President of South Africa Jacob Zuma said earlier this month that trade between his country, Russia, Brazil, India and China (BRICS) had increased 70 percent since 2009, Russian news agency TASS reported, affirming the economic strength of the trade bloc excluded from recent major international free trade negotiations.
The group of countries were first described in the same company by Jim O’Neill, retiring chief economist for Goldman Sachs, when the countries were still considered relatively poor, but were noticeably emergent. Originally composed of Russia, Brazil, India and China – South Africa was added later – the countries initiated regular gatherings to foster cooperation between the nations and fuel their emergence as economic powerhouses.
While the countries haven’t exactly taken hold of the global economy – China is facing a stock market meltdown and Russia remains in the throes of economic turmoil following various sanctions – they have long been considered significant as a group.
“BRICS has long been considered significant as a group.”
Recent growth among the BRICS
The BRICS composes 30 percent of the global GDP and produces a third of the world’s industrial goods and 50 percent of its agricultural products, TASS reported. The South African president went on to explain global investment in the trade bloc. The five countries attracted 20.5 percent of global investment in 2014 compared with 16.9 percent in 2009. Capital investment has also increased since the same year.
“We stand ready to expand our economic cooperation with these partners in key areas such as food production, power generation, the petro-chemical industry, mining, tourism, renewable and nuclear energy, trade, transportation, communications and training,” Zuma said.
The BRICS exclusion from recent trade developments
Though the BRICS has been hit by various economic turmoil in recent years, the countries’ collective eyes remain set on both global investment and trade growth within the group. This is despite the fact that the five countries have been excluded from a number of free trade agreements in the works.
The Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union and the Trans-Pacific Partnership between Mexico, Canada and the U.S. and a number of Asian countries each exclude the BRICS, according to an editorial by Terence O’Brien published by New Zealand publication Stuff. The Trade in Services Agreement (TiSA), being negotiated by 25 members of the World Trade Organization (WTO), including the EU, also does not include the trade bloc.
O’Brien also noted other happenings in global trade that seem to point to the exclusion of the BRICS from the advancement of global trade. For example, the International Monetary Fund’s forthcoming reforms designed to “reflect the increasing international weight of the BRICS” have been delayed. He also explained that impatience among the BRICS is driving members of the trade bloc to take action, for example, China’s creation of the Asian Infrastructure Investment Bank (AIIB).
The BRICS also launched the New Development Bank BRICS (NDB BRICS) “as an alternative to the existing U.S.-dominated World Bank and International Monetary Fund,” according to the organization’s website. The description of the bank goes on to further differentiate the NDB BRICS from the World Bank. Zuma described the recently established bank as a highlight of the seventh BRICS Summit.
Though recent developments have likely hindered the growth that Zuma described, the BRICS are making efforts to further growth among the trade bloc members. Whether this will put the BRICS on par with more established nations, though, remains to be seen.