New members broaden BRICS horizons

By Vladimir Legenko and Jiang Yuan Source:Global Times Published: 2017/9/6 18:53:39

Illustration: Peter C.Espina/GT

With the BRICS Xiamen Summit concluding on Tuesday, many expected to see a significant increase in the levels of economic cooperation between the member countries. However, in recent years, the economies of many BRICS member nations have seen growth rates slow, stagnate or even fall into negative territory.

To address this problem, BRICS has looked to attract new partners. Under the BRICS Plus framework, five state leaders from Tajikistan, Thailand, Mexico, Guinea and Egypt were invited to the summit. Through such exchanges, the number of participants in BRICS could increase to several dozen, with partnerships with new countries replacing full membership.

In this respect, the Xiamen Summit raised expectations for the BRICS future development. Russian President Vladimir Putin even published a wish-list of outcomes ahead of the summit, looking to enhance cooperation in the fields of space, healthcare and information security.

The role of the digital economy and the development of cryptocurrencies as a mutual payment mechanism for BRICS members was key to Putin. Establishment of the BRICS energy research platform and joint investment projects in the energy sector were also discussed. Further cooperation within the framework of the Silk Road was developed and a plan to create a 9,000-kilometer-long Europe-western China high-speed transport route unveiled.

The New Development Bank (NDB) in Shanghai has already begun financing BRICS projects relating to sustainable development and infrastructure - a key area for Russia after the European Bank for Reconstruction and Development (EBRD) withdrew funding over the conflicts in the Crimea and Ukraine.

At that time, almost 20 percent of all EBRD investments accounted for projects in Russia.

The NDB will soon be involved in the construction of a highway starting in the Russian Silk Road city of Ufa, which will connect Siberian transport routes with Kazakhstan and Iran. Water management facilities in the Volga River basin will also be modernized. In preparation for the 2018 FIFA World Cup, the NDB will also help finance the Moscow-Kazan high-speed railway, which will greatly reduce travel time between the host cities.

Even as Chinese economic growth slows, President Xi Jinping believes that BRICS is entering a new golden decade, and investment in new industries is key to accelerating growth.

While previous BRICS summits provided a platform to discuss world events in Myanmar, North Korea and Syria, this year's meeting focused on setting nominal goals for BRICS such as achieving 45 percent of the world's population and 25 percent of the world's GDP.

This said, the potential for BRICS to develop into a unified and effective organization remains uncertain.

One threat to the stability of BRICS is the issue of robotization. In 2016, then US president Barack Obama warned that the rise of the mechanized workforce could lead to as many as half the world's jobs being lost - and in China and India this figure may reach 60 or 70 percent.

This could place many residents of India on the edge of extreme poverty, and the resulting loss of jobs could lead to a further economic slowdown in China.

The only way to prevent these future economic scenarios from becoming a reality is to develop true cooperation between BRICS countries, and the proud isolation of developing countries from developed ones will not make the world a better place in the future.

Vladimir Legenko and Jiang Yuan are analysts of post-Soviet and international affairs.

Posted in: VIEWPOINT

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