BRIC (an acronym for Brazil, Russia, India and China) will be involved in global economic decision-making, yet they will pose no threat to the West, said Howard Davies, director of London School of Economics and Political Science.
One important change agreed at the G20 summit in London is to bring the four big emerging markets, the BRIC nations, into the main decision-making parties for the world economy, Davies told Xinhua in a recent interview in the northern Russian city of St. Petersburg, where he was attending an international economic forum.
Davies said he is in favor of the change because, in his view, the financial structures of the world need to reflect the changing focus of economic and financial power, which "has moved eastwards in recent years."
The four countries, however, are in rather different positions. Brazil and Russia are not yet very well integrated into the world financial system, and India is beginning to be, said the director.
China has gone further in this regard because it has a number of big commercial banks, which have already operated internationally on quite significant scales, he said.
Davies ruled out the possibility that BRIC will form a common financial center, saying such a financial hub simply makes no sense. But China is the one with the potential to become a big regional financial center, he said.
The scholar said BRIC will not act collectively due to their various interests and different economic styles. "China is mainly a manufacturing economy, Russia is primarily a commodity-based economy, India is primarily a service-based economy and Brazil is a bit of a mixture."
"They don't have very many common interests except that they are rapidly growing countries," Davies said. As their economies grow, they will find that they have more common interests with other countries in the world than they have with each other.
Similarly, "BRIC itself will not play a role." Individually they will take part in rebuilding the world financial architecture and play important roles in the future, but they will not operate as a bloc, he said.
(Xinhua News Agency June 15, 2009)
