BRICs and the Eurodebt Crisis The BRICs economies have become increasingly important to the global economy,

world trade and finance in recent years, especially since the global financial and economic crisis of 2008. The BRICs economies are also affected by the ongoing European sovereign debt crisis; it is hurting their economies cutting their economic growth rates, leading to a deacceleration of their economies and will lead to a rise in unemployment eventually. In the case of Brazil the economic growth rate of the Brazilian economy for 2011 it is estimated will be halved to 3.5% compared to 2010. This is a major reason why Brazils President Dilma and former President Lula have called on Europes political leaders to take unified and decisive action to resolve the current Euro debt crisis, and the threat of a Greek default. It can push the global economy into a severe crisis, and world recession. Even China with its strong high growth economy and large foreign exchange reserves can be badly hurt, as the European Union is Chinas largest export market. This is a contributing factor in the BRICs countries offering to help their European

economic and trade partners. China has promised to shore up the Euro by buying up government debt of countries like Spain, and Italy. The BRICs countries contain more than half of the worlds population, and an increasing proportion of global trade and Gross Domestic Product. They cannot afford to let the European economies sink. China is now the worlds second largest economy and expected in the future to become the largest global economy, it is the worlds largest manufacturer and exporter, and it has the worlds largest foreign currency reserves. It has also the worlds largest population. However, there has been recent research to show that China is losing its competitiveness as the worlds global manufacturing workshop due to the effects of high inflation, and declining labour productivity and the USAs productivity is increasing. It is forecast that three manufacturing million jobs lost by America to China could eventually return to the USA, Various solutions have been put forward to solve the Euro economic and financial crisis. One radical plan is to divide the current Euro zone and to create a wealthy, financially stable, with strong economies and stable public finances Northern Euro, and a Southern Euro zone of the

southern European economies with weaker economies, large budget deficits, and economies based more on tourism and services. This split would mean that the Southern Euro economies could have a softer common currency, which would be cheaper, thus exports could be expanded more easily and unemployment greatly reduced. However, this simplistic solution overlooks that trillions of Euros in contracts for trade, and investment are in Euros, this would have a catastrophic effect upon European banks and even northern Euro zone states. To unscramble the Euro egg would prove extremely difficult and costly for both strong and weak Euro zone economies alike. Former UK Conservative Prime Minister John Major recently suggested in a BBC TV interview that Greece might default, and that the Eurozone banks need to provide funding for European banks to increase their capitalization so they can absorb losses from any Greek default. Shortly French president Sarkozy and the German Chancellor Angela Merkel intend to unveil a plan to sort out the Euro debt crisis, which would require increased capitalization from the central European Financial Stability Fund, these European banks are mainly German and French, which have the heaviest exposure to Greek public debt. Even

Britains Euro-sceptic Minister of Finance George Osborne has spoken out in favour of closer economic coordination and fiscal union for Eurozone economies to make the monetary union work. Germanys Chancellor Angela Merkel, despite her serious concern over the huge funding involved in the bailouts of the indebted weaker Euro economies, she has strongly defended the survival of the Euro, and suggested that the end of the Euro would lead to the collapse of the European Union and its allied institutions. This and would spell the end of European regional economic and political cooperation and integration as we know it. President Obama recently said publicly that the European Union needs to gets its act together, and quickly solve the European debt and economic crisis, which he believes could undermine 2 the American economy and its recovery, there is the real worry of financial contagion. Europe is too slowly getting its economic and financial act together, the credit agency downgraded the Italy and Spains debt, and a credit agency in Britain downgraded the credit rating of four leading British banks, such as Lloyds and Nationwide, and strangely the Finance Minister George Osborne supported this, an apparent own goal for Britains financial system by Mr.

