Bric summit: Russia is hosting a Bric conference in Yekaterinberg. Top people from the B, I and C of the group–China and Brazil presidents and India’s prime minister–will be there. The guests have much to learn from each other. A combination of Chinese manufacturing, Indian democracy and Brazilian resources and monetary policy would be a world-beater. Tough to see where Russia fits in, though.
In term of trade, China is the only Bric member which is a top-five trading partner for all the others. That reflects the single-minded Chinese focus on investment for manufacturing productivity growth. The others, whose industrial sectors are patchy, would do well to emulate.
India has the longest and deepest democratic tradition of the four BRIC members. Over time, truly democratic governments are best placed to keep a changing country unified. Russia and China could take note. It also has an IT sector that is second-to-none and excellent capabilities in internationally traded services, a growth area.
Brazil has a record of monetary caution that could usefully be copied by China, and of a fiscal restraint that India could usefully follow. It has also been highly sophisticated in its development of natural resources. Iron ore, for which China is a huge customer, gets most of the headlines. But Petrobras’ offshore petroleum operations are efficient, and the sugarcane-based ethanol program is highly lucrative with oil at $70-a-barrel–a fine example to the Brics, and to the US.
Then there’s Russia. It has too often used its huge oil and gas resources as a political weapon, frequently with scant attention to the law. Resource stewardship has been poor, democracy is questionable and the monetary and fiscal policies are lax. While the Russian manufacturing and service sectors have improved, they do not compare with China’s.
All four nations may be able to cobble together common policies to counter the demands of the old rich nations on trade and currencies. But it’s tough to avoid the conclusion that Russia belongs to the group only because of a neat acronym from Goldman Sachs.
