BRICS: Necessity Or Wishful Thinking?

Strategic alliances are a basic tool for defending and fostering an organization’s targets,
strategies and such. Common sense in the business community, it also has become popular in the
political world to defend all kinds of ideas. Acronyms such as UNO (United Nations Organization),
ASEAN (Association of Southeast Asian Nations) and MERCOSUR (Mercado Común del Sur, or Southern
Common Market) are well-known.

In 2003, another acronym started to become prominent: BRIC. The acronym stands for Brazil,
Russia, India and China.

The term “BRIC” was first used in a financial report from Goldman Sachs, which speculated
that the four countries would comprise the global power in 2050 — or, in other words, they would
have more money than most of the current biggest

economic power states. The report stated that China and India would become the powerhouses of
production; and Brazil and

Russia, the major suppliers of the most important raw materials.

The basic idea behind the BRIC group is to challenge traditional financial powers such as the
International Monetary Fund (IMF) and the World Bank. In 2010, another country joined the club and
the acronym added the letter “S” for South Africa, which is well-known for its rich natural
resources. So today, BRICS comprises five nations on four continents, representing nearly 45
percent of the global population and some 25 percent of the global economy. There is no historical
cohesion, but there are competing political and economical systems. Before the BRICS countries can
start to speak with one voice, they must tear down barriers and unify their controversial opinions
about many issues.

Another effort to challenge the traditional financial powers happened recently at the BRICS
summit in New Delhi, India: The BRICS member states agreed to found a development bank. This bank
should finance development projects and infrastructure plans in emerging countries. In their mutual
message, the BRICS members blamed the “rich countries” for the global financial crisis and said
those countries should reform the international institutions to include codetermination with the
emerging countries.

Time will tell whether the BRICS idea will stop being wishful thinking and start to be a
necessity. The next BRICS summit is scheduled to take place in South Africa in 2013.

April/May/June 2012