Osborne. In America, there have been peaceful protests of thousands of people in Wall Street against the big Wall Street banks and financial system, and the high level of unemployment in America, and the large social and economic inequality. President Obama expressed sympathy with the frustration felt by the protesters and many other Americans about the financial and economic system. These protests have now spread to other big American cities such as Washington, and Los Angeles. The Eurozone governments should learn from the experience of BRICs countries, who in the past suffered economic meltdowns and banking crises, yet overcame these difficulties, and are now much stronger globally economically and politically. However, BRICs economies like China and Brazil will be seriously affected by the expected global recession and economic downturn in 2012, which can lead to a big fall in agricultural and commodities export prices, and the end of that boom could hit the Brazilian economy. Brazil is experiencing a deacceleration of its economy as a result of the global financial crisis, at the same time inflation is at a six year high of 7%, and the countrys economic growth rate of GDP has been halved to

3.5%. There is a real danger of economic recession and job losses affecting BRICs economies like Brazil, Russia with its natural resources based economy, China, and India as well. The head of the IMF Cristine Lagarde, the former French Finance Minister met her old boss in Paris on 8 th of October to discuss the Euro financial crisis. Later she will have a meeting with him and the German Chancellor Angela Merkel to debate further what economic measures the Eurozone leaders need to take to bring this serious Euro debt financial and economic crisis to a close, and to prevent it pushing the world economy into a serious recession. The European Central Bank (ECB) has recently said it would provide unlimited loans to prevent a regional Eurozone credit crunch, where banks would not lend to each other, which would have a dire effect on the Euro land economy. The Bank of England agreed to pump 75 billion pounds into the economy through quantitative easing again, and decided not to increase interest rates, which remain at a low 0.5%. However, the British Prime Minister has refused to provide help for the British economy by reducing the pace of deficit reduction, both he and the Minister of

Finance Gordon Osborne have said that there is no gain without pain; this is despite the IMF warning that European governments should go easy on deficit reduction and austerity. The IMF also surges Eurozone governments to recapitalise their banks to avoid a banking and financial crisis, which could follow a Greek default. The IMF said that Europes stronger economies should avoid imposing budget cuts at the expense of growth. They also said that Europes big economies such as the United Kingdom, France, and Germany should consider delaying cuts because they can borrow money at historically low interest rates. They also said that an economic recession for 2012 could happen. The BRICs countries such as China and Brazil have offered to help the Euroland countries, but so far, no concrete practical aid has materialized apart from exhortations. The President of Chinas huge state-backed Sovereign Wealth Fund on a visit to Brazil denied that China would bail out the Eurozone economies with financial aid, and said that his Fund instead wished to step up investment and purchase of companies in growing emerging markets like Brazil. President Obama called for the US Senate to pass the urgently needed Jobs Plan, which can

create many US jobs, and he said that the Senate must pass this bill, as the fragile US economy needs it to head off an economic recession. The US economy in September 2011 unexpectedly3 created 103,000 new jobs, which was a welcome surprise, but not sufficient to dent the unemployment figures which remain at 9.1%. Some economists put the real unemployment rate at 16% when account is taken of those who have dropped out of the workforce, or are underemployed. Bernie Sanders the sole socialist in the US Congress, and an independent US Senator for Vermont suggested that this figure does not take into account the millions who have dropped out of the labour force demoralized from looking for non-existent jobs. He criticised the Obama Administration for spending multi-billions on bailing out Wall Street banks, but failing to provide loans for small businesses to hire people. The big American corporations are holding US$ 2 trillion in cash, which should be invested instead in capital plant and machinery, and in job hiring to reduce the jobless rate. American businesses should be less risk averse, and start hiring people, this is the position of the President of Starbucks Howard Schultz who plans to open hundreds of new stores in the USA and to create 3,500 net new jobs this year, and he

has also started a campaign Create Jobs for USA, and provided US$ 5 million seed money. Europes economic and financial crisis continues with no immediate end in sight. The governments of France, Germany, and Belgium have nationalized the troubled Dexia Bank; the rescue package has pushed the Belgium public debt to a dangerous level 97% of its Gross Domestic product, which could cause the credit rating agencies to downgrade the Belgium government debt. This bank has exposure to a huge global debt of US$700 billion ($1.2 trillion), which if this bank was allowed to collapse it would set off a full blown European banking and financial crisis, which could have dire consequences for the weak fragile American economy, and spread outward and lead to a global economic crisis and slowdown. BRICs economies would also be badly hit. The current European economic crisis has led to heavy financial asset losses for BRICs economies. The main problem facing the Eurozone is that there are 17 separate national governments and fiscal authorities, while what is need is a common fiscal authority to sort out the Euro countries public finances, to prevent heavy budget overspending and big budget deficits and huge public

