BRICS -PROMISING PROGRESS

The BRICS (Brazil,Russia,India,China ,South Africa) refers to the group of 5 large countries that are developing and have the maximum potential to tap into their market and make fortunes.

Initially it was BRIC having the world’s fastest economies, but then in December 2010 China invited South Africa to join the group and from then on it was BRICS.

The BRICS nations are not bounded through a common currency or a common supervisory body like the EUROZONE but have been formed of the sole view to develop the individual Nation’s economy, to promote economic harmony among its member states, to become new superpowers of the Economy in near future.

In the wake of the Economic crises in the USA and EUROPE, and the failure of Eurozone to contain the Financial Instability, motivated the BRICS to form a Bank that tries to form a strong backbone and to avert such a crisis for its member nations. It also purported to be an alternative in lending to the West -dominated World Bank and IMF. Although such a statement will seem to be ambitious until the policies yield the expected results, it is common for any Economical Body that is set up new to follow the Standard, existing framework of such organizations.

The BRICS Bank plan was formally signed at the 6^th BRICS Summit held at Fortaleza, On July 15^th by the member states and was named as New Development Bank, with a whooping capital of US$50 Billion, with each country contributing $10Billion, and the capital would be increased over time. The focus of this bank is on lending to infrastructure projects, that will walk the economy forward. The Bank is headquartered at Shanghai.

Still the BRICS Nations have a lot of problems that may hamper their collective effort for a growing economy, some of them are:

1. BRICS nations are still haunted by unsustainable development and too much reliance on a single sector, for example China on Infrastructure
2.  Political uncertainty among the powerful Nation of the Group, namely China and Russia, which do not have an exactly democratically elected Government
3.  The extent of Participation of South Africa is highly uncertain because of it being a bit economically inferior to other countries
4.  The Disputes among members may prevent neutral operation of the Bank, notably Territorial Disputes between India and China

If BRICS nation could address these problems, by policy framework backed by a strong capital,no wonder The New Development Bank will be an alternative to IMF and World Bank

China has very recently proposed a rating agency which is again an alternative to the Western Dominated Agencies like Standard & Poor's and Moody's, will write about it in the next article