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Is BRICS really in decline?

Leaders of the five BRICS countries of Brazil, Russia, India, China and South Africa are set to meet for a summit on Tuesday and Wednesday in Brazil, while some politicians in the West claim that the five BRICS economies are fragile and fading, and are even in a decline.

Zhang Jun, an official from China's Ministry of Foreign Affairs, said in early July that the Western opinion of a fading BRICS is biased. Observers say such claims are totally unfounded and are a serious misjudgment of world economic development.

Fading BRICS a Weak Argument

Because of their crucial structural adjustment and changes in the international financial situation, especially the U.S. tapering of quantitative easing measures, some BRICS countries have registered slowing economic growth and faced difficulties in their growth.

However, it would be short-sighted for West politicians to draw a conclusion that the BRICS miracle is over.

Huang Wei, a researcher from the Chinese Academy of Social Sciences, told Xinhua that the West has regrettably forgotten the fact that even with slowing growth, the BRICS economies still expand twice as fast as developed countries.

Some Western politicians are inclined to have a prejudiced opinion of developing countries, ignoring the positive side and hyping up the negative aspects, said Huang.

"Westerners with a biased view tend to magnify small problems of developing countries," said Huang, "For instance, they predicted a collapse of the BRICS cooperative mechanism when they saw some minor differences in their first round cooperation."

Cooperation within the framework of BRICS over recent years has proven an improving and cooperative, rather than deteriorating, mechanism among the BRICS countries.

Fan Yongming, director of a BRICS research center at Fudan University in Shanghai, said the Western politicians' unfavorable opinion of the BRICS prospects is but a serious misjudgment of BRICS and world economic development.

"Economic growth is always cyclical," he said, "This is true for developed countries as well as developing countries. The changes in BRICS economic growth has been normal."

"Actually, the BRICS countries have tided over the most difficult waters and are now turning for the better," he said.

Many experts have pointed out that one major reason for slowing BRICS growth is their active structural adjustment in order to achieve sustainable growth. This is fundamentally different from problems in developed economies such as liquidity crisis, debt crisis, and weak demand.

The anaemic growth of developed economies has also posed a significant challenge to exports of BRICS countries, they added.

Bright Future For BRICS

Facts and figures show a bright future for the BRICS countries.

The five developing nations now account for 21 percent of global output and have contributed more than 50 percent of world economic growth in the past decade.

According to Fan, the developing BRICS countries have three major advantages in future development compared with developed economies: population, resources, and the market.

That means sufficient labor supply, abundant natural resources, and vast consumption potential, which have been the main pillars supporting BRICS' fast growth and will remain so in the future, he said.

Fan also stressed that the political stability of BRICS countries will guarantee a speedy recovery to fast growth for BRICS countries.

Besides, after years of development, the BRICS countries have seen improving and cooperative mechanism and also closer cooperation among them. That will become an vital driving force for their economic development, he added.

So far, the BRICS countries have set up a business council, a think tank council, and will establish during the upcoming sixth summit a BRICS development bank and a contingent reserve arrangement.

Setting up a BRICS development bank will help ease financial inadequacy in such fields as infrastructure of the BRICS countries, and will contribute to a greater negotiating capacity of BRICS in the international financial system.

Meanwhile, establishing a contingent reserve arrangement will help emerging economies to cope with market volatility and uncertainty, thus to increase their confidence in steady economic growth in future.

Brazilian Ambassador to China Valdemar Leao said, "The establishment of a BRICS development bank sends a clear message to the world that the five countries are ready and determined to make greater contribution to the sustainable growth of their own countries as well as the rest of the world."

The five BRICS countries account for 29.6 percent of world's territory, and 42.6 percent of world population. The five BRICS economies are highly complementary to one another in terms of trade, with vast potential for cooperation.

Li Jianmin, a researcher on Russia, Eastern Europe and Central Asia with the Chinese Academy of Social Sciences, said the BRICS countries may further promote economic growth if they can stimulate further trade and investment cooperation among themselves.

According to estimates by some international organizations, the economic growth rate of the BRICS countries this year will far outdo the global average and will be twice that of developed economies.

The international community generally believes that the BRICS countries are an important engine for global economic growth in a post-crisis world and are changing the map of wealth creation.

The BRICS countries still have a sound fundamental aspect of their economies, possess sufficient macroeconomic policy tools and enjoy great potential for future growth, observers say.

[Source: Xinhua, Beijing, 13Jul14]

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