debts. The USA, Brazil has a common monetary union and authority, and that the Euro area needs a common central fiscal authority, which avoids the current banking and financial problems faced by the Euro states. One of the Euro zones smallest and poorest members Slovakias Parliament recently voted against the plan to expand the powers of the European Financial Stability Facility, which also involves expanding the size of the Eurozone bailout fund to 440 billion Euros (US$600 billion, 383 billion pounds). The Slovak Parliament has now finally approved the plan eventually, after an agreement to call soon for a general election, but small states hold the bigger economies for ransom, and can put the spanner in the works for a while. This could in the future can be avoided if a supranational fiscal authority, or body, is created for the whole Eurozone area, which would complement the existing common single currency and monetary union. There are those in Europe argue that the lesson to be learned from the Euro debt crisis is the need for further European integration. One lesson that can be learned from the current global economic and financial crisis is that it affects everyone, both BRICs economies and developed G8 economies, and including the poor

low income developing economies. There is a need to work out a viable solution together to prevent the world sliding into another world recession, as we are all in this together, which will be affected by a global economic slowdown and recession. In 2012 it will be five years since the global credit crunch crisis developed into the worst world economic and financial crisis since the Great Depression of the 1930s, and it has taken to long for the worlds leaders and central bankers to come up with an economic recovery plan. We should remember that World War 2 lasted only six years. The Eurozone states need to have a common supranational fiscal body like Brazil, UK, Australia, and the USA if the Eurozone is to work properly and avoid future sovereign debt, financial and economic crises. German Chancellor Angela Merkel said recently that there was no big bang solution to the Euro debt economic and financial crisis. However, the EUs slowness in responding to the Euro debt crisis of Greece and other peripheral economies has made the situation was far worse than it should have been. 4 Europes financial crisis has adversely hurt a strong BRICs economy like Brazil, which has had to slash its growth prospects for 2011 to only 3.5%. Europe is Chinas biggest export market

and the Chinese economy can be damaged as exports are halted. Brazil has a well-regulated banking and financial system, state-owned and controlled banks like the Bank of Brazil and Caixa Economica, and which are well capitalised. Brazils President Dilma Rousseff during her recent visit to Europe had talks with the leading European Union leaders and said that fiscal policies involving cuts in public expenditures can make the economic situation worse by leading to more unemployment, and a lack of economic growth. A rise in European share prices was reversed after the pessimistic German Finance Minister cautioned that a Eurozone debt crisis plan might not be ready at the end of this week. This contradicts the G20 Finance Ministers meeting in Paris on Saturday 15 th of October who stated that the next EU Summit would deal with the challenges through a comprehensive plan when they meet on the 23 rd of October. The German Finance minister Wolfgang Schoeuble warned the Brussels European Summit was not expected to provide a definitive solution to the crisis, while the financial markets want a

definite result. The G20 leaders meet again on the 3 rd and 4 th of November. Last Saturday they said that the IMF needed more finance and firepower, but later they said that the IMF had enough funds to deal with the European financial crisis. The European Union leaders and the USA were against expanding the funds of the IMF, perhaps fears of giving too much economic and financial power to the rising emerging economies. Two respected centre left statesmen former President Lula de Silva of Brazil, and the ex-British Labour Prime Minister Gordon Brown met in Madrid recently to discuss how to solve the European and global economic crisis. One must hope with their considerable experience and influence that they help to provide a viable solution to the crisis. Brazils President Dilma Rousseff at the IBSA (India, Brazil, and South Africa) Forum of the largest democracies on their respective continents, agreed to a progressive common position and consensus on the European economic crisis, which would mean that any solution would protect the economic and

social interests of Europes poor low income groups, and prevent the crisis from spreading to emerging economies. The writer believes that Greece cannot possibly repay its huge public debt, and that the richer Euro economies must fund a 60% write-off of the Greek debt, combined with billions in extra funds to recapitalize European banks. Otherwise, a Greek default would lead to the collapse of the Euro, and seriously damage the Eurozone economies and the European Union itself greatly. The influential Governor of the Bank of England Mervyn King has suggested that China should import more in order to help solve global financial problems; this is a very good idea. Chinas huge export surpluses and financial reserves create a serious imbalance in the global economy affecting both rich developed economies, and emerging economies. Brics currencies:BRICS agree to local currency credits to ease dollar dependency The BRICS - Brazil, Russia, India, China and South Africa - have agreed to provide credit to each other in local currencies. Officials say the deal will facilitate economic growth in times of crisis. The currency swap deal is aimed at promoting trade and investment in local currencies as well as to cut transaction costs. Its also seen as a step to replace the dollar as a reserve currency in trade between BRICS. The idea is in line with many interests and economic exigencies in the world economy, Yaroslav Lissovolik, the chief economist at Deutsche

