Like Brazil, India experienced a spurt of output growth after liberalizing its economy in the 1990s and had, until a few years ago, a GDP growth approaching Chinese-style rates. However, this year, output is expected to rise by a relatively sluggish 5.9 percent. Unless it improves its infrastructure and literacy rate — particularly for women — India is unlikely to catch up with China.
So, should we take today’s BRICS more seriously than the BRICs of three years ago?
Tellingly, the meeting in Durban failed to produce any details of the structure of the proposed new development bank, suggesting that little progress had been made in the year since the BRICS’ last meeting in New Delhi, India, where the plan was announced. Despite a commitment to launch “formal negotiations” to establish the bank, disagreements about the size and shares of the bank’s capital have not been resolved.
That lack of unity is symptomatic of the BRICS members’ underlying incompatibilities. In political terms, China, India and Russia are vying with each other for power in Asia. In economic terms, Brazil, India and South Africa are concerned about the effects of China’s undervalued currency on their economies.
Three years ago, I wrote: “BRIC is not likely to become a serious political organization of like-minded states.”
The BRICS’ most recent meeting has given me no reason to revise that assessment.
Joseph Nye is a political science professor at Harvard University.
Copyright: Project Syndicate