Last April, the BRICS - Brazil, Russia, India, China and South Africa - met in the Chinese resort of Sanya and called for changes in international financial institutions and a move away from the dollar.
Comprising 40% of the world's population and a quarter of the global economy, this new organization appears to represent an important sign of declining American influence. But such appearances are misleading.
When Dominique Strauss-Kahn suddenly resigned this May as director general of the International Monetary Fund, the BRICS were unable to agree on a candidate, and despite the rhetoric of change France will retain the position.
Goldman Sachs coined the term BRIC in 2001 to call attention to profitable opportunities in what the investment firm considered "emerging markets." But what was intended as an economic term has taken on a political life of its own. In June 2009, the foreign ministers of the four countries met for the first time in Yekaterinburg, Russia, to try to transform a catchy acronym into an effective political forum, and this year they added South Africa to the group.
After the recent financial crisis, Goldman Sachs upped the ante and projected that the combined gross domestic product of the BRICS might exceed that of the G-7 countries by 2027, about 10 years earlier than they initially believed. Such simple extrapolations of current economic growth rates often turn out to be mistaken because of unforeseen events. But whatever the merits of this linear economic projection, the term makes little political sense.
While a meeting of the BRICS may be convenient for coordinating short-term diplomatic tactics, the acronym lumps together disparate countries that have deep divisions. It makes little sense to include Russia, a former superpower, with the four developing economies. Of the five members, Russia has the smallest and most literate population and a much higher per-capita income. More importantly, Russia is declining while the others are rising in power resources. Russia today lacks diversified exports, faces severe demographic and health problems, and in President Dmitry Medvedev's own words, greatly needs "modernization."
When one looks closely at the numbers, China's growing economy and vast resources are the heart of the BRICS acronym, though the role of democratic Brazil is a pleasant surprise. When the BRIC acronym was first invented, some argued that a country with a growth rate as skimpy as its bikinis, and chronic political instability, did not belong. Now, as the Economist notes, "in some ways, Brazil outclasses the other BRICs. Unlike China, it is a democracy. Unlike India, it has no insurgents, no ethnic and religious conflicts nor hostile neighbors. Unlike Russia, it exports more than oil and arms and treats foreign investors with respect." With good growth and a series of democratic elections, the key now will be whether Brazil can continue to keep inflation under control.
