A Gathering of BRICS

[ao333]

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The so-called BRICS group of nations (Brazil, Russia, India, China and South Africa) held their third summit meeting in Hainan, China, last week, promoting themselves as the key “emerging nations” to challenge the longtime dominance of the West.

Coined a few years ago by Goldman Sachs to indicate the four leading emerging markets on the international investment scene, “BRICS” (adding South Africa to the original members) has since acquired a political dimension.

For sure, the original four have made huge advances in the past 20 years. But it is worth remembering that the concept was not invented by Goldman Sachs but by President Sukarno of Indonesia a half century earlier when he coined the term the “New Emerging Forces.”

Indeed, in 1963 Indonesia organized a sports tournament it called the Games of the New Emerging Forces in Jakarta, largely paid for by China. Significantly, Indonesia was not even present in Hainan, despite its progress since 1963.

So are these current “emerging nations” a real gang of five, or just a list of nations with no common agenda other than a shared resentment of the United States — albeit for sometimes contradictory reasons — that want to devise an antidote to Western power? Does this group have any credibility other than as a source of rhetoric and photo opportunities?

The most obvious common denominator of four of the member countries is that they are major suppliers of commodities to the fifth — China.

All now see China as a huge and rapidly growing market for their coal, iron ore, gas, soybeans, etc. All recognize that Chinese demand has been the main driver of the commodity boom of the past seven years, from which they have all benefited enormously.

Being part of the group makes good business sense — it’s a handy forum for pleading for more investment from Beijing and more exports to China, and provides opportunities for Brazil and South Africa in particular to raise their international profiles.

China’s role establishes it as undisputed leader of these “emerging forces.” However, the other members might do well to pause to consider the nature of their relationship with China.

For Russia, there is the poignant realization that a former superpower now plays second fiddle to China in an “emerging” group. For all four nations, it’s a reminder that they mainly sell raw commodities to China while China sells them manufactured goods.

Despite the boom in commodity prices, China enjoys trade surpluses with all of them except Brazil. India in particular is embarrassed that it mainly sells iron ore to China while seeing Chinese goods make huge inroads into India’s markets. India’s trade deficit with China is running at $25 billion annually.

The five BRICS make common cause complaining about the volatility of commodity and currency markets and the perils of too-open capital markets. That seems fair enough, until one notes that Brazil, India and South Africa have all suffered from undervaluation of the Chinese currency, the renminbi, while their own currencies have been appreciating.

The political goal of appearing united prevents these countries from being as outspoken as they need to be on currency issues. A proposal to settle bilateral trade in their own currencies rather than in U.S. dollars is mostly illusory. Likewise, the complaints about speculative activity in commodity markets are at odds with the fact that China has some of the world’s most active and volatile commodity markets.

Inclusion of South Africa in the group is unlikely to add to its influence. This addition has been seen as a diplomatic coup for China, which wanted an African member — just as Sukarno wanted Egypt in his Asia-Africa-Latin America grouping. But South Africa has a fraction of the economic weight of the other members, and its presence in this select company has been duly noted by excluded countries like Indonesia, Turkey, South Korea or Mexico.

The truth is that the interests of “emerging forces” are far more comprehensively represented by their members in the Group of 20 than by the BRICS. This was a summit meeting the emerging world does not need.

http://www.nytimes.com/2011/04/21/op..._r=1&ref=china

[below_freezing]

Not needed by the Wall Street regime, but needed by the ordinary people of the world.

The Wall Street regime shivers in fear every day as they think, when will I have to sell back my gold plated toilets, so the Africans can eat?

[blackops]

i dont know its just me or not but when ever i hear the word BRIC i just forget the problems between india and china i see them fighting for the common goal

[Chinese-Dragon]

i dont know its just me or not but when ever i hear the word BRIC i just forget the problems between india and china i see them fighting for the common goal

In an ideal world, the developing countries would stick together for a common good.

But it is not an ideal world.

[Chinese-Dragon]

The Wall Street regime shivers in fear every day as they think, when will I have to sell back my gold plated toilets, so the Africans can eat?

How much does an average person in the USA comsume per capita, compared to the average African?

How many poor people could eat on a full stomach, if even one American stopped driving their gas-guzzling Humvee for half a year?

It is sad to see such disparity in the world.

[blackops]

How much does an average person in the USA comsume per capita, compared to the average African?

How many poor people could eat on a full stomach, if even one American stopped driving their gas-guzzling Humvee for half a year?

