aalm Iqbal and Eliane Cristina de Araújo

With the entry of South Africa, formalized at the third BRIC summit in April 2011, the BRIC became the
BRICS, making the bloc even more representative. Despite having economic, territorial and population
dimensions inferior to the other BRICS countries, South Africa has become the gateway for the BRIC in
Africa, not to mention having 23% of Africa’s GDP and a modern economy characterized by important
industrial and financial sectors. The entry of South Africa also brings an important contribution to the
Group due to the country’s economic importance on the African continent, its constructive political action
and its geographic representativeness. The BRICS, as it is now called, comprises countries from all
continents, except Oceania.

The BRICS, touted as the newly emerging growth pole of the globe, constituted in 2012 25 per cent of the
world GDP, 18 per cent of the global trade, and 41.7 per cent of the world foreign exchange reserves.
Added to this, 25 per cent of the global population lives in the BRICS countries. This bloc also accounted
for 9.4 per cent inward FDI flow and 5.3 per cent outward FDI flow. The most significant aspect of the
bloc is its 11 per cent voting share at the International Monetary Fund (IMF) as compared to 17 per cent
for the US and 36 per cent for the EU. Similarly, the economic bloc has 28 per cent of intra-group trade
growth which stood at US$230 billion. Likewise, in terms of consumer expenditure in the BRICS
economies, the percentage of GDP ranges from 35-65 per cent, and there is a strong middle class in all
five nations, both of which points are really the major drivers of growth in each country (Hindustan Times,
2012).

In this context, the aim of this research is to investigate the importance of the BRICS (Brazil, Russia, India,
China and South Africa) as a bloc emerging in the 21st century, highlighting their contribution and role in
the growth and development of the world economy, as well as exploring if the BRICS grouping is still a
myth or a reality. To achieve the proposed aims, the remainder of this paper is organized as follows:
Section 2 examines the economic structure of the BRICS and discusses their importance to the global
economy; Section 3 looks at possible directions for the BRICS; Section 4 presents possible areas of
cooperation within the bloc and the principal fears and initiatives of the BRICS countries; Section 5
discusses the response of the BRICS to the European crisis; Section 6 explores the BRICS summits; and
Section 7 concludes the paper.

2. Economic structures and contribution

2.1. Economic structure
Some of the vital and strategic economic variables which speak about the existing economic trends in the
BRICS (table 1) could create business facilitation and also provide greater opportunities for expansion of
trade, business and commerce in member countries (Khalil 2012).

Table 1. Economic variables of BRICS countries in 2011

Country GDP GDP GDP per Inflation Unemployment Population Main
(PPP) growth capita below sector of
poverty line growth
Brazil $2.178 2.3 % $11273 6.9 % 5.7 % 15.5% Services
trillion 67.4 %
Russia $2.23 4.9 % $15807 7.2 % 6.7 % 13.0% Services
trillion 59.1 %

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 Emergence of BRICS as an Economic Bloc

India $4.05 8.5 % $3408 9.1 % 9.4 % 37% Services

trillion 55.2 %
China $10.11 11.4 % $7544 9.11 % 9.4 % N.A. Industry
trillion 46.4 %
South $525.8 4.6 % $10518 4.6 % 24 % 35.7 % Services
Africa billion 78.5 %

Source: Business Review; IBA; Karachi; Vol. 7; No.1; January-June 2012.P.36.

Explanation and further analysis of table 1 is very important to highlight the economic variables and its
implications for the BRICs countries. Among the BRICS (Brazil, Russia, India, China and South Africa),
with respect to GDP (Purchase Power Parity) China has the highest figure of GDP followed by India, as
an important note the difference between China and India being around 6 trillion US$. This is further
followed by Russia, Brazil and South Africa. Comparison of GDP growth rates shows China topping the
list with a figure of 11.4% growth rate. This is followed by India, Russia, South Africa and Brazil with the
figures of 8.5%, 4.9%, 4.6% and 2.3% respectively. Per capita GDP which considers the population as the
denominator is an important measure for inter-comparison. Russia has the highest per capita GDP
followed by Brazil, South Africa, China and India. China and India in the last shows the impact of high
population in per capita GDP. Though China has the highest population still surprisingly China is not the
last rather it is India at last.