Bank told RT. The euro and dollar are no longer seen as unquestionable monopolies in the role of reserve currencies. Clearly the world needs more reserve currencies. The deal would also increase the BRICS influence on the international arena and will make their cooperation less sensitive to sanctions from the West, experts say. "The BRICS countries are in the first rank to do the job that international financial system now needs. What the BRICS said was a very welcomed wake up call," John Kirton, the Co-Director of the BRICS Reasearch Group told RT. Russia and China have been trading in the rouble and yuan for several years, now Russia plans to expand local currency settlement with India. With China it took us three years to (evolve) from initial conversations to trading in local currencies, Vladimir Dmitriev, the chairman of Russia s VEB told reporters. I think we will meet similar terms with India. Meanwhile the swap requires a lot of technical work by each country such as the synchronization of national banking legislation, according to Mr. Dmitriev. The BRICS countries are also going to announce plans on a joint development bank which is considered a possible rival to the World Bank and the IMF. If established, it would function as a lending agency and would provide finance for joint BRICS projects. "They made it very clear it would be built to benefit not only BRICS countries themselves, but developing countries more broadly," said KIrton. "But the big message was to give the World Bank more resources, only then would they see how the BRICS bank would fit in the supplement what theyve already got." The cracks in the brics As it prepares to hold its latest annual summit in New Delhi on March 2829, the BRICS grouping Brazil, Russia, India, China, and South Africa remains a concept in search of a common identity and institutionalized cooperation. That is hardly surprising, given that these countries have very different political systems, economies, and national goals, and are located in very different parts of the world. Yet the five emerging

economies pride themselves on forming the first important non-Western global initiative. The lack of common ground among the BRICS has prompted cynics to call the grouping an acronym with no substance. To its protagonists, however, it is a product of todays ongoing global power shifts, and has the potential to evolve into a major instrument in shaping the architecture of global governance the midwife of a new international order. After all, the BRICS economies are likely to be the most important source of future global growth. They represent more than a quarter of the Earths landmass, over 41% of its population, almost 25% of world GDP, and nearly half of all foreign-exchange and gold reserves. The BRICS, in fact, might also be dubbed the R-5, after its members currencies the real, ruble, rupee, renminbi, and rand. At the New Delhi summit, the BRICS leaders will discuss the creation of joint institutions, particularly a common development bank that can help to mobilize savings between the countries. Currently, the BRICS countries constitute a loose, informal bloc. If the groups leaders fail to make progress on establishing an institutional structure, they will lend credence to the contention that it is merely a talking shop for countries so diverse that their shared interests, to the extent that there are any, cannot be translated into a common plan of action. It was just last year that BRIC (Brazil, Russia, India, and China) became BRICS with the addition of South Africa. The BRIC concept, conceived in 2001 by Jim ONeill of Goldman Sachs, was embraced by the four original countries only in 2008, when their foreign ministers met on the sidelines of a Russia-India-China (RIC) trilateral meeting. The addition of Brazil paved the way for the first BRIC summit in 2009, which, interestingly, piggybacked on the Shanghai Cooperation Organization (SCO) meeting in Yekaterinburg, Russia, that year. That association helped the SCO still largely a Sino-Russian enterprise to receive more publicity, but it left the BRIC countries with little space to start formulating a unified action plan. The subsequent enlargement to include South Africa has made the BRICS a more global grouping, which threatens to render irrelevant yet another initiative, the IBSA (India, Brazil, and South Africa). For Brazil, Russia, India, and South Africa, the BRICS grouping serves as a forum to underscore their rising economic clout and showcase their

