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Forming an economic bloc of BRICS, a myth?

四月 16, 2011 By: 栢齊 Category: 新社專欄, 環球視野

The BRICS summit was held in China last week. As in the past summits, people keep talking about the possibility for BRICS countries to form a long-term and stable alliance dedicated to global economic issue and even reform of global economic order.

The summit has contemporary global political economic significance in the sense that it was held at the time when most developed countries are faced with serious problems. The US federal government almost suspended operation due to the recent budget disputes. Japan is still under deep crisis in the wake of the earthquake and nuclear disaster. The EU faces dilemma of whether to offer emergency relief to Portugal and some other members especially after German Merkel’s government lost local elections and thus was forced to turn to conservative stance on EU affairs. Against such background, it raises again the issue of whether BRICS countries can forge a long-term partnership in global affairs. While many people are looking forward to this partnership as opportunity to reform global economic order, its success or otherwise would depend on a number of issues.

First, there are arguments that praise the potential for BRICS economies to complement each other (e.g. Russia’s energy resources, Brazil’s raw materials and agrarian products, China’s and India’s manufactures and services). The inclusion of South Africa in this summit is to certain extent based on the same consideration. However, the economic and technological ties between BRICS members other than China (e.g. Brazil-Russia and Brazil-India) remain weak. So the formation of an economic bloc of BRICS countries with tight trading networks would still not be the case at least in the short run.

The relatively close ties between China and individual BRICS members bring to another issue of the political-ideological diversity between them. Despite grouping under the ‘non-western’ or ‘leading developing countries’ umbrella, BRICS countries share limited similarities in terms of political systems, economic ideologies and strategic concerns that all pose constraints on their further cooperation. A sign of such hindrance is that the Indian Prime Minister left immediately after close of the summit without staying behind with other BRICS leaders to participate in the Boao Forum, which is one of the few international conferences / organizations hosted by China (another famous one is the Shanghai Cooperation Organization). It shows that India is not willing to give credits to China to assume leadership role in global affairs. It reflects difficulties for BRICS members to form a bloc under the leadership of China (as like the US-led G7) unless their political-ideological diversities can be converged.

Given the high degree of economic interdependence nowadays, it is not prudent for BRICS countries to seek regime change. That means they will only be able to resort to reforming existing global political-economic order. In this sense, it may bring out controversies between them (e.g. permanent membership of UN Security Council, difference stance on trade and environmental issues) that prevent them from taking unified stance on reform of global institutions.

As transitional economies, all BRICS countries are faced with pressing need to keep momentum of growth and reform of their economic structure. Failure to do so would bring about not only domestic recession but also global instability.

In sum, the prospect for BRICS requires the countries concerned to seek closer economic and technological ties with each other, be more committed to domestic reform and resolving political rivalries between them, and engage in creation of more permanent confidence-building and cooperation mechanisms. Otherwise, BRICS will remain as a trick of portfolio investment without global political economic significance. The formation of BRICS as an economic bloc shall thus be a myth forever.

BRICS

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