One of the important macroeconomic variable pertinent for the economy outlook is inflation. Generally all
countries under BRICS shows high inflation except South Africa with a low inflation rate of 4.6%.
Interestingly, both the countries having highest GDP that is China and India has high rates of
unemployment too (both having unemployment rate as 9.4%). Tough causal effect is not checked upon,
still this is an inverse relation between the two variables. While data for China is not available it’s clear
that India has the highest population below poverty line followed by South Africa, Brazil and Russia. This
clearly implies that BRICS emergence must also target the eradication of poverty to meet the dual
objectives of growth and development. An interesting similarity among all five BRICs countries is that
their main sector with respect to highest contribution n is Service sector except for China that has industry
as the highest contributing sector. This implies future knowledge sharing between the countries to tap the
potential of growth as an economic bloc.

2.2. Contribution towards the global economy

This is true to say that the BRICS have emerged as large as the euro-zone. The relative share of the
BRICS countries in the world GDP at current prices has increased enormously. In 2000, the share of the
BRICS countries in the global GDP was just 8.4 per cent. This share went up to 19.2 per cent in 2010, i.e.,
more than double in a span of 10 years. According to the IMF estimate, the relative share of the BRICS
countries in the global GDP will be nearly 24 per cent by the end of 2016 (Economic Times 2012).

In terms of global exports, the contribution of the BRICS countries in 2000 was 6.9 per cent while in 2010
the economic bloc registered an increase of 2.4 times over the 10 year period. In regard to the contribution
of the BRICS economies in the global FDI flows, the relative share which was at 5.3 per cent in 2000
went up enormously to a figure of 17.8 per cent in 2010, i.e., a rise of 3.4 times. Additionally, China has

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 Badar Aalm Iqbal and Eliane Cristina de Araújo

emerged as the second largest economy in the world, replacing Japan, and India came up as the tenth
largest economy in terms of GDP during 2011 (table 2).

Table 2. Comparative share of BRICS countries in global GDP in 2011

Country Share in global GDP Rank

Brazil 3.3 6th

Russia 2.4 9th
India 2.6 10th
China 9.3 2nd
South Africa 0.6 29th

Source: The Economic Times; New Delhi; March 29, 2012. P.11.

Now we will examine the comparison with respect to emerging trends in business favorability in the
BRICS countries in 2011. In terms of the Business Favorability Index (BFI), India is the easiest country to
do business in (table 3). Next to India is China followed by Brazil, Russia and South Africa. Similarly, in
regard to the average number of days to start business in the BRICS economies, South Africa is on the top
followed by India, Russia, China and Brazil. In the case of Russia, China, India and Brazil, companies
must adopt trans-national or multi-domestic action plans to avoid cultural conflicts by focusing on the
local aspects of the market.

Table 3. Business favorability comparison in BRICS Economies in 2011

Country Ease of doing business Average number of days to
start a business
Brazil 120th 119
th
Russia 126 30
th
India 35 29
China 91st 38
nd
South Africa 132 22

Source: As table 1.

3. Where could the BRICS lead?

Of all the many multi-nation agencies that came up during the last century, i.e., the 20th century, very few
have emerged as a force to reckon with. Now it is high time to see what kind of future lies ahead for the
BRICS countries. There are four vital and strategic areas wherein the BRICS could lead and play a
catalytic role in dealing with major global issues which are of far reaching impact, consequences and
implications to the global community (Hindustan Times 2012).

The permanent members of the United Nations are the winners of the Second World War and, accordingly,
they have emerged as the virtual monarchs of the globe. If the BRICS grouping is successful in the
attainments of its goals and the West loses its credibility (possible under the present scenario), then the

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 Emergence of BRICS as an Economic Bloc

BRICS could become the P5 and also bring the desired change to the existing global bodies like the UN,
the IMF and the World Bank. During the last many decades, the G8 has been the rule making body with
respect to the world economic and political setup. In the present scenario, three countries of the BRICS
bloc may emerge as an economic powerhouse and may create a new economic and political order. If three
other countries, especially Indonesia and Mexico, join the bloc then this bloc could replace the G8. Under
the present economic scenario this could happen.