emergence as global players. But, for China, which needs no recognition as a rising world power, the BRICS offers tangible not just symbolic benefits. As a result, China indeed has cast a lengthening shadow over the group, openly seeking, for example, to control the proposed common development bank something that India and Russia, in particular, are loath to accept. At a time when China is under pressure for manipulating the value of the renminbi to maintain export competitiveness, the BRICS framework offers it a platform to expand its currencys international role. As part of its quest for a global currency that could rival the dollar or the euro, a cash-rich China plans to extend renminbi loans to the other BRICS members. Lending and trading in renminbi is likely to boost Chinas international standing and clout further. But its undervalued currency and hidden export subsidies have been systematically undermining manufacturing in other BRICS countries, especially India and Brazil. Proponents of the BRICS concept nonetheless remain hopeful that the group can serve as a catalyst for global institutional reform. With existing international arrangements remaining virtually static since the midtwentieth century (even as non-Western economic powers and nontraditional challenges have emerged), the world needs more than the halfhearted and desultory steps taken thus far. The formation of the G20, for example, was an improvisation designed to defer genuine financial reform. In fact, the modest measures implemented in response to the changing distribution of global power have been limited to the economic realm, with the hard core of international relations peace and security remaining the exclusive preserve of a handful of countries. China is not on the same page as the other BRICS countries when it comes to global institutional reform. It is a revisionist power concerning the global financial architecture, seeking an overhaul of the Bretton Woods system. But it is a status quo power with respect to the United Nations system, and steadfastly opposes enlargement of the Security Councils permanent membership. It wishes to remain Asias sole country with a permanent seat a stance that places it at odds with India.

If the BRICS countries are to jell as a pressure group in international relations, they must agree on what they believe to be attainable political and economic objectives. For example, they are generally united in their frustration with but not in their proposed response to the dollars status as the worlds reserve currency. Indeed, the most important bilateral relationship each BRICS country has is with the United States. The BRICS concept represents, above all, its members desire to make the global order more plural. But it is uncertain whether the groups members will ever evolve into a coherent grouping with defined goals and institutional mechanisms. In the coming days, we might find out whether the BRICS will ever be more than a catchy acronym with an annual boondoggle attached 2013 BRICS summit From Wikipedia, the free encyclopedia 2013 BRICS summit Host country Date South Africa 2013

The 2013 BRICS summit will be the fifth annual BRICS summit, an international relations conference attended by the head of states or heads of government of the five member states Brazil, Russia, India, China andSouth Africa. The summit will be held in South Africa in 2013.[1] [edit]Background A declaration at the end of 2012 BRICS summit read that: "Brazil, Russia, India and China thank South Africa for the proposal to host the 5th summit in 2013. They intend to provide multifaceted support for it.

Brics relationship with the global economy

Economic transformation is the result of a combination of structural and politically based factors. Russia and China sunk in the destructive chaos of their socialist economies through the charismatic force of their original leaders. Despite being efficient when it came to party organization, these leaders Lenin and Mao were unable to grasp the way in which a modern market economy works. In Russias case, the transition to capitalism has remained erratic, whilst China has seen a combination of political authoritarianism and firm guidance towards a market economy. China is unique in world history in terms of its sustained growth, with structural transformations that have an enormous social impact. In the case of Brazil and India, transformations have been due less to a directed return to the market or revolutions from above than to the deep forces of their semicapitalist regimes, whose creative energy was released by economic opening and trade liberalization. Brazils central problem was to break with self-feeding inflation and the pernicious effects of exchange rate pressures. This process was conducted in full, despite the financial turbulence that threatened an adjustment between the second half of the 1990s and the beginning of the 2000s. India, meanwhile, had to lift itself from a Mesozoic state of

planned economy and over-zealous protectionism. Although it faced some delays, this process was facilitated by a high-quality economic Diaspora in the main developed economies a phenomenon that also took place in Chinese history, but with different characteristics. Strictly speaking, China seems to have reproduced at a higher adaptation pace and with the huge ambition of rapidly recovering from the lost decades of crippling socialism the Japanese experience of the Meiji Revolution. It has sent its offspring to learn from the scientific and technological leaders of advanced capitalism. Above all, China has focused on the Japanese post WWII miracle, in which the country copied and adapted Western knowhow with extreme care and quality, in order to make the same products with its own designs and brands. China is the only emerging nation among all the Brics that seems destined to 5 convert itself into a dominant economy, as well as a technological and military power. However, the country is still very far from offering its citizens many of whom are still subjects of an authoritarian regime the level of individual well-being enjoyed by the populations in advanced capitalist countries. Russia has lost territories with important natural and human resources and therefore

