Moscow - Admitting South Africa was the easy part. BRICS, the emerging markets club that owes its existence to a Goldman Sachs Group economist who coined the acronym for Brazil, Russia, India and China, is looking at more expansion. Any ideas on renaming it are welcome.
“This might take a year or two, but this is an absolutely unavoidable process,” Vadim Lukov, Russia’s deputy representative to BRICS, said in an interview on Thursday at the Foreign Ministry in Moscow. “There are a whole number of countries that want to join BRICS, major developing economies.”
Russia in July hosts the sixth annual summit of the organisation, whose importance has increased in Moscow as President Vladimir Putin engages in the biggest confrontation since the Cold War with the US and Europe over the conflict in Ukraine.
BRICS agreed to set up a $50 billion development bank to rival the International Monetary Fund and the World Bank at last year’s summit in Brazil, as well as a $100 billion currency exchange reserve. Russia is promoting the creation of a BRICS rating network to counterbalance what Lukov calls “openly politicised” credit reports by US-based Standard and Poor’s and Moody’s Investors Service, and an energy association to exert some influence on markets. Russia is the world’s biggest oil and gas exporter and China the largest energy consumer.
“We want to show leadership through new forms of cooperation which will be more fairly balanced and reflect today’s multipolar world,” Lukov said.
Global role
Putin last year urged fellow leaders of the world’s largest emerging economies to seek a bigger global role, accusing the US and its allies of abusing their dominance of international institutions.
The BRICS have evolved from the original four-member term coined in 2001 by then-Goldman Sachs economist Jim O’Neill to describe the growing weight of the largest emerging markets in the global economy. In 2011, South Africa joined to give the BRICS a broader geographic representation.
Still, the group has struggled to make its voice heard. The five countries failed to agree on a candidate to head the World Bank in 2012 and the IMF in 2011.
The BRICS nations will coordinate to ensure a mutually acceptable candidate is selected as secretary general of the United Nations to replace South Korea’s Ban Ki-moon next year, Lukov said.
Name game
While a moratorium currently exists on admitting new members, it will be time to think about expansion once the new financial structures and economic partnership projects are up and running, the Russian diplomat said. The development bank also has a spare $50 billion capital to allocate and is willing to admit any country that shares BRICS’ values, Lukov said.
Greece could be one of them. The European Union member’s possible entry into the BRICS bank is up for discussion, though not before the July summit, RIA Novosti reported Thursday, citing Russian Deputy Finance Minister Sergey Storchak.
How would the organisation’s name change with the admission of new members? “I’ll have a think. You have a think too,” Lukov replied.
As for O’Neill, who predicts BRICS will be as big as the Group of Seven major industrialised nations by 2035, he misunderstood the concept he invented, Lukov said.
“What did Goldman Sachs teach us? That these four countries are nothing more than a platform for profitable investments, nothing more than an object,” he said. “Putin looked at the situation from a different perspective, a subject rather than an object: an actor which is actively forming a new architecture for the world, primarily financial and economic.”
Bloomberg