Unity in bloc's diversity

Updated: 2014-07-14 07:37

By Svetlana P. Glinkina (China Daily)

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The BRICS summit held in Durban, South Africa, in March 2013 marked the first five years of the group. During those five years BRICS members expanded their areas of concurrence in terms of national interests and strengthened the status of the group as a meaningful inter-civilizational macrostructure.

Thanks to its members' common interests and global goals, BRICS has become a political identity and established itself as an international association. And deeper and comprehensive cooperation among BRICS members is boosting the trend toward a multipolar world.

Unity in bloc's diversity

The world economy has been passing through rough times, which has forced the growth rates of BRICS countries to slow down too. The global economy may be moving toward a "post-BRICS" world marked by weaker investor interest in developing economies, but despite that it is too late to disregard BRICS. Attacks on BRICS, attempts to form parallel and competing blocs only go on to prove that the group has become a real factor in world economy and politics.

BRICS represents an alliance of economies that demand deep reforms in the international monetary and financial system (established after World War II), because the existing framework reduces the role of developing countries in the world economy and denies them their rightful say in international economic matters. BRICS countries have set an ambitious goal: to prevent the International Monetary Fund from imposing political and other conditions on developing countries for granting them loans to build infrastructure and/or run businesses.

The past year's efforts to establish a BRICS development bank is likely to bear fruit at the sixth BRICS summit in Fortaleza, Brazil, where the member countries are expected to sign an inter-governmental agreement to set up the bank. The bank is expected to more efficiently allocate global financial resources, and attract funds for long-term projects in developing and emerging market economies. The existing world financial system has a constraining effect on global demand, and the BRICS bank's aim is to overcome this "market failure".

The decision of BRICS countries to create a currency reserve of $100 billion - intended to ensure sustainability of their economies - can be seen as a success of past year's efforts. The reserve will play an important role at a time when leading Western countries' are tapering or ending their quantitative easing. This policy of advanced economies, pursued under slack world economy dynamics, resulted in capital outflow from developing countries, which were forced to depreciate their currencies.

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