does not seem close to recovering the political and strategic relevance enjoyed during the height of its geopolitical expansion at the end of the 1970s. Despite owning a formidable nuclear arsenal and the capacity for some military projection, the country is in no condition to challenge the two global economic giants of the mid-21 st century. Russias resources are finite and its demography is declining, albeit having a high quality human force. India, for its part, is apt to master, with competence, the electronic services it already offers with expertise. It will, however, have to absorb into the market economy hundreds of millions of rural workers stagnating in an ancestral economy. Brazil has almost a generation ahead of it to benefit from a demographic bonus, namely the best possible relationship between the economically active and dependent strata of people. This opportunity will probably be missed, largely because of the low levels of technical qualification and education among the population, which will reduce productivity gains. These shortcomings should not prevent the Brics from gaining greater relevance, which they will through their heavy demographic weight and growing consumer market, with

the possible exception of Russia. But they will be unable to reach the levels of technological excellence of nearly all of the countries of the advanced capitalist world. Once again, the exception should be China, which will reproduce Taiwan and South Koreas technological performance with surprising rapidity. In the case of liberalizing capital movements and trade policy, Bric approaches tend to vary, although tending towards the adoption of a pattern more propitious to those countries international economic integration. This is in contrast to the restrictive policies adopted by all of these countries less than a generation ago. The most important ruptures took place, obviously, with the two socialist giants, as in contrast Brazil and India were on the edges of a capitalism characterized by an overwhelming state presence. These latter two countries were founding members of GATT and were there at the very start of the Bretton Woods institutions, without having to necessarily take on their prescriptions for economic policy. China and Russia joined the IMF and IRBD as soon as they overcame ideological restrictions to these symbols of the capitalist world, but the process was more complicated in the trade sphere. It took 14 years for China to be admitted to GATT, something that took 6

place only just before the Doha Round (2001) began. It still maintained some practices at odds with normal trading relations. Russia, while politically accepted into the G7 and fully recognized as a market economy since the Kananaskis (2002) G7 summit, has been unable to meet the demands required to be accepted into the multilateral trading system. Neither does it appear close to entrance into the Organization for Economic Co-operation and Development (OECD). Its recent resumption of a muscular foreign policy could push it even further from these organizations. Over the decades, Brazil and India have maintained the typical pattern of developmentalist policy prescribed by Keynesian economists like Raul Prebisch and Gunnar Myrdal. This meant a lot of monetary profligacy, exchange restrictions, trade protectionism, and discriminatory measures against foreign investments. These policies began to change at the end of the 1980s and the start of the 1990s. The countries still have a defensive trade policy in the industrial area but, thanks to information and communications technologies, India has opened up its service sector, while Brazil has proved more hands-on

in combating farm subsidies and protectionism (which should include Brazils G20 allies China and India). The monetary, trade and foreign investments policies of the Brics are as varied as their forms of global insertion, but the results are reflected in current accounts. Brazil came out of a quite fragile situation between the second half of the 1990s and the beginning of the 2000s which prompted it to seek preventive financing through three agreements with the IMF (1998, 2001 and 2002) into a relatively comfortable international position of foreign reserves higher than foreign debt. With its huge trade surpluses, China is on the way to further record currency reserves, and should remain as a dynamic exporter in the foreseeable future. Russias trade surpluses are either growing or comfortable, but its structural position is fragile due to its dependency on oil and gas. Indias deficits, despite rising, are manageable in relation to its also growing economy. All those scenarios should suffer the impact of the international financial crisis started in the U.S., but emerging economies are expected to maintain a higher rate of growth than those of OECD group. 3. What will be Brics future impact on the global economy?

The justification for the Bric acronym, according to its original proponent, is the extent to which these economies have an impact on the global economy, as well as their capacity to shape the future of other developing nations. Barring Brazil, with very modest 7 growth rates over the last years, the three other Brics have been gaining weight and importance globally and within sectors. In theory, in a few years the Brics will represent a fifth of the global economy and in two decades will overtake the G7. This aggregation of individual volume might make sense in this type of intellectual exercise, in which arithmetic seems to prevail over politics. However, it is unlikely to indicate global economic development trends, as these are caused by technological transformation and capital, scientific and strategic information flows as shown by the history of capitalism. In fact, given their demographic importance and the growing dissemination of technology and direct investment, we could say that developing countries share in global goods and services exports and GDP will certainly rise above current levels. This is an elementary conclusion that adds nothing to the other aspects especially institutional and

