BRIC Set for Name Change as it Prepares to Welcome New Members

By: Pravda

BRIC - the organization that unites Brazil, Russia, India and China - may soon change its name as it prepares to welcome another member - the South African Republic, the most developed country on the African continent. The organization has accepted the bid from South Africa's President Jacob Zuma; most likely, the answer will be positive.

Russia's Dmitry Medvedev said during Jacob Zuma's recent visit to Moscow that it could be possible to develop relations with South Africa via BRIC.

It goes without saying that other countries' intentions to join the organization seem flattering to Russia, as well as to other BRIC members. However, it brings up a logic question: what does South African Republic need from the virtual organization and what can BRIC members gain from cooperating with South Africa? The meetings of BRIC leaders occur on rare occasions. More importantly, those meetings do not decide anything.

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The name of the organization was invented by Jim O'Neill, a leading economist with Goldman Sachs Group Inc., in 2001. The specialist predicted that by 2050 the volume of BRIC economies would exceed the economies of the leading countries in the West and Japan (the Group of Seven).

It is not ruled out that Jacob Zuma hopes to obtain commercial preferences through BRIC membership. As for Russia, it considers South Africa an important and perspective partner. Russian official believe that South Africa's membership in BRIC would be highly productive.

This virtual organization has been more relevant economically rather than politically: it represents cooperation between the world's dynamically developing economies. South Africa has a fast developing economy too, although it can not be compared to the economies of other BRIC members. According to Word Bank estimates, the GDP of BRIC's smallest member - India - quadruples the GDP of South Africa. There are other restrictions, which do not allow Africa's most powerful state reach the level of BRIC members. Human resources is a serious issue, for example. The population of South Africa is three times as less as that of the least populated BRIC member - Russia.

Experts of Russia's Supreme School of Economics believe that one additional member is not going to change anything in the structure of BRIC.

BRIC gathered for its latest session in April in Brazil. The leaders only released a number of meaningless statements and signed a memorandum of cooperation. The document stipulates joint efforts in the banking sphere regarding the issues of financial support in the field of high technologies, innovations and energy saving. The appeals from the BRIC leaders to find a new alternative to the US dollar as a reserve currency still look good only on paper.

The next summit of the organization will take place in China. It is not ruled out that South Africa will be invited for the event too. However, if a new member appears indeed, one may expect other countries to follow South Africa's example. International economists believe that Mexico and South Korea have very good chances to join the organization.

Sergey Balmasov

Pravda.ru

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