Despite global downturn BRICS remains economically resilient
Following the recent economic contraction in some countries of the BRICS - Brazil, Russia, India, China and South Africa, the argument that the association of large emerging economies is faltering is prevailing again.
In the current climate of global economic fragility, the BRICS has encountered many difficulties in development. But the rhetoric that the BRICS is declining has overlooked the favorable factors for the long-term growth of these countries and tried to play down its role in global affairs on the mere basis of its economic slowdown.
Economic growth is not the only foundation for cooperation between BRICS countries. In an ever-evolving world, the rise of emerging economies is a historical trend that will remain significant. Developed nations also need the vast market of emerging economies, though they may, at the same time, want to prevent a rival political group coming into being from the latter. attempting to regain dominance of the world economy through reindustrialization, which may reshape the globalization process. Take the United States as an example. The contracted growth in average real wages and widespread automation has boosted productivity in the country and reduced its production costs, pushing the return of manufacturing jobs. Additionally, large U.S. multinational corporations are constantly innovating their competition strategies and entering emerging industries to maintain their global leadership.
Furthermore, other emerging economies have grown rapidly in recent years. Mexico, for instance, is rising to become the world’s new factory, taking advantage of its large working-age population, favorable location next to the huge U.S. market, as well as its membership in the North American Free Trade Agreement.
To cope with the global financial crisis, BRICS countries have without exception adopted powerful stimulus measures, helping them to survive the toughest time. However, these measures have, to some extent, stifled enterprises’ operation, harming long-term economic development. For example, Brazil lowered its benchmark lending rate 16 months in a row, which dealt a heavy blow to Petrobras, a semi-public petroleum company accounting for 10 percent of the country’s economy.
Before the global financial crisis, the national security spending of BRICS countries was comparably low since the situation in their vicinity was relatively stable. However, the post-crisis security environment around the world has worsened remarkably due to intertwined traditional and non-traditional threats as well as the combined influence of state and non-state actors (such as Al Qaeda and the “Islamic State” extremist group) on global affairs. The escalation of strategic competition between major powers has not only complicated some hotspot issues but also threatened the stability of the existing international security system. If this situation remains unchanged, the global economic recovery will become more difficult. For example, Russia has been involved in wars in Ukraine and Syria since the end of 2013, ballooning its military expenditure to $66.4 billion in 2015, its highest in the past decade.
Despite all that, the future growth potential of BRICS countries is still strong. There have been efforts to adjust their economic structures to create new drivers of growth. All of them are seeking to forge new competitive edges in highly value-added fields through increasing