political that interact with the structural forces that shape the global system. Basically, despite the Brics decisive economic impact, this feature by itself says nothing about the other factors behind a complex relationship that goes beyond GDP and exports, and into reciprocal interdependency not between the Brics but between each of them and their various economic partners. From this point of view, the Brics group do not have an economic existence per se and is purely a creation of the economic spirit. Despite arguments about the decoupling of the main emerging economies from the G7 and other developed nations economic cycles, the truth is that the dominant economies impact on Bric is more decisive than normally admitted. It is not only about consumer markets and direct investment sources. The global economy is not just an economic space for the exchange of goods and services, where each nation can have greater or lesser physical interaction. It is, essentially, an arena for the exchange of ideas, in which the intellectual domination of the so-called developed Western world looks set to remain throughout the foreseeable future. When we look at the overall picture for the global economy, we reach an inevitable

conclusion: the same forces that have transformed the world since the 16th century are still shaping the contemporary world. These forces include not only the flow of goods and services, but forms of economic organization and above all, the production of ideas and concepts to support those physical flows. Therefore, it is inconceivable to consider that developing or emerging nations could be independent from the core of the global economy. The path and economic destination of the Brics and other emerging economies cannot be different from those followed by developed nations. The latter set the basic parameters on 8 which the economy is based. However, this dynamic process is not exclusive to a specific center, but shared by several centers producing and spreading ideas and practical knowledge. The apparently novel concept of Bric is a trouvaille that has occupied journalists minds and instigated the imagination of academics in their search for new ideas. This concept seems to induce those concerned with the old hegemony to seek a rupture with and the replacement of an old system. It is historically rare to have peaceful attempts to change the balance of world power, as the beneficiaries of the status quo tend to resist the contesters

demands for a new space in the old order. If these expectations are not met, the new contestants could opt for changing this order by their own initiative hopefully through peaceful ways, but if necessary, they will try through violence. Once the fascist contesters of the inter-war period were contained, defeated and radically transformed, the geopolitics of world power began, as of 1947, to be dominated by Soviet expansionism without direct confrontations with the US. Conflicts took place often via proxies, with each side advancing and retreating in peripheral arenas where the crucial aspects of the great game were being played. This Third World War ended without the conservative hegemon winning a victory; the defeat of the economically weaker side was actually brought about by the implosion of a senile socialism that was incapable of competing in terms of productive efficiency. After the USSRs spectacular demise and in a moment in which the US emerged as the only superpower, the world seems to be moving towards a transition. This new stage sees the US decline and Chinas ascendance, the reaffirming of Russias strength or the emergence of new players (India, Brazil, the European Union), which could redistribute the cards in new strategic scenarios.

Whatever the future of global geopolitics in the 21st century be it a new Cold War of a Cold Peace it has nothing to do with being a member of a group invented by an economist, even though there might be conflicts generated by some of these members candidacy as emerging global powers. The Brics situation is accidental and fortuitous, whereas being a global emerging economy is a structural condition that was acquired by a long and slow process of productive and technological qualifications that will naturally convert into military and political power. Brics two former socialists have authoritarian characteristics that represent a legacy of centuries of totalitarian states. The other two members have had democratic trajectories with faults in terms of functioning and social justice and are the market economies closest to capitalist organization patterns. Of all the members, Brazil has the most advanced capitalist structures and the most modern society. It is also the most integrated society in language, 9 cultural, ethnic and possibly religious terms, which in principle enables a more efficient political administration - without institutional ruptures - and more favorable conditions for

modernization. Although social democratization can slow growth and adaptation to new environments, it also contributes to greater cohesion around national goals. The main issues dividing the world today are no longer ideological, as they were less than three decades ago, when competing projects were trying to win peoples hearts and minds. Neither are they technical, as there seems to be reasonable consensus and collaboration among the worlds researchers and scientists about the challenges of medicine, physics and biology. Todays main dilemmas are about political priorities and alternative economic measures to be chosen by heads-of-state for solving the age-old problems that afflict mankind: hunger, unemployment, health, education, security and welfare. Experience in the recent past about these choices and attempts to impose them on whole societies in an authoritarian manner, does not reflect well on some of the solutions proposed by radical challengers to the status quo. We do not have to go back to the terrible example of Nazi Germany or militaristic Japan to conclude that emerging powers tend to be hasty competitors ready to use violence if necessary to challenge the power of older hegemons. That History lesson must have been learned, however. Let us hope this time it will be different.