China
Source: www.globalpolicyjournal.com

Author: Haibin Niu and Sheng Hong

A puzzle of BRICS is why countries such as India and China work together within the group despite facing consistently difficult bilateral border tensions. This contribution argues that the multilateral logic of BRICS gives its members a chance to cooperate. As emerging powers, BRICS members need to adopt a collective approach to enhance their voices in the global governance system. Existing evidence shows that China and India have managed to separate their bilateral frictions from their collective actions within BRICS. This contribution examines the stakes of China and India's BRICS engagement. Since China and India are the most promising emerging powers in global governance, their partnership will determine the BRICS' depth and the length. Since China has dealt with the pandemic better than other BRICS members, it has become stronger which might increase the disparity of power within BRICS. Following the multilateral logic it may help India to cooperate with a stronger China in the post-COVID-19 era.

Brazil
Source: onlinelibrary.wiley.com

Author: Karin Costa Vazquez

As BRICS advances into its second decade of existence, it transitions from a multilateral alignment to bilateral arrangements among the five members. This 'bi-lateralization' of BRICS expands the 'menu' of the BRICS 'multilateralism à la carte' by allowing members to limit cooperation when their interests diverge and to benefit from collective action through BRICS when their interests converge. This paper argues that, from the standpoint of countries like Brazil, the India–China border dispute and broader competition in the Indo-Pacific demonstrate the 'bi-lateralization' of intra-BRICS relations as they thwart the development of a common narrative on issues like global health, security and trade. Contrarily, the bi-lateralization of BRICS also gives members more flexibility as they manage various domestic and international challenges, which is crucial for the grouping's survival. The experience of the BRICS-led New Development Bank (NDB) illustrates how the five countries can still cooperate as a coalition in pursuit of common objectives such as sustainable development and infrastructure. The lack of robust mechanisms to realize these objectives, however, raises questions about NDB's capacity to help BRICS to cooperate more like a community.

South Africa
Source: onlinelibrary.wiley.com

Author: Malte Brosig

This contribution argues that BRICS is designed to manage inner-group tensions indirectly by endorsing a number of pragmatic operating principles. However, these principles seem to work best at smaller scale conflicts but not larger armed confrontation. The article discusses the internal operating procedures of the BRICS group followed by a discussion of their relative value vis-a-vis inner group conflict. The article finishes by exploring the role of smaller group members such as South Africa and their ability to dissipate political tensions.

India
Source: onlinelibrary.wiley.com

Author: Mihaela Papa and Raj Verma

What is the future of the BRICS (Brazil–Russia–India–China–South Africa) group? BRICS has transformed in record time from a global non-entity into an informal institution that pursues global policy leadership, features extensive policy coordination among five powerful countries, and creates its own organizations. While BRICS momentum seemed unstoppable, a militarized dispute between India and China in 2020 raised questions about the group's future. This contribution concludes the Special Section by arguing that the BRICS group is not broken. Instead, it faces a range of strategic, geopolitical and operational challenges: how it addresses them will define its future trajectory and its impact on global governance. This essay analyses the situation from a conflict resolution perspective while bringing together insights from the five BRICS countries. It conceptualizes new directions for the BRICS group. Two possible internal conflict management scenarios are outlined: circumventing conflict and making institutional adjustments. Yet the real test of the group's resilience is its ability to exert collective leadership and improve global governance. BRICS' response to COVID-19 and to the challenge of sustainable development offers insights into the group's ability to advance community goals.

United Kingdom
Source: moneyweek.com

(John here – just a reminder to sign up for this month's webinar, where I'll be talking to Roland Arnold, manager of the popular BlackRock Smaller Companies investment trust, all about his views on prospects for Britain's smaller companies. Make sure you don't miss it – register here now. It's entirely free and you can catch up later if you can't join on the day, but do be sure to register.)

