BRICS “needs to find focus again”
Oct. 14, 2016
Some BRICS countries need to find their purpose again, given that some of the economies are weak. So says Jim O’Neill, who in 2001 coined the acronym BRIC, grouping Brazil, Russia, India and China as potential growth powerhouses. South Africa was added nine years later to make it BRICS.
“They need to find their collective purpose and really maintain the collective vision,” the former UK Treasury minister and life peer told China Daily in an exclusive interview to mark the 15th anniversary of the publication of his paper coining the name.
“Brazil, Russia and South Africa are now in recession, with many questioning their BRICS status. Even though they have got problems, they are still key parts of the global economy,” O’Neill says. “They need to be involved in global governance, so the importance of the BRICS is not diminished by the fact that they are in recession.”
The former Goldman Sachs chief economist says: “In the 15-year context, people also need to remember in the first decade since I created the acronym, all the BRICS countries grew much more than I said. So even though Brazil and Russia particularly have been disappointing, the collective size is pretty similar to what I said it would be. Very importantly, so far this decade China is growing by more than I assumed.”
O’Neill believes that China can play a role inside the BRICS bloc because it is so big. In fact, China is twice as big as the other four economies combined.
He thinks that BRICS economies could reinforce practical cooperation by undertaking collective investments in terms of environmentally-friendly and alternative energies, consistent with climate challenges, particularly now that China has signed the Paris climate change agreement.
O’Neill, who has been chairing a formal review of anti-microbial resistance, said BRICS countries could also take a collective position on what they want to do in terms of initiating policy change on the back of UN agreement, especially because they all suffer from the interplay of infectious disease.
The challenges facing the world economies are many, with a lot coming from the developed world, but he said BRICS countries should consider sensible shared infrastructure projects.
“Take China’s Belt and Road initiative, for example, which touches three out of five BRICS countries. One could conceive of all the BRICS countries’ investment banks maybe playing a role in Belt and Road infrastructure efforts. That would be a significant opportunity for them to do things together, which would help strengthen their economies and the world economy.”
This year is a landmark one for China because it hosted the G20 summit for the first time, he said.
“Hosting an international summit is never easy, but I like the focus they brought to try to improve the global economy and global governance. In some way, the best part of the G20 was endorsing China’s status as an important part of the world economy.”
O’Neill resigned recently as a Treasury minister amid reported tensions over the approach to China of the new prime minister, Theresa May, including the UK’s Northern Powerhouse project.
In the last year he has been involved in building up Northern Powerhouse, with attempts to bring Chinese investment into new schemes.
O’Neill, who was born in Manchester, said he remains passionate about the Northern Powerhouse project and is eager to help that continue.
He also hopes the Sino-UK relationship will not change under May’s leadership. “Obviously I played my own role in developing the so-called golden relationship, which is very exciting, and I think it is very important for the UK, especially post-Brexit, that we develop stronger trade links with key drivers of the world economy, and obviously China is one of them.”
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