The four leaders at the first BRIC summit; Luiz Inácio Lula da Silva (Brazil) – Dmitry Medvedev (Russia) – Hu Jintao (China) – Manmohan Singh (India).
In my last article – “BRICS – The World is Not Looking”, we looked at BRICS, as an entity. This group has been an extension of China’s attempt to align and experiment in economic dominance.
The Cornerstone to advance the BRICS aka New Development Bank (NDB), is through becoming a five-country group to consolidate by agreements that benefit the BRICS.
Economists at Goldman Sachs originally coined the term BRIC (without South Africa) in 2003. South Africa was added to the list on April 13, 2011, creating “BRICS”.
Having a basic understanding of the BRIC and their genesis, the next step is to look into their strategy.
Opening Address to the BRIC Leaders Summit
The first BRIC Summit – Yekaterinburg, Russia – June 16, 2009
PRESIDENT OF RUSSIA DMITRY MEDVEDEV:
Welcome once again to Yekaterinburg. Yekaterinburg is currently the epicenter of world politics living through a hot time in both the literal and figurative sense. It is hot outside, and inside very important summits are taking place.
The Shanghai Cooperation Organization Summit just ended, and it produced results; the discussion was useful and trusting.
And today we have a very important event too: the first full summit of BRIC countries. It is obvious that we now need to meet in this format and not merely communicate via our colleagues, the ministers of foreign affairs and other ministers. Rather, the four state leaders need to meet to discuss the situation in the global economy and critical issues in the international financial system.
Despite the fact that we often meet and communicate within other forums, it is very likely that this kind of coordination would help clarify each other’s positions and help us develop new innovative ways to address international financial problems and reform international financial relations.
Moreover, the countries represented at this round table have a significant weight in the global economy. The two largest countries in terms of population [India and China] are here, and Brazil and Russia are far from small. And ultimately, our success in implementing new economic programs and reforming international financial relations will depend on the extent to which we understand each other’s positions and perhaps develop joint proposals.
I hope that our meeting today will be a starting point for future negotiations and the intensive development of this new forum, BRIC. We certainly have a wide variety of opportunities available to us: in economic, cultural, educational and foreign policies. I hope we will find common ground and adopt new interesting and advanced decisions in our mutual interest and for the benefit of our peoples.
Once again I would like to welcome you, colleagues.
Let us begin our work.”
In 2009 the positioning had already started, the agenda has been laid insofar as basic agreement and apparatus positioned.
While researching for this article, the following essay was valuable in understanding the impact the BRIC group has on various Global economic positioning.
In the Essay by Richard T. Mpoyi – “The Impact of the “BRIC Thesis” and the Rise of Emerging Economies on Global Competitive Advantage: Will There Be a Shift from West to East?“, Mpoyi considered the current economies of under-developed countries compared to those developed countries and stated:
“The thesis advances that by 2032, the combined GDP of BRIC economies would be as large as that of G7. G7 are the seven biggest developed economies (the United States, Japan, Germany, France, the United Kingdom, Italy, and Canada). The thesis also suggests that by 2050, BRIC countries would be wealthier than most of the currently developed countries. The purpose of this research is to study the impact of the growing economic power of developing countries, especially BRIC nations, on the ability of developed countries and their companies to sustain their current competitive edge. In particular, the paper will examine the proposition that competitive advantage is in the process of shifting from West to East.”
*Essay does not include the effects of South Africa’s joining the group changing the acronym to BRICS.
After reading the essay, it became clear the rewards of economical groupings, with their separate agreements, can achieve more for the group then separate entities.
Each member of the BRICS has the economic capacity, which had ensured a foundational structure, having the ability to contribute to the group.
According to the World Economic Forum, 30 Jan 2008, “Five facts you need to understand the New Global Order”.
- China is in the process of surpassing the US economically. By one measure, 35% of world growth from 2017 to 2019 will come from China, 18% from the US, 9% from India, and 8% from Europe. By 2050, the top five largest global economies are most likely to be China, India, the US, Brazil, and Indonesia. Is the west even remotely prepared for this kind of world?
- China is leading the largest urbanization and infrastructure development scheme on earth. Already in its fifth year, the $900 billion “One Belt and One Road” (OBOR) project includes new roads, shipping lanes and building projects stretching to over 65 countries. The idea is to rewire global trade from China throughout Asia, the Middle East, Africa, and Europe. While details are hazy, OBOR is being financed by Chinese state banks, with a modest strategic contribution by a new Chinese-backed Asian Infrastructure Investment Bank in partnership with other institutions.
- China is set to become a global green powerhouse. China signaled its intention to take the lead on climate change reduction after signing the 2015 Paris climate agreement. By 2025, most new cars in China will be fully electric vehicles. China is aggressively cutting coal usage. Already, over 60% of high-speed rail in the world is in China (10 times the length in Japan, for example). China also recently committed to achieving blue skies in all of its major cities within three years. The changes are being felt: Beijing air is 30% cleaner this winter than last winter.
- China is also setting the global pace on a digital economy, including cashless payments. In major cities, up to 90% of all commercial and retail transactions in convenience stores and cafes are occurring through Alipay and Wechat. E-commerce delivery in large Chinese cities through Alibaba is currently the fastest in the world. One company, Alibaba, racked up sales of $25 billion in just one day – dwarfing the returns of so-called Black Friday and Cyber Monday in the US.
- Chinese universities are also vaulting to the top of the international rankings. Two schools – Peking University and Tsinghua University – leapfrogged from well below the top 200 to the top 30 within five years. 40 universities are not far behind and are set to enter the elite in the coming years. While Chinese students are still seeking out educations in top schools in North America and western Europe, soon they won’t have to.
Again China has initiated a course to lead BRICS to the New Global Order.
BRICS – Global Economic Position
|General indicators on the BRICS countries (2018)|
(Bn USD )
average Consumer Prices
|Current Account Balance|
(Percent of GDP)
|Comparison to below|
Interestingly, China and Russia lead the BRICS group in most reported categories.
China is the country to watch over the next few decades as they stay on course to become the Global Economic Power.
From an article by the “World Economic Forum“, “5 facts you need to understand the new global order”, starts with the following:
“At least three competing versions of the future world order crashed together at the World Economic Forum’s gathering in Davos . There was the one plan by President Donald Trump, calling for a full-scale US retreat from the current order. Another came from Chinese leaders who proposed a new global economic system built around Beijing. Meanwhile, Canada’s Justin Trudeau and France’s Emmanuel Macron urged western leaders to double down on the current liberal order.”
During the Davos Economic Forum, China has tipped their hand, slightly, hinting at another portion of their plan for Global Economic expansion by way of purposing the Chinese model of economics will be a template to continue the quest of overtaking the US in strategic and economic domination.
*In the next installment of this story will break down by countries proposed infrastructure projects.