On April 14, 2011, Chinese President Hu Jintao and leaders from Brazil, Russia, India and South Africa (countries now known as the BRICS) met on the far southern Chinese island-province of Hainan Island.
The most telling result of the summit was the decision to refuse mutual payments in US dollars. This means that the BRICS countries will give credits to one another in their national currencies and the development banks of these countries have signed an agreement about a further gradual withdrawal from loans in American dollars.
The move opened lines of credit in these countries national currencies in order to dilute their overreliance on the U.S. dollar as the BRICS seeks more independence from American political influence.
In addition, China and India agreed to reestablish defense ties and initiate closer border cooperation. China also agreed to deepen its “strategic partnership” with Russia. The biggest gains to come out of this summit may be the BRIC access to Africa due to its newest member, South Africa.
The BRICS nations now accounts for over 40% of the world’s population, but only 18% of its GDP in 2010 and the IMF says the BRIC nations will account for 21.6% of the world’s GDP by 2015, while the International Business Times reports that these nations are expected to represent 47% of the world’s GDP by 2030.
Aljazeera English says, “While many developed nations are struggling with the aftermath of the global recession, the economies led by the leaders of the BRICS nations are still booming.”
We often hear that the United States has the largest GDP in the world, which was $14.72 trillion in 2010 with a labor force of 154.9 million as estimated by the CIA World Factbook.
The CIA World Factbook listed the European Union (probably due to the Euro) as the world’s largest economy at $14.89 trillion with a workforce of 225.2 million (2009 est.).
When we combine the GDPs and the labor force of the BRICS nations, we see a combined GDP of $21.079 trillion and a labor force of almost 1.5 billion people. If the BRICS developed a standard currency as the European Union has done that would create the largest economy on the planet with largest work force.
The BRICS is also calling for a greater say on the UN Security Council, which only China and Russia have a permanent seat on now.
Goldman Sachs investment banker Jim O’Neill to highlight Brazil, China, Russia and India’s similarities in terms of their potential for development and growth, created the term BRIC. South Africa was not a member at the time.
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