India, Russia and China were originally part of the Non-aligned-Movement (NAM) and all three were
planning to drift from the West. If the United States were to alienate the nations, then there would be
every possibility that the BRICS bloc could develop the non-western contours that defined NAM. It is
unlikely, however, that the bloc is forming any worthy alliance in the coming years. Analysts believe that
if the BRICS proved to be a successful economic bloc in reality, then there would be a possibility that this
bloc could emerge as the G20 or the G77 group in the long term. Conceptually, the BRICS grouping may
increase its membership to a large number of countries who are like-minded and could evolve into a voice
for all in between the existing economic superpowers. However, as the interests of the segments diverge,
the BRICS may devolve into yet another amorphous organization or bloc such as the G20 and the G77.

4. Cooperation and collaboration

4.1. Areas of cooperation
The BRICS countries have identified three areas of cooperation and collaboration. Through cooperation,
the BRICS intend to explore meaningful partnerships for common development, address global challenges
together and contribute to furthering world peace, stability and security. The three areas are, thus, as
follows:

 The BRICS nations could work together with regard to attaining energy efficiency and developing
clean energy sources. These issues will require large investments in research, as well as the
sharing of operations and technologies;

 The bloc will tackle issues with respect to population and employment generation along with
constraints arising from increasing population growth, especially in China and India. Other issues
whereon much emphasis is to be given by the BRICS countries are urbanization and transport, the
two major handicaps affecting the growth and development of the BRICS economies;

 The bloc will concentrate more on the synergies of member nations and take the BRICS
economies on a path that could prove beneficial for all member nations.

It was for their various shared interests in building a new global governance regime that the BRICS could
identify some common agendas and principles, among which may be noted the strengthening of
multilateralism, that is, the reform of the United Nations and of the international financial institutions, to
ensure greater effectiveness, efficiency and representativeness, especially among the emerging and
developing countries; facing climate change; the condemnation of terrorism in all its forms and
manifestations; supporting the G20 as the primary forum for international economic cooperation, so that it
has a larger role in matters of global economic governance; and the reform and improvement of the

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 Badar Aalm Iqbal and Eliane Cristina de Araújo

international monetary and financial system, whose inadequacies and inefficiencies were evidenced by the
international financial crisis.

With regard to the areas of cooperation, specifically the economic and financial areas, it is important to
highlight the first meeting of the BRIC Finance Ministers, held in November 2008 in São Paulo, at the
sidelines of the G20 summit. Thereafter, the Finance Ministers and the Presidents of the Central Banks of
the BRIC met frequently at the sidelines of the G20 meetings. These meetings had an important role in the
consolidation of the group, which claimed for a bigger participation of the developing countries in the
reform of the international financial institutions, such as the IMF and the World Bank. The last meeting of
the Financial Ministers of the BRICS took place at the sidelines of the G20 meeting in Paris in 2011.

With regard to agriculture, the BRIC Ministers of Agriculture and Agrarian Development met in Moscow
in March 2010. There they drafted a joint communiqué proposing the creation of a BRICS agricultural
information system; the development of the general strategy to ensure access to food for the most
vulnerable populations; a reduction in the negative effects of climate change on food security and the
adaptation of agriculture to the changes; and an improvement in the cooperation and innovation of
agricultural technology.

It is also important to emphasize the cooperation for disseminating statistics relating to the BRICS
members: The first meeting of the Heads of the BRIC Statistical Institutes was in New York in 2010 at the
sidelines of the UN Statistics Committee meeting and the launch of the BRIC Statistics publication was at
the second summit on April 15, 2010 in Brasilia; the second meeting of the Heads of the BRIC Statistical
Institutes was in Rio de Janeiro in 2010 and, finally, the launch of the updated version of the Statistical
publication, which included data from South Africa, was at the third summit on April 14, 2011 in Sanya,
China.

4.2. Persisting fears

Economic analysts have a fear that the BRICS bloc will ultimately become a plaything of Beijing. There
are reasons for this. China’s economic clout is larger than the other BRICS countries combined together.
China accounts for 9.3 per cent of the global GDP, which is a little over half of the BRICS combined 18.2
per cent.