It is 20 years since Jim, now Lord, O'Neill coined the Bric acronym to cover the four most significant emerging economies: Brazil, Russia, India and China.

There followed a series of research reports from his team at Goldman Sachs projecting how these economies would develop over the following 50 years and their impact on global financial markets.

Twenty years on, how has it worked out?

Great expectations – but how have they panned out?

In 2003, the concept that spawned the "Brics" was extended to include South Africa, and in 2005 to cover "the next 11": Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam.

The purpose was to show the growing importance of the emerging world to the global economy and the implications for inter-governmental institutions and investors. Goldman Sachs made no assumptions about political systems, but did set out "the conditions for growth."

These were "macro-stability," notably low inflation; "institutions", such as the legal system, functioning markets, health and education systems, financial institutions and government bureaucracy; "openness" in trade and foreign direct investment; and "education" to provide skilled workers.

Implicit in all this were the universally-accepted assumptions of continuing globalisation, the liberal economic order, and that the first priority of governments was national prosperity as the prerequisite of all other objectives.

All this was expected to lead down the democratic path.

So looking back now, 20 years on, how has it worked out?

In 2000, the Brics accounted for 8% of world GDP at then-current prices and 23.3% at purchasing power parity (PPP), which adjusts for lower prices in those countries. This was expected to rise to 47% and 52% in 2050, by which time exchange rates would broadly reflect purchasing power.

In other words, Bric currencies would appreciate against the dollar by about 2.5% a year. As a result, in 2020, Brics would account for 22% of the world economy in dollars and 41% at PPP.

Goldman Sachs estimated annual growth in Brazil at 3.6%, with its economy overtaking that of Italy by 2025; France by 2031; and the UK and Germany by 2036. China's growth rate was expected to fall from 8% in 2003 to 5% in 2020 and 3.5% by the mid-2040s, while India's growth rate was expected to slow, but remain above 5%.

Russia would be hampered by a shrinking population but still overtake Italy in 2018, France in 2024, the UK in 2027 and Germany in 2028. By 2050, Russia's GDP per capita would be by far the highest of the Brics.

These forecasts of higher growth than in the OECD reflected three factors: a "catch-up" as the Brics adopted the technologies of developed economies; high rates of investment, driven by the opportunities growth offered and increased capital per worker; and demographics, the consequences of population growth for the workforce and consumption.

About a third of the increase in dollar GDP would be accounted for by currency appreciation.

Not all the forecasts look too bad – but the markets have been disappointing

At first sight, Goldman Sachs looks on course. The Brics now account for 24.3% of global GDP in dollars and 31.4% at PPP, according to IMF data.

The detail, however, is far from that expected.

China's share of world GDP has risen from 3.6% in dollars and 12.6% at PPP in 2000 to 17.7% and 18.8%. This is actually ahead of Goldman Sachs forecasts, particularly in PPP terms, due to 50 years of expected currency appreciation taking place in 20.

India's share has risen from 1.6% in dollars and 5% at PPP to 3.25% and 7.2%. This is broadly in-line with Goldman Sachs expectations, helped by population growth, though GDP per head is less than a fifth of China's or Russia's.

Russia's share has risen from 0.6% in dollars and 2.7% at PPP, to 1.8% and 3.1%, well behind Goldman Sachs expectation. Meanwhile Brazil's share has actually fallen from 2% in dollars and 2.9% at PPP to 1.6% and 2.3%.

Both Brazil and Russia are well short of overtaking Italy, and Russia's GDP per head, at $11,650, has fallen behind China's. There has been some narrowing in the gap between dollar and PPP GDP for India and Russia but little for Brazil, indicating that currencies have not appreciated as Goldman Sachs expected.

This suggests that the Chinese stockmarket should have exceeded expectations – but Brazil and Russia lagged, especially in dollar terms. Goldman Sachs warned in 2005 that "local markets may not be the best vehicle for the local growth story" but the evidence for this at the time came from China which had seen "lacklustre performance."

