Despite their differences, its member-countries face some common challenges, which they could address by developing new, coordinated strategies.
Strange things happen in the world. Imagine the formation of a grouping of countries spread across the globe only for the simple reason that an analyst with an investment bank decides that these countries have some things in common, including potential for growth, and creates an acronym out of their names. Bizarre, but true.
The original categorisation by Jim O’Neill of Goldman Sachs contained only Brazil, Russia, India and China – subsequently South Africa was added to the group. While the origin of the grouping may be odd, and the countries are indeed remarkably diverse, there are some commonalities that are important. In any case, these countries have since shown significant appetite for meeting periodically, working together, finding some synergies and new ways of cooperation. It is interesting to note that trade between BRICS countries soared after they became recognised as a combination although, of course, this is a period when trade between developing and emerging markets in general has grown much faster than aggregate world trade.
At the recent BRICS summit held in New Delhi, the meeting of the Financial Forum definitely signalled some steps forward, such as an agreement to encourage trade denominated in bilateral currencies. The heads of development banks of the five countries also spoke of working together to push for a different global financial architecture and for cooperation in areas such as developing “green” economies.
In fact, there is great potential in these five countries for not just combining to address global issues but, perhaps even more significantly, for learning from one another.