Structurally, the BRICS nations are exaggerating China’s influence. China is the number one or two
trading partner of India, Russia, Brazil and South Africa. China’s ambitions within the bloc have clearly
grown. “When we first put it together, he was cool to an economic agenda within BRICS. Today, as its
economy has become so much stronger, he is pushing a much broader commercial agenda within the
BRICS”. This is even truer now that Russia has become uninterested in economics as its fortunes have
been dwindling.

Added to all that is whether Indonesia will replace India in the BRICS- the league of powerful emerging
nations in the near future (Sunday Express 2012)

Though growth has slowed down in India, and Indonesia has emerged as the favourite for foreign
investors, there is no chance of Indonesia replacing India. India will likely remain in the BRICS. What
could happen, instead, is that Indonesia may join the BRICS by 2014 and the league may be called the

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BRIICS. India is a much larger economy which is expected to do well in the coming years. The growth
rate of the Indian and Indonesian economies stood at second and third in the world which are the highest
rates among the G20 countries. India and Indonesia have large local markets which helped both countries
protect themselves from the world economic recession and the world trade contractions.

Indonesia also attracted world investors’ attention during this period when GDP growth was more than 6.5
per cent over the previous years. With Indonesia likely to join the BRICS bloc by 2014, India-Indonesia
economic relations will strengthen further. Economic and political similarities between India and
Indonesia will foster Indian FDI into Indonesia, as Indian investors are used to the challenges of a young
democracy. Despite the world economic crisis, trade between India and Indonesia has strengthened over
the last decade. Indonesia which is a major coal producer in the world attracted several Indian firms which
were keen to invest in coal mines in the country. Nearly 70 per cent of India’s coal needs are imported
from Indonesia. Over the years, quite a few Indian firms have set up operations in Indonesia. The Tata
group, Anil Ambani group, Adani group and Essar have all bought stakes in Indonesian mines.

India is Indonesia’s fourth biggest destination of non-oil/gas exports after China, Japan and the US.
Exports to India increased by 35 per cent to US$13.3 billion in 2011. FDI from India went up by 37 per
cent to US$4.3 billion mainly in manufacturing goods, namely pharmaceuticals, motorcycles and textiles.
The bilateral trade is expected to increase to US$25 billion by 2015. This all indicates that “India will
remain in the BRICS (and) that Indonesia may join the BRICS.

4.3. Initiatives

The five country bloc known as the BRICS has taken the first initiative towards carrying out mutual trade
in local currencies by signing an agreement to extend credits in local currencies under the BRICS inter-
bank cooperation mechanism. These countries have also signed the Multilateral Letter of Credit
Confirmation Facility Agreement between the BRICS countries Exim/Development Banks (Economic
Times 2012).

India has pressed upon the other members of the bloc to ease up on business visas on business visas to
create and facilitate a rise in intra-group trade and investment. The bloc economies have also put forward
the proposal to establish a Development Bank to provide aid with easy terms for the developing
economies. This proposal was referred to Finance Ministers of the bloc countries to examine and report
back. This move is seen as a combined effort to deal with the problems of a bumpy global economy
affected by a sovereign debt crisis which worries many in European economies and with the protectionist
tendencies of some developed nations.

The participating banks include the Export-Import Bank of India, Brazilian National Developing Bank
(BNDES), the State Corporation Bank for Development and Foreign Economic Affairs of Russia, China
Development Bank and the Development Bank of South Africa. The agreement intends to address the
demand for fully convertible currencies from transactions among the BRICS nations, and thereby help
reduce the transaction costs of intra-BRICS trade.

The most noteworthy feature is that the World Bank expressed its willingness to support the proposal of
the BRICS countries to establish a development bank to insulate their economies from the ongoing

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 Badar Aalm Iqbal and Eliane Cristina de Araújo

economic hardship, rising oil prices and currency volatility. The blueprint of the development bank would
be in line with the World Bank and the Asian Development Bank to mobilize resources for infrastructure
and sustainable development (Hindu 2012).

5. BRICS and EU debt crisis

The international crisis that hit the world in 2008, mostly in the developed countries, had a positive impact
on the image of the BRICS since the emerging countries were less affected by the crisis as compared to
the developed world. This is evident when comparing the growth rates of the members of the BRICS
between 2008 and 2011 (4.87% on average), the growth rates of the developed countries (0.29% on
average) (IMF, 2012) and the global growth rate (2.94%), as shown in Table 4.

