BRICS and Mortar

President Xi Jinping gives a joint interview to media from BRICS countries ahead of his first state visit to four countries. Besides his trips to Russia, Tanzania, South Africa and the Republic of Congo, Xi is also scheduled to attend the fifth leaders' meeting of BRICS. Lan Hongguang / Xinhua

Four years after the bloc was born, experts talk about what it needs to do to grow

If the global financial crisis had not broken out in 2008, the nifty acronym BRIC, and everything it stands for, might still be lying dormant in a Goldman Sachs report somewhere, waiting for a chance to see the light of day.

And were it not for the relatively steady economic growth in the BRICS nations - Brazil, Russia, India, China and South Africa - people worldwide might still be agonizing over the slow recovery of the world's most advanced economies.

Eight years after Jim O'Neill, chairman of Goldman Sachs Asset Management, coined the term BRIC to refer to the emerging-market nations of Brazil, Russia, India and China, the economic bloc eventually came into reality in 2009.

A lot has happened since then, and China's newly elected President Xi Jinping is due to attend the fifth BRICS summit in Durban over two days from March 26, where he is expected to put ideas on the table for the bloc's development. An economic development bank, a business council and a joint think tank are among the possibilities.

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When the bloc was set up four years ago, the timing, economists said, indicated that the global economy was becoming multi-polar, with emerging economies starting to become drivers.

"It is clear that a clear shift in economic momentum and influence away from Western exclusivity, toward a wider arc of nations including the East (and increasingly the South) has continued since the collapse of Lehman Brothers triggered a global recession," says Jeremy Stevens, a research analyst in Beijing with Standard Bank of South Africa.

Martyn Davies, chief executive of Frontier Advisory, a strategy and research company in Johannesburg, says this is the post-crisis new economic world order, a reality that the BRICS represents.

"What began as a loose grouping of emerging and populous economies is rapidly morphing into a more coherent power grouping that reflects the shifting balance of power in the global economy, away from the traditional world to the new."

Rather than causing this shift, the financial crisis in the Western economies has merely accelerated it, Davies says.

"The emerging world's ascent has not abated in recent years."

Last year, the GDP of emerging markets rose 7.4 percent to $29.1 trillion (22.56 trillion euros), compared with the G7's combined GDP of $33 trillion, Standard Bank says. Five years ago, the G7's GDP was about double that of the emerging markets.

The International Monetary Fund has forecast that emerging-market and developing economies will grow 5.5 percent this year, compared with 1.2 percent for advanced economies, and Stevens says emerging markets are more important than ever before.

"The gap in trend growth between emerging markets and rich countries has widened. In fact, while G7 total output in 2011 was roughly the same as in 2007, the 10 largest emerging markets have seen output nearly double."

BRICS has become the global ranking standard for the first tier of emerging markets. Four BRICS nations were in the top 11 of national GDP rankings last year, and South Africa was not that far outside the list. GDP in China, the world's second largest economy, was worth $8.3 trillion, 7.8 percent higher than in 2011; Brazil's GDP was worth $2.4 trillion; India's and Russia's about $1.9 trillion each; and South Africa's $391 billion.

Zhang Huanbo, a researcher with the China Center for International Economic Exchanges, says that with the sluggishness of developed economies, the BRICS countries will continue to be a powerful force in driving the world economy.

"In the past three years, economic growth among BRICS nations accounted for nearly half of the world's total growth. Although it is possible that the BRICS nations may not keep up that pace in coming years, it will still be much faster than that of developed ones."