BRICS should have bigger say in world economic order
Monday, 02 January 2012 06:35 GMT
The world economy, short of a robust recovery, is likely to continue to face a sea of challenges and hobble forward in the new year.
As one dose of antidote to the current global economic malaise, BRICS, a bloc of five major emerging economies, should have a bigger say and play a more important role in the world economic mechanism.
A bigger say for BRICS, which groups Brazil, Russia, India, China and South Africa, in the world economic system, particularly in the heavyweight financial blocs such as the World Bank and the International Monetary Fund (IMF), is a proper reflection and confirmation of BRICS' rising economic clout and contribution to world economic growth.
There is no denying that the current world economic order is dominated by Western powers. For example, although China's and India's shares of voting power in the World Bank were increased from 2.77 percent to 4.42 percent and from 2.77 percent to 2.91 percent, respectively, after the Bank's reforms in April 2010, the U.S. share is still 15.85 percent, which effectively gives the country a veto power at the organization.
According to the IMF, BRICS, the cooperative quintuplet, with roughly one third of the world's total population and more than a quarter of the world's land area, was estimated to have a combined nominal GDP of 13.6 trillion U.S. dollars in 2011, accounting for 19.5 percent of the world's total.
Meantime, Reuters' investment outlook summit, held last December, predicted BRICS could become as big as the G7 (the United States, Japan, Germany, France, Britain, Canada and Italy) by 2027.
A Goldman Sachs report in 2009 showed that, since the start of the 2008 global financial crisis, 45 percent of global growth had come from BRIC (before South Africa joined in late 2010), which was first coined as an economic concept in 2001 by Jim O'Neill, a senior Goldman Sachs economist.
BRICS countries have made tremendous contributions to the world economy by increasing employment, cutting poverty, pouring in capital, exporting and importing, among others.
The contributions should be reflected in BRICS' bigger voice in the world economic system.
Meanwhile, a bigger say for BRICS will also help transform the current Western-dominated world economic order into a more reasonable, balanced and equitable one, which will better represent interests of developing economies and is essential for sustained world economic growth.
Developed countries, which are being confronted with dim economic prospects and slow recovery, should cooperate more closely with emerging economies, particularly BRICS, to work out their differences and achieve win-win results.
But it is worth noting that cooperation here does not merely mean persuading dynamic emerging economies to unilaterally shoulder more responsibilities, such as purchasing more European and U.S. sovereign debt bonds.
To tide over the current crises and more effectively boost the world economy, the United States and European countries should scrap protectionist measures, open their arms to investment from BRICS and other developing countries, and export more advanced technologies to them.
Closer coordination and cooperation are urged between BRICS members and developed economies, as well as between developing and developed countries.