Table 4. Gross domestic product (Million US$), constant prices 2008-2011

World Advanced Brazil China India Russia South BRICS
economies Africa
2008 2.801 0.055 5.172 9.635 6.903 5.248 3.619 6.115
2009 -0.574 -3.485 -0.330 9.214 5.877 -7.800 -1.537 1.082
2010 5.137 3.012 7.534 10.447 10.092 4.300 2.890 7.053
2011 3.833 1.594 2.733 9.237 6.836 4.300 3.123 5.246
Average 2.943 0.294 3.860 9.633 7.427 1.512 2.024 4.874

Source: International Monetary Fund, World Economic Outlook Database, October 2012.

An analysis of table 4 is important for an overview of the economic bloc. In 2008, with respect to GDP
China has the highest GDP followed by India, Russia, Brazil and South Africa. In 2009, several of the
countries from BRICS had a negative GDP indicating a slowdown in the economy. Brazil, Russia and
South Africa shows a negative GDP in 2009 while the figures for China and India stands at 9.214 US
million dollars and 5.877 US million dollars, respectively. Year 2010 proved to bring prosperity in the
GDP with China and India touching the GDP at 10 million US dollars. But a downfall is seen in the year
2011 with India GDP falling to around 7 million US dollars for India and 9 million US dollars for China.

The BRICS have acted as engines of global economic growth, with the Chinese and Indian economies
being distinctively ahead of this dynamism, which also highlights the different capacities of the BRICS
members to withstand crises. Thus, the European quest for the participation of the BRICS countries in
containing the crisis can be explained by the current economic scenario, in which the developed countries
have lost momentum and decreased their share of responsibility for global growth, while the emerging
countries, notably the BRICS, are standing out for their high growth rates.

In 2000, according to data from the International Monetary Fund, the participation of the BRIC countries
in the global GDP was 8%. In 2011, with the entry of South Africa, this number increased to 25%. During
this period, a significant portion of the world’s GDP growth was driven by the expansion of the BRICS,
which suggests that their deceleration would be more damaging to the world economy today than it would
have been a few years ago. Although the BRICS have high rates of economic growth, their performance
has been lower in lower in recent years. The average real GDP growth of the BRICS countries was 7.05%

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 Emergence of BRICS as an Economic Bloc

in 2010 and only 5.24% in 2011. Already in 2012, this growth average fell to less than 5%, and the
estimates are that this level will continue through 2013 before recovering.

One of the most important reasons for the slowdown in growth is the continuing deterioration of the
economic situation in Europe. Expressing great concern over the persistent debt crisis in the European
Union zone known as the euro-zone and its fallout on the global economic order, the BRICS countries
have called for a collective action to deal with the trends and situation. The adversity of the financial crisis
is being faced by all. Hence, there is an immediate need to work together to overcome the problem of the
debt crisis. There is a need to end the EU crisis as quickly as possible before it gets worse because it has
been severely impacting all countries. The world has to stop accumulating risks and this is only possible if
the BRICS countries work closer together (Hindu 2012).

6. The BRICS Summits2

Since 2009, the BRICS countries have been meeting in Annual Summits, as follows: First BRIC Summit
in Yekaterinburg, Russia on June 16, 2009; Second BRIC Summit in Brasilia on April 16, 2010; Third
BRIC Summit (Sanya Declaration) in Sanya, China on April 14, 2011; Fourth BRIC Summit in New
Delhi, India on March 29, 2012; Fifth BRIC Summit will be in Durban, South Africa in 2013.

At these meetings, the leaders of the BRICS discuss the global economic situation, global development
issues and the potentials for cooperation between the member countries of the group. Among the
discussion topics are the following: i) the central role played by the G20 summits in addressing the
financial crisis; ii) the necessity of reforming the international financial institutions to ensure greater
representation of the emerging economies and developing countries; iii) the importance of an international
economic and financial reform based on democracy, transparency, standardization, regulation and risk
reduction; iv) the role played by international trade and foreign direct investment in the recovery of the
global economy; v) the implementation of the concept of sustainable development; vi) advocacy for
greater coordination and cooperation among states in the energy sector, supporting the diversification of
energy resources and supply; vii) the provision of international humanitarian assistance and the reduction
of natural disaster risks; viii) the promotion of cooperation between countries in the fields of science and
education; ix) the necessity of achieving a multi-polar world and, finally; x) the condemnation of terrorism
in all its forms and manifestations.

