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The BRIC summit is raising new opinions and a clutch of analytical perceptions. The latest is whether the heads of state from Brazil, India, China, and South Africa would harp on creating a common currency for the bloc, which, as many feel, is set to expand its base in the coming days by inducting more members.
The BRIC summit is raising new opinions and a clutch of analytical perceptions. The latest is whether the heads of state from Brazil, India, China, and South Africa would harp on creating a common currency for the bloc, which, as many feel, is set to expand its base in the coming days by inducting more members. A section of some analysts and policymakers feel that such a move would increase the intra-trade. And yet, there is no conclusive proof that such a move would lead to that result.
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Shreds of discussions at both the Forum and the meeting of the heads of state are suggestive of that thinking. For Instance, South African President Ramaphosa has stressed predictable payment systems and smooth operations of banking systems to expand the base of intra-regional trading and also to facilitate supply chains, tourism, and financial flows. That seems to have been endorsed by China while maintaining that the bloc has to cooperate financially with each other.
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President Xi Ping stressed that it was necessary to bring more certainty, stability, and positive energy to the bloc. He also underscored the need for deepening business and financial cooperation to boost economic growth. How India and Brazil respond to such a step is something to be debated. Analysts feel that the creation of a common currency for a bloc separated by long distance and geopolitical cleavages, particularly between India and China, creation of a common currency would be a far-fetched idea. Will that help all countries in the bloc in the same way? Opinions differ. Many feel China would be a major beneficiary of such a move with its somewhat opaque system of financial management and more importantly its strong positive trade flows between the countries in the bloc.
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The ground report is that South Africans are elated about hosting the BRIC Summit, which has attracted a lot of media and diplomatic attention because of various developments surrounding that. The question of Russian strongman Putin attending the event physically has raised worldwide curiosity. Another issue that people are still looking at is an enlargement of the bloc with the induction of new members. What could embolden the embers to go for more positive steps is the phenomenal increase in the intra-trade of the bloc. The figures were below 10% when the bloc was conceived, which has now grown to over 30%. If more people join the bloc, many speculate that the intra-trade can easily grow to a substantial percentage provided members decide on cutting the tariffs.
