BRICS build on infrastructure to aid global economy

By Wang Lei Source:Global Times Published: 2017/9/4 22:38:39

Illustration: Luo Xuan/GT

The BRICS countries are convening in Xiamen, Southeast China's Fujian Province, for their annual summit. A consensus was reached at the beginning of cooperation among the BRICS to emphasize the issue of infrastructure, which is the biggest obstacle to the economic and social development of many emerging market countries.

Over the past decade, BRICS have contributed more than 50 percent of global growth. The economic aggregate of BRICS countries now accounts for 23 percent of the world's total, up from 12 percent 10 years ago. Infrastructure projects made a very big contribution to this achievement. I believe that in the next decade, the BRICS will continue to vigorously promote cooperation in infrastructure construction and actively develop their economies to accelerate global development.

First, there is still strong complementarity among the BRICS in terms of infrastructure construction. All the BRICS still face various degrees of infrastructure shortages, but China's advanced technologies and abundant foreign reserves in certain infrastructure fields can help other members. For example, Russia now needs many new railways, India wants to add rail connections among Mumbai, Delhi and Chennai, and South Africa urgently needs to expand and upgrade its highways.

China can use its well-developed high-speed rail technology and vast experience in road and bridge construction to support the infrastructure construction process in other member countries.

Second, the BRICS all want to use domestic reforms to trigger a new round of economic growth. All the BRICS are developing countries, and all of them have faced the problem of slowing economic growth post-2014. For its part, China is undergoing an economic transformation as it pursues supply-side structural reform. Brazil is conducting privatization.

Previous infrastructure cooperation among the BRICS mainly focused on the construction of highways, railways, airports and terminals. In the future, the BRICS' infrastructure construction cooperation will open up more modern areas such as the expansion of electricity generation and transmission and network cables. At a deeper level, the interconnection of the BRICS countries will be completed.

Third, years of efforts in infrastructure cooperation among the BRICS have created very favorable conditions. In July 2015, the BRICS leaders agreed to establish the BRICS economic strategic partnership, after which their trade and investment volume was boosted significantly. To further deepen mutual cooperation, the BRICS countries have set up a series of cooperation mechanisms, such as the BRICS New Development Bank (NDB), which made seven major loans for seven major projects over the past two years. The establishment of the NDB made project financing more convenient and reflected the cohesiveness of developing countries.

Further progress in infrastructure cooperation will require not only the five countries' policy coordination but also breaking down obstacles, the most important of which is investment facilitation. Due to developmental, cultural and environmental differences, the BRICS are very strict in investment management. For example, India and Russia have always behaved conservatively regarding some sensitive projects on the grounds of national security.

The BRICS have done much to solve these problems. Last month, the BRICS Trade Ministers' meeting was held in Shanghai and made eight outstanding achievements. If most of the plans can be implemented smoothly, trade facilitation among BRICS countries will be achieved to a large extent.

In addition, to dispel the concerns of member countries, the BRICS are still improving their cooperation model. For example, they have changed the stereotypical investment model under which one investment comes from a single country. For example, China, India and Brazil conducted a joint tender in Rio de Janeiro. This is useful in this specific project and will help develop the third-party market in other countries.

Infrastructure construction cooperation among the BRICS will continue in the next decade, and trade exchanges and pragmatic cooperation in various fields will deepen. The BRICS, as a community of emerging markets, will contribute to the development of the world economy, the maintenance of international stability and the promotion of global governance.

The author is an associate professor with the School of Government, and director of the BRICS Cooperation Center, at Beijing Normal University.


blog comments powered by Disqus