A summary of the activities of the BRICS members demonstrates how political coordination has been
accelerating and also resulting in concrete actions in specific fields. As can be seen from the long list of
meetings already held, the development of the agenda of the BRICS has multiplied the meetings of the
ministers from different areas and of the senior government officials. This shows how this coordination is
spreading to different areas: politics, such as trade, finance, agriculture, health and culture. Throughout
this process of political coordination between the partners who, until recently, rarely positioned
themselves together, the results have been impressive. With the weakening of the economic leadership
roles of the United States and the European Union, which have been severely shaken by the financial and
economic crisis of 2008 and the current European crisis, the BRICS members have become important
participants in the international meetings in which they discuss ways to overcome the current crisis. The

2
See BRAZIL. Ministry of Foreign Affairs. Events under the auspices of the BRICS: from 2006 to 2012.

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 Badar Aalm Iqbal and Eliane Cristina de Araújo

novelty of the international scenario is the coordinated voice of five emerging countries, which have clear
aims to be called to participate in the decision-making forums of the main international organizations and
to have a say in the pursuit of solutions to the major problems of today.

Leaders of the BRICS countries, besides promoting mutual trade in local currencies and the creation of a
Development Bank, have further decided to create effective coordination in terms of their reflexes towards
economic and political issues with which the global economy has been confronted. The five leaders
blamed the West for messing up their finances, which had a cascading effect around the world and called
for reforms with regard to multilateral agencies. The leaders were of the view that dialogue is the only
means to resolve the persistent crisis in Syria and Iran. The leaders further discussed at length the existing
turmoil in West Asia and agreed in principle to work together for a peaceful resolution of the crisis. There
is an urgent need to avoid political disruptions that create volatilities in global energy markets and affect
trade flows.

Multilateral institutions of global political and economic governance established more than 60 years ago
have not kept pace with changing global needs. While some progress has been witnessed in international
financial institutions, there has been a lack of movement on the political horizon. The BRICS countries
should speak with one voice on important and strategic issues like the required degree of reform in the
existing set up of the UN Security Council. The outcome of the last Summit was as follows:

 There was an urgent need to implement IMF quota reforms before the IMF and the World Bank
meeting in October 2012. The reforms were sine-quo-non to ensure legitimacy and effectiveness
of the Fund/Bank;
 Welcome candidates for president of the World Bank from developing economies;
 The West should avoid the creation of excess global liquidity. Excessive volatility in commodity
prices creates more risk to global recovery;
 Set up a study group on the BRICS Bank.

7. Conclusions

From the foregoing discussion, it has been clear that the emerging economic bloc (BRICS) is totally
committed to the three most strategic and vital segments of global order, namely economic management,
sustainable development and cooperation, which is the need of the day. In other words, the BRICS
countries are very much concerned and, hence, are working toward a “partnership for stability, security
and prosperity”.

The main focus of the last summit was on the continuous, deep and complicated changes of the global
situation, the euro-zone debt crisis, the US financial problems and turbulences in West Asia and North
Africa along with the multiple uncertainties of global economic recovery. The main mission of the BRICS
is not directly related to values. After all, values are not central in today’s world. Other significant issues,
namely climate change and trade disputes, are not directly linked with values. The inclusion of South
Africa in the BRICS is misunderstood. The BRICS must not become another “trade union” or voice of the
“global opposition”.

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 Emergence of BRICS as an Economic Bloc

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Contact Information

Prof. Dr. Badar Aalm Iqbal, Department of Commerce, Aligarh Muslim University, ALIGARH (UP) India
(badar.iqbal@myamu.in); Dr. Eliane Cristina de Araújo, Professor of the Graduate Program in Economics,
State University of Maringá, Brazil. Email: elianedearaujo@gmail.com.

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