BEIJING – As much of the world focuses on Greece’s travails, the BRICS countries – Brazil, Russia, India, China, and South Africa – have been working to advance their own economic agenda, most recently at their seventh annual summit in the Siberian city of Ufa. But, though Russia hosted the meeting, it is China that was viewed as dominating the grouping. Indeed, the BRICS has already proved to be a force multiplier for Chinese diplomacy, and can remain so if China is careful not to push its national interests too hard.
So far, China has played a pivotal role in driving progress toward real cooperation among the BRICS countries. In recent weeks, its members have each pledged $10 billion to their New Development Bank, which should start lending next year; released a common strategy for economic and trade cooperation; and agreed to a $100 billion contingency fund to provide temporary assistance to members facing balance-of-payments pressures.
But the BRICS’ future remains uncertain, owing to strong economic headwinds. Brazil is wracked by corruption scandals and stagnating output. Russia is probably in recession, owing largely to Western sanctions imposed in response to its intervention in Ukraine. India has been suffering from a depreciating currency and soaring public debts. China’s GDP grew by only 7.4% last year, the lowest rate in 24 years. And South Africa’s growth has been weak, not least due to energy shortages.
Given these developments, many Western observers have come to believe that the BRICS are broken. Morgan Stanley’s Ruchir Sharma has emphasized that the winners of the last decade may not continue to win in this one. Even Jim O’Neill, who coined the term “BRIC,” has turned his attention to the “MINT” economies – Mexico, Indonesia, Nigeria, and Turkey – the BRICS’ key emerging-country competitors.