With a loss of economic luster in recent years, the BRICS nation, once seen as hot emerging markets including Brazil, Russia, India, and China seem to be beleaguered for quite some time now. Brazil and Russia are struggling with recession, while China is trying to delay what seems to be an inevitable slow down, and India, while still of interest to global investors, is struggling to put through the economic reforms that would help it reach its full potential.
Figure: BRICS’ Nations
BRICS is an acronym of five major emerging national economies: Brazil, Russia, India, China and South Africa. The countries represent over 3.3 billion people, nearly about 43 per cent of the world’s total population. According to statistics of the World Trade Organization (WTO), the participation of BRICS in global exports more than doubled between 2001 and 2011, to 16 per cent. In these eleven years, their total exports grew more than 500 per cent, while total global exports grew 195 per cent. Between 2002 and 2012, intra-BRICS trade increased 922 per cent, from US$ 27 billion to US$ 76 billion, while during 2010-2012, BRICS´ international trade rose 29 per cent, from US$ 4.7 trillion to US $ 6.1 trillion. It is estimated that trade among the BRICS nation stood at US$ 6.14 trillion in 2015.
What went wrong in the smooth journey of BRICS which resulted in the collapse of the benefits being earned till now? What all factors acted as barriers to the flourishing trade all over the globe? The BRICS countries have no overarching political linkage or philosophy, no reason to consider each other obvious partners apart from the idea of fetishizing GDP growth as prime indicator of development over any other socio-political development indicator, which didn’t materialize as planned. One of the major reasons of falling out has been huge disparities among the primary trade partners, financial investors and culture. In order to cope up with grouping of five as BRICS, member countries themselves as individuals skipped great opportunities. Merely few steps are taken beyond BRICS memorandums of understanding and half-hearted mechanisms.
The Way Forward:
As a measure to overcome all these deficiencies, India took a step forward and proposed to create a portal consisting of all the trade opportunities available to the BRICS countries. Besides acting as an information platform, such a portal will also help BRICS nations to engross greater understanding, appreciation and visibility. Along with this, the Government of India also wishes that any change in the trade practices, licensing, tariffs, duties, etc. by any one member country should be notified to other members of BRICS as well.
If this step gets successful, BRICS will be benefitted and overall trade will be better off. For example, presently the Indian Government has imposed anti-dumping duty on imports of Russian Chemical, used by electrical and electronic industry, to protect domestic players from cheap in-bound shipments. If this common platform is created, such actions can be discussed and sorted as soon as they get visible on the forum. Any of the member country can protect its country’s trade by avoiding further rules and regulations, thereby strengthening their relations.
After the eradication of the internal conflicts among the BRICS nations, each member country can work on strengthening its inner capabilities. Few things which need to be prioritized by the policy makers are as follows:
- Build a political support across the spectrum in each country for a common set of goals and benefits.
- Understand each other’s cultures and benefit from scientific and educational exchanges.
- Partner with institutions of advanced research and higher education
- Leverage each other’s strengths (South Africa’s financial sector, India’s technology, China’s manufacturing, Brazil’s agribusiness and Russia’s energy and mineral resources.)
If these lessons are heeded, the world will be watching to learn from the collective ingenuity of the BRICS nations.
Categories: Story Of The Week