Still, "within a decade Bric's market capitalisation could be four times bigger than today" while "Brics' share in a benchmarked global portfolio would rise, perhaps to as much as 17%."

In reality, Brics have fallen well short. The MSCI All Countries World index has 2,964 constituents with a combined market value of $68.4trn – this covers 85% of global investable equities, in 23 developed and 27 emerging markets.

Emerging markets account for just 11.6% of the total, and Brics for a little over half of that. China is around 4%, India below 1.5% and Brazil and Russia each a little over 0.5%.

South Korea (in the Goldman Sachs Next 11) is 1.5% of the MSCI index and Taiwan 1.7%. Taiwan was not in the Next 11; perhaps Goldman Sachs assumed that it would be absorbed by China.

Taiwan and South Korea, though, should surely be categorised as developed economies alongside Singapore and Hong Kong.

Is it all bad news?

So true emerging markets have lagged Goldman Sachs' expectations by a long way. Even China, with the economy struggling and its stockmarket down 30% from its January high, may be going off the rails.

The Brazilian and Russian economies are based on commodities, and Goldman Sachs disregarded the "resources curse" – the fact that it is human capital, not wealth of natural resources, that makes a country prosper, and that abundant natural resources actually hinder human capital-based development.

But in 2000-2005, perhaps we all believed that "this time, it will be different."

That the economic development of the Brics has fallen short of the Goldman Sachs projections and their stockmarkets far short, should not reflect on the quality or value of the research. It is only 2021. There is a long way to go before 2050; the Brics and emerging markets in general could get back on track after a disappointing few years.

The team at Goldman Sachs were extremely wary of translating economic forecasts into market projections. The currency appreciation implied by PPP convergence with dollar GDP was not a key part of the research, which contains many insights and much valuable analysis about the factors driving growth.

Finally, Goldman Sachs provided a valuable benchmark against which to judge Brics progress. So far, it has been disappointing and it is easy to assume that the outlook for economic and market development will continue to deteriorate – but it may not.

That will be the subject of part two.

Russia
Source: russiancouncil.ru

A common platform for economic cooperation across the Global South opens the possibility for the world economy to lower global imbalances via creating a "no core – no periphery" mode of cooperation, writes Valdai Club Programme Director Yaroslav Lissovolik.

The divergence in growth performance across the global economy was notably affected by the Covid pandemic, as China weathered the crisis notably better thus far compared to most of the developed economies. The new growth forecasts released by the IMF in July 2021 suggest that developing economies are set to grow by more than 6% in 2021 and by 5.2% in 2022 after a contraction of around 2% in 2020. This compares with a more significant decline in GDP of 4.6% in 2020 for advanced economies, which is to be followed by growth of 5.6% and 4.4% in 2021 and 2022 respectively. China's performance is particularly impressive compared to the global average, with growth of 2.3% in 2020 set to be followed by an economic expansion of 8.1% in 2021. Nonetheless, the key question concerning the growth path of the developing economies remains open: will the developing economies be able to create South-South platforms to open up markets and boost mutual trade and investment?

A common platform for economic cooperation across the Global South opens the possibility for the world economy to lower global imbalances via creating a "no core – no periphery" mode of cooperation. It could serve to close the gaps and "blind spots" in the scale of regional economic integration in the developing world, most notably among the least-developed land-locked economies. More generally, such a platform could serve as a laboratory of "open regionalism" and new pathways in economic integration that are consistent with the UN goals of sustainable development.

Another important benefit from the creation of a common South-South economic platform is greater momentum in South-South trade and investment which in turn should reduce the dependency of the developing countries with respect to official development assistance (ODA) and other channels of financial support from advanced economies. The scope for South-South trade liberalization as well as lower barriers to investment is substantial and indeed a broad South-South platform may serve as a basis for a non-discriminatory level playing field. There would also be greater scope for building regional and trans-regional production chains of suppliers from developing countries.