It is sad to see such disparity in the world.

well sooner or later they will have to till what extent will they rob oil from other countries as there economy goes down so will there life style

[Nothing]

A day when USA will lose its ability to print Dollars their consumption will come down drastically.... They have luxury to print dollars and spend it like hell

[anon45]

A day when USA will lose its ability to print Dollars their consumption will come down drastically.... They have luxury to print dollars and spend it like hell

What are you talking about? Americans don't have the ability to print money on the spot. The government does though.

[anon45]

How much does an average person in the USA comsume per capita, compared to the average African?

How many poor people could eat on a full stomach, if even one American stopped driving their gas-guzzling Humvee for half a year?

It is sad to see such disparity in the world.

None, the food would rot on the shelves or in the fields because it isn't profitable to ship to Africa when the costs aren't paid.

You might want to think of a way to ship the food over to Africa for free first. You might also want to look at the myriad other factors: dictators, corruption, skyrocketing cost of oil due to increasing demand in developing countries, tensions in the mid east and plain greed around the world.

You seem to be under the assumption that there isn't the ability to feed everyone in the world, and that is false. There is enough potential production that everyone in the world could be fed, but importing food is expensive due to transportation costs. Basically if Americans cut consumption as you said, that still wouldn't feed a starving person in Africa, because transportation costs would still be high, dictators would still be in power who use food as a political tool, starving folks would still live too far away from the hub cities where the food is unloaded and sold, and lack the transportation to get there (or they'd live in shanty towns and be too poor to buy the food even if it got there).
You think oil prices would go down if Americans cut oil consumption, but they'd keep at the same level (and rising) because the slack in American oil consumption would be made up by increased Chinese and Indian oil consumption due to lower prices. Americans aren't the only ones using oil, and demand wouldn't be dented in the slightest in the medium to long term if Americans cut their oil consumption by half, because the lower consumption in 300 million people would still be outweighed by the increased consumption by 2.793~ billion people.

Also Civilian Humvees are of a Chinese brand, not American.

[Chinese-Dragon]

^^^ You're reading too much into it, I was just using the USA as an example.

This disparity could equally well apply to any "advanced economy", including the place where I live (Hong Kong).

Here you go anon45, a very local example of excessive energy consumption:

This is a laser show that occurs very often in Hong Kong, and has been criticised for consuming too much energy. It was originally intended to be a tourist attraction, and used in a similar way to fireworks.

[Mech]

^^^ You're reading too much into it, I was just using the USA as an example.

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The images seems to suggest a very uncomfortable life...=/ .
I grew up in Dubai. We had occasional fireworks...hong kong looks like overkill. Do they have music along with it?

[Chinese-Dragon]

The images seems to suggest a very uncomfortable life...=/ .
I grew up in Dubai. We had occasional fireworks...hong kong looks like overkill. Do they have music along with it?

Well, we rank near the top of the world in the HDI index, and have the 2nd highest life expectancy on the planet.

So no, I don't think it is uncomfortable at all.

I do disagree with the constant laser shows though. Tourism is great, but it is a big waste of energy.

[anon45]

^^^ You're reading too much into it, I was just using the USA as an example.
This disparity could equally well apply to any "advanced economy",

Understood and good to see some context.

Here you go anon45, a very local example of excessive energy consumption:

This is a laser show that occurs very often in Hong Kong, and has been criticised for consuming too much energy. It was originally intended to be a tourist attraction, and used in a similar way to fireworks.

That looks pretty awesome , I wonder if the increase in tourism and associated revenue covers for the costs of the show though.

[Chinese-Dragon]

Understood and good to see some context.

No problem. Anyway, the USA has about the same consumption per capita as most other advanced economies, so it would be wrong to single them out.

I just thought the "Humvee" example would be easier for most people here to get, since I doubt many people have heard of our laser shows.

That looks pretty awesome , I wonder if the increase in tourism and associated revenue covers for the costs of the show though.

Not sure, but I'm against it on principle.

Maybe once or twice a year is fine, but they literally do it ALL the time (short bursts of like 10 minutes a day). That to me is just a horrendous waste.

I'm not even one of those "eco-friendly" people, but it is still too much for me.

[T-Rex]

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Have you heard of NAM? Well, BRIC is another of those organizations with plenty of publicity but with little effect. Those who dream that countries like Chine and india are going to unite to challenge the US or the west for that matter, are certainly high on dope.