Despite economic challenges, BRICS nations still have a significant role to play

PUBLISHED : Monday, 13 July, 2015, 1:21am
UPDATED : Monday, 13 July, 2015, 1:21am

The economies of the five BRICS nations - Brazil, Russia, India, China and South Africa - do not have much in common. They are not as dynamic as when the organisation was formed in 2009, global uncertainties having put paid to spectacular growth rates. But as President Xi Jinping said at the seventh annual gathering in the Russian city of Ufa, through partnership, coordination and cooperation, they can become stronger while pushing the cause of emerging economies and developing countries. The deals that were signed and the declarations made prove they are on the right track.

Established in response to the closed-door policies of Western-dominated international institutions, BRICS nations have every reason for the venture to succeed. At the summit, leaders reiterated backing for their newly launched New Development Bank and US$100 billion BRICS Monetary Fund, rivals to the World Bank and International Monetary Fund. The bank will finance infrastructure projects in member countries from as early as the first quarter of next year, while the fund provides a pool of foreign exchange reserves so they can help one another weather financial crises. In their declaration, they pledged to work closely with the China-led Asian Infrastructure Investment Bank, of which all five are founding members.

BRICS, after all, fits neatly in theory and objectives with China's regional development ambitions. The summit coincided with annual meetings of the Shanghai Cooperation Organisation and Russia's Eurasian Economic Union, the members of which stand to gain by working together on the "One Belt, One Road" initiatives linking Asia with Europe and Africa. In a joint dialogue, Xi urged cooperation for common development, improved livelihoods and safeguarded stability.

But it is not just infrastructure, investment and financing that drives BRICS. It offers an alternative view and stance, supporting global well-being. The summit discussions and declaration were wide-ranging, covering human rights violations in Syria, establishment of the state of Palestine with East Jerusalem as the capital, and rejecting sanctions like those adopted by the West against Russia over Ukraine.

The BRICS economies, like those elsewhere in the world, have encountered challenges and setbacks. But their outlook is brighter than for developed nations and other emerging countries. Together, they can further their own development and in the process, contribute significantly to global growth.