Crossing borders

     Why is there so much speculation about the BRICS?   There are volumes of economic data available about the emerging markets or developing countries of Brazil, Russia, India, China and South Africa (BRICS).  This five-letter acronym BRICS has emerged as a possible counter-force in international affairs and its influence is enhanced by the global financial crisis of the past decade.  Jim O’Neil, Chairman of Goldman Sachs Asset Management coined the phrase in 2001 to bring greater attention to major fast-growing economies of the world. These five countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.

        The BRICS, while heavily debated is not a diplomatic force because apart from the fact that they are all emerging market economies, they have little in common," said Jayshree Sengupta from New Delhi think-tank the Observer Research Foundation.  "The BRICS do not have many policies in common," added Sengupta. "They could come together for a common powerful future, but the cement in the BRICS is missing."

       Another consideration that binds a trade block is the advantage flowing out of oligopoly. OPEC, the oil cartel, also bound by geography is more about squeezing the optimum value out of a natural resource for which there is no current substitute. However, BRICS countries have neither a contiguous geography nor a common scarce resource to hold them together and tame the world. China is a manufacturing powerhouse whose major league emphasis is export-led growth. 

       Some say the BRICS group makes no sense, especially by including South Africa. Russia and Brazil are big commodity exporters, for instance, while China and India are major importers of such goods. Yet all five countries share a common cause, being united in their determination to convert their new economic power into international political clout – a determination fueled by the West’s continued dominance of the IMF, the World Trade Organization and other global regulatory bodies.