Across sectors the main pathways to modernization for the developing economies reside in greater economic integration, development of human capital and digitalization. For all leading developing economies there is a tremendous scope for higher growth via reducing cross-regional inequality (the BRICS economies exhibit some of the highest levels of cross-regional inequality in the world), boosting housing development as well as more broadly the services and the consumer sectors of the economy.

Another driver for elevating growth in developing economies could be a re-direction of their investment flows away from the advanced economies towards investing more of their reserves in the Global South. In effect this course of events would lead to a reversal of the decades long Lucas paradox whereby capital flowed from the developing economies towards capital-rich advanced economies. This could prove to be particularly significant given the rising reserves accumulated by developing economies on the back of high commodity prices.

Within the economic framework of the Global South the two key drivers of global growth, namely China and India, could deliver significantly stronger growth impulses for the developing world in case they were to espouse closer economic ties. In some ways the economic cooperation between the two main economic powers of the developing world could be assessed against the backdrop of the trans-Atlantic cooperation between the US and the EU among the advanced economies. This trans-Atlantic partnership has served as the backbone for growth and innovation among the advanced economies in the preceding decades. In this respect, a closer economic partnership between India and China would redound significantly to development areas such as Eurasian connectivity, the growth in the regional partners of the two countries, greater scope for joint innovation projects and the launching of South-South platforms in the financial sector.

For Russia the Global South is a rapidly expanding market that is devoid of the restrictions faced in Western economies. Russia's companies are only waking up to the opportunities that the Global South is offering in terms of market access and demand growth. One of the more advanced companies in this area is Softline, a Russian IT-company that is targeting greater expansion in BRICS+ markets. Earlier this year the company acquired 95% of the Indian IT company Embee Software, while in 2016 it acquired a Brazilian IT-company Compusoftware. Softline has also participated in the business meetings accompanying the BRICS summits, with company representative offices being opened in Brazil and India. More Russian companies as well as corporates from other BRICS countries are likely to accord greater importance to emerging markets in the coming years, which will serve to strengthen the micro-foundations of the integration platforms in the Global South.

Russia
Source: infobrics.org

The winners of the "Revival of the BRICS peoples` hospitality traditions" international online video competition have become known. Let us remind you that there were three nominations: "Traditional wedding ceremonies & celebrations", "Family Celebrations of the BRICS Countries" and "New Year and Other National Holidays". The jury, which consisted of 20 representatives of creative professions, selected nine works.

These included the "Wedding Celebration" clip by Depanchu Gupta from India, an accountant by profession. He talked about what formed the basis of his film. "This is not a staged event for a video shoot. It was my sister's real wedding. The wedding ceremony is still very important to us, which is why it is widely celebrated. There are 29 states in India. Each of them has its own traditions and customs, but at the same time there are common cultural canons that mean a lot to us. I am sure that only by knowing each other's culture, it is possible to achieve complete mutual understanding between peoples." - the competition participant emphasized.

Amateur directors who took part in the event noted that no matter how different people are, they are united by their love for their national culture and their hospitality traditions.

"BRICS: World of Traditions" Regional Public Organisation President Lyudmila Sekacheva added that the project has become a creative socio-cultural communication platform for bringing nations together. "The competition was attended by people of different ages and social statuses: schoolchildren, students, the BRICS countries youth, our compatriots in these countries We've selected around 100 clips that came for the contest. From 50 cities and around 20 Russia's regions, from a number of states and provinces of China, India, Brazil, South Africa." - she said.

The award ceremony will take place in April next year at the BRICS countries Hospitality Festival. As part of the celebration, press conferences with representatives of the five countries, artists' exhibitions and master classes, and entertainers' performances will be held.

In addition, the organisers plan to make a film about the traditions and customs of the members of the association. It will include the clips by the winners. In 2022 the festival will take place in India.