BRIC to finally end its virtual era
BRIC - the organization that unites Brazil, Russia, India and China -
may soon change its name as it prepares to welcome another member - the
South African Republic, the most developed country on the African
continent. The organization has accepted the bid from South Africa’s
President Jacob Zuma; most likely, the answer will be positive.
Russian President Dmitry Medvedev welcomes South African Leader
Jacob Zuma in the Kremlin. Picture by AP |
Russia’s Dmitry Medvedev said during Jacob Zuma’s recent visit to
Moscow that it could be possible to develop relations with South Africa
via BRIC. It goes without saying that other countries intentions to join
the organization seem flattering to Russia, as well as to other BRIC
members.
However, it brings up a logic question: what does South African
Republic need from the virtual organization and what can BRIC members
gain from cooperating with South Africa? The meetings of BRIC leaders
occur on rare occasions. More importantly, those meetings do not decide
anything.
The name of the organization was invented by Jim ONeill, a leading
economist with Goldman Sachs Group Inc., in 2001. The specialist
predicted that by 2050 the volume of BRIC economies would exceed the
economies of the leading countries in the West and Japan (the Group of
Seven).
It is not ruled out that Zuma hopes to obtain commercial preferences
through BRIC membership. As for Russia, it considers South Africa an
important and perspective partner. Russian officials believe that South
Africa’s membership in BRIC would be highly productive.
This virtual organization has been more relevant economically rather
than politically: it represents cooperation between the world’s
dynamically developing economies. South Africa has a fast developing
economy too, although it cannot be compared to the economies of other
BRIC members.
According to World Bank estimates, the GDP of BRIC’s smallest member
- India - quadruples the GDP of South Africa. There are other
restrictions, which do not allow Africa’s most powerful state reach the
level of BRIC members.
Human resources is a serious issue, for example. The population of
South Africa is three times as less as that of the least populated BRIC
member - Russia.
South
Africa leaves BRIC members behind on other indexes, though. For example,
its GDP per capita in 2009 made up $10,300 vs the same index for Brazil
- $10,100, China - $6,600 and India - $3,100. To crown it all, South
Africa comes 39th on the list of the countries comfortable for business
activities, according to Forbes magazine.
Experts of Russia’s Supreme School of Economics believe that one
additional member is not going to change anything in the structure of
BRIC. BRIC gathered for its latest session in April in Brazil. The
leaders only released a number of meaningless statements and signed a
memorandum of cooperation.
The document stipulates joint efforts in the banking sphere regarding
the issues of financial support in the field of high technologies,
innovations and energy saving. The appeals from the BRIC leaders to find
a new alternative to the US dollar as a reserve currency still look good
only on paper.
The next summit of the organization will take place in China. It is
not ruled out that South Africa will be invited for the event too.
However, if a new member appears indeed, one may expect other
countries to follow South Africa’s example. International economists
believe that Mexico and South Korea have very good chances to join the
organization. |