BRICS: Solid rocks for global growth

mechanism, BRICS has showed its strength as a rising economic clout with prominent contribution to world economic growth since the outburst of financial crisis, laying solid foundation for future global economic recovery.
BRICS, grouping Brazil, Russia, India, China and South Africa, represent a gathering of important emerging economies which have been playing an increasingly bigger role in world economy in the past decade.
The aggregate GDP of the BRIC countries (before South Africa joined in late 2010) has close to quadrupled since 2001, from around US$3 trillion to between US$11 and 12 trillion in 2010, said Jim O’Neil, a senior Goldman Sachs economist, in his newly published book “The Growth Map”.
“The world would have to pay attention,” he said.
Since the outburst of the financial crisis, the BRICS, with its power of “withstanding the shakings of the world’s economic foundations” and emerging more robust than ever, has seriously drawn world attention.
A Goldman Sachs report in 2009 showed that, since the start of the 2008 global financial crisis, 45 percent of global growth had come from BRICS.
“If you look at what was taking place over the last four years or so, you have clearly seen a gravitation of growth away from advanced economies in the west, struggling with aftermath of global financial crisis,” Leif Eskesen, chief economist for India and ASEAN of HSBC, told Xinhua.
Eskesen believed though reasons of growth might differ among the BRICS countries and other emerging markets, but structural reforms, economic liberalisation, investment flows and proper fiscal policies contributed a lot during the past “strong years”.
Meanwhile, BRICS countries have made tremendous contribution to the world economy by increasing employment, reducing poverty, pouring in capital, exporting and importing, among others.
According to the IMF, BRICS, the co-operative quintuplet, with roughly over 40 percent of the world’s total population and more than a quarter of the world’s land area, was estimated to have a combined nominal GDP of US$13,6 trillion in 2011, accounting for 19,5 percent of the world’s total.
However, you choose to interpret the data, the importance of these countries in global economic growth was beyond dispute, said O’Neil.
However, BRICS’ ability for sustainable growth seemed to be challenged by recent slowdown in economy, with India’s GDP in last quarter of 2011 expanding by 6,1 percent, the slowest pace in nearly three years, and China setting a lower target growth of 7,5 percent for 2012.
The important thing of looking ahead was “sustaining the rebalancing between imports and exports”, Eskesen told Xinhua.
“That requires continuation of efforts to roll out key structural reforms.”
According to the IMF, for emerging economies, the priority was to ensure a soft landing as domestic growth slowed amid a deteriorating external environment and volatile capital flows.
Countries like China, where inflation pressure was expected to ease, fiscal positions were sound, and external surpluses were large, could increase expenditure, including social spending, while, India, with relatively high inflation and public debt and limited policy space, could warrant a more cautious stance towards policy easing, said IMF in its report on global economic prospects released in February.
For a longer term, experts were still quite optimistic about BRICS as the global growth powerhouse in the future.
“The growth prospect of the BRICS, overall, is still quite strong,” said Eskesen.
Investment guru Mark Mobius said in early March in an investment summit that rising economic demand amid high population growth, fiscal discipline and diversified trade ties will keep emerging markets on a growth track.
If the BRICS achieve their goals, “it will be good for the world, and good for us”, said O’Neil. — China Daily.