BRICS -The new
kid around the financial block with the hopes of playing a greater part in the
world which is dominated by the western powers.
So what is
BRICS? Simply put it is a bank that lends money to countries for their
development projects. Hence, the name “NEW DEVELOPMENT BANK”. Now, this is what
both IMF and WORLD BANK are supposedly doing, but what role can BRICS play
where those institutions have already been doing “successfully”.
The issue is
that the World Bank does not work like a bank for the entire world; it is just an
Americanized World Bank.
Still not clear?
Let us break it down even more. For this purpose we will dive a little deep...
Significant
positions in the World Bank, major resources and projects are swayed towards
U.S and its allies’ interests. In fact all the presidents of the World Bank
group have always been American. The voting power of the U.S.A in the World
Bank is 16.28% while for India and China it is 3.0% and 4.8% respectively. The
same applies to the IMF also. While the organization’s top priority is poverty
elimination for over 60 years now, only negligible amount of people have come
out of poverty.
The World Bank
proposed to invest $100 billion for development but only $12 billion has been materialized. Projects only get approval if
they are huge and get tech assistance from the west where local people would
not be benefited much.
While BRICS
Enjoy half of world’s population, quarter of land mass, and one fifth of
world’s GDP which is 16.9 Trillion$, almost very close to American economy
which is 17.5 Trillion$...
...BRAZIL, rich
in oil& iron ores, over took U.K to become 6th in GDP in 2012 in
addition to rapidly developing cities and technological advancements.
Shying away from
western partners RUSSIA is equivalent to U.S in terms of technology,
manufacturing and research capabilities which is the experience valued by the
BRICS members.
INDIA, pulling
almost 200 million people from poverty in the last 50 years, has also prospered
many middle class families and 10 out of 30 fastest growing cities are in
India. Being called “Back office of the world” and projecting the image of low
cost technology pioneer, India is highly desired for complex missions.
CHINA, an
upcoming superpower, economic superblock, which is regarded as the
manufacturing hub of the world, lifted a large number of people from poverty,
rapidly developing as a nation and looking for more markets for investment and
for its goods.
SOUTH AFRICA, a
small GDP compared to all other BRICS nations but has a major upcoming market,
serves as economic corridor towards African continent which is rich in core
resources and untapped oil.
HURDLES TO OVERCOME
--Depleting resources may hinder
with the growth of the BRICS nations.
--Corruption percentage is high
in China, India and Russia which needs to addressed.
--Border disputes to be settled.
--Chinese dominance among BRICS
nations may be high.
--Other BRICS nations have to
grow rapidly as China is larger than all other BRICS nations combined.
BRICS will
thrive if and only if cooperation between them stands the test of time and if
it does, the world will see a new world order with multipolar, equally
distributed power blocks.
- Manicharan
manicharanr@gmail.com
