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Confounding BRICS skeptics
As pessimists question whether the emerging-economy bloc of BRICS is losing steam, the group's five vastly different countries from four continents are nonetheless taking concrete steps to make themselves shine.
The eye-catching New Development Bank (NDB), expected to be launched late this year or early next year in Shanghai, testifies to their endeavors, influence and vitality, and more importantly -- their coordinated attitude toward reform of global economic governance.
On Tuesday, the NDB's board of governors will hold its first meeting in Moscow to appoint members of the board of directors and the management.
The meeting preludes the July 8-9 summit of leaders of Brazil, Russia, India, China and South Africa, who will gather in the southwestern Russian city of Ufa to chart a course for future collaboration. Another financial tool, the BRICS Contingent Reserve Arrangement, will also be discussed at the summit, the bloc's seventh since 2009.
No doubt the economic outlook for the BRICS countries this year is not as rosy as it was two or three years ago. But is it true, as some critics claim, that the bloc has lost its luster and even slowed down the world economy?
Given their great contribution to global recovery since the 2008 financial crisis, it is unfair, and even a little snobbish, to say so based only on the past half year's performance. The five economies have provided more than half the world's economic growth over the past decade.
In fact, the bloc as a whole -- with its huge economic volume -- remains the powerhouse of today's world growth. The World Bank expects China's economy to expand 7.1 percent and India's 6.4 percent this year. The projected growth rates are even higher for 2016.
The situations in Russia, Brazil and South Africa are not as good as in China and India. Still, there is no need to make a fuss about the slowdown as it only mirrors a gloomy global landscape.
What should not be neglected is that all five nations are carrying out structural reforms to make their growth more balanced and sustainable, especially by tapping the potential of their domestic demand.
Take China as an example. Its economy grew 7.4 percent in 2014, the slowest rate for 24 years, but with focus on higher-quality and innovation-driven growth.
The World Bank found that China's economic activities are constrained by overcapacity in heavy industries, decelerating export growth and regulatory tightening of nontraditional lending. But it found that growth in services remains robust, especially in advanced services such as banking and insurance, and in recent years, consumption has grown slightly faster than investment.
Within the BRICS framework, economic ties have been increasingly strong over the past six years since the bloc's first summit was held.
Trade among BRICS nations in 2013 totaled 350 billion U.S. dollars, 2.5 times the value six years ago. Currently, China is the largest trading partner for Brazil, Russia and South Africa, and the second-largest trading partner for India.
At the end of last year, China's accumulative investment in the other four countries exceeded 55 billion dollars.
Parallel to the summits, a web of relations has been developing among the BRICS countries, and those relations are not only state-to-state or government-to-government; they involve academics and civil society as well.
The five nations, with 42.6 percent of the world's total population and roughly one third of the world's land area, have a combined GDP accounting for about one fifth of the world total. And each one has its own comparative advantages, including human and natural resources.
Imagine the potential if these nations conjoin their development strategies. Fortunately, they are already on the right path to overcome economic hardships, and the Ufa summit will further show the world their endeavors.
As an old Chinese saying goes, genuine gold fears no fire. The BRICS nations, united, are well set to tide over current difficulties in the long run.
And here's a piece of advice for the golden BRICS: Just shrug off the unhelpful remarks of skeptics and pessimists, stay focused on building an influential platform for the interests of emerging economies.
[Source: Xinhua, Ufa, Rus, 06Jul15]
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