Brics: Achievements and Weaknesses

Since its establishment, the BRICS forum has gradually evolved into a regular platform for cooperation and coordination in various issues concerning the whole world and emerging economies in particular. The BRICS share many common views in issues of development, many challenges on the international political arena and promising prospects. It is noticed that the BRICS have achieved a great deal in various fields, with a focus on economy.²¹² According to the World Economic Outlook issued by the IMF on January 24, 2012, the BRICS countries still took the lead in the world economic growth in 2011. The economic growth rate of China reached 9.2%, India 7.4%, Russia 4.1%, South Africa 3.1% and Brazil 3.0%, much higher than the average growth rate of the developed countries (1.6%).

In terms of international trade, the BRICS countries have constantly strengthened their economic ties with each other. During 2001-2010, an average rate of trade growth among the five countries grew by 15 times, reaching 28%. In 2011, trade volume continued to increase rapidly. Between China and Russia, the trade volume amounted to $79.3 billion, the trade between China and Brazil reached $84.2 billion, that between China and India rose to $73.9 billion, and, finally, the trade volume between China and South Africa made up $45.4 billion.²¹³ Since the trade growth is complementary, volumes for other pairs have also grown rapidly.²¹⁴

The same is true for trade dynamics between BRICS and other areas of the world. For example, the BRICS played a very important role in their trade with the African continent. There has been an intensified strategic interaction between the BRICS and Africa over the past decade. As H.E. Ambassador Bheki Langa of South Africa put it, “in terms of economic linkages, BRIC-Africa trade has increased nearly eightfold between 2000 and 2008, and the BRICS’ share of African trade rose from 4.6% to almost 20% in 2008. Today, China, India and Brazil rank as Africa’s 2nd, 6th and 10th largest trading partners respectively”.²¹⁵ Traditionally, USA and the European Union continue to be significant partners of Low Income Countries (LIC), yet their share of exports fell from 60% in 1980 to less than 45% in 2009. On the contrary, the LIC-BRICS trade partnership has been growing. In 2005–2008, the average total share of the BRICS in LICs’ exports was about 70% higher than the average total share of the BRICS in the world exports. Moreover, over the last decade, all BRICS member-states have established themselves as increasingly influential players across Africa.²¹⁶

In 2010, the sum of overseas merge– and acquisition deals by the BRICS was $402 billion, or 22% of the global aggregate of $2230 billion. China was the third largest direct investor in the world in 2010, investing more than 60 billion overseas.²¹⁷

The BRICS are cooperating in other fields as well. Now they have formed a forum to hold regular meetings to discuss international issues and exchange various ideas. First, they are trying to fight protectionism and speed up liberalization of international trade. Second, the BRICS are endeavoring to promote reform of the international financial order, aiming at, in particular, improvement of the position of developing countries in the international financial system. Third, the BRICS have also pushed up their cooperation against global climate change and in other fields.

There are, of course, certain problems and weaknesses in the relationship between the BRICS. Owing to different political systems and cultural varieties, members of the group acutely need mutual trust and consensus to make common decisions. Till now, their cooperation has been mainly focused on economic issues. Political influence of the BRICS in the world is not as strong as their economic impact. What concerns many acute issues of international politics, the group is still in the stage of “discussion”, “dialogue” or “exchange of ideas”, etc.

Since all the BRICS are regional or global powers, their individual interests are sometimes different. In some specific issues such as the UN Security Council reform, prices of natural resources etc., there is no consensus yet and it is to be reached as soon as possible. Besides, China and India have an unresolved border dispute.

Even in the economic field, there have been many contradictions related to natural resource prices, investment and trade. Take China as an example. It has contradictions, in particular trade frictions, with any other BRICS member. China and Russia do cooperate but they also have disputes over trade in natural resources. The same is true for the relationship between China and Brazil. Between China and India, there are certain tariff obstacles which disturb bilateral investment and trade. The Chinese-South African trade relations are rather unbalanced. China’s dialogue with other three BRICS members (Brazil and South Africa) under the WTO aegis sometimes causes new frictions. In particular, India, Brazil and South Africa filed more trade-related claims against China than with than against any other WTO member. In 1995–2010, India initiated 637 anti-dumping case investigations with 58 countries – 142, or about 22.3%, of them were related to China, no other country received more claims. During the same period, Brazil initiated 216 anti-dumping investigations against 53 countries – again, China had the largest share of it (about 20.4%, or 44 cases). Trade-related problems between China and South Africa exist as well. Among 212 anti-dumping investigations with 43 nations, initiated by Pretoria in 1995-2010, 33 cases, or 15.6%, were against China. Again, no other country received more claims from South Africa.²¹⁸ This is no surprise, as trade disputes between the BRICS are primarily caused by their competition in commerce, similarities of typical export commodities and protectionist policies implemented by the BRICS in the interests of national producers.