For most of the post-war history, Europe and the United States have led the world in economic development and growth. The American financial crisis in 2008 and the European debt crisis this year has changed the world's financial landscape dramatically. This week, the BRICS countries Brazil, Russia, India, China and South Africa will meet in Washington to discuss a rescue proposal to help Europe out of its debt crisis.

The idea being floated now is that BRICS may use their reserves to buy euro bonds in an effort to ease the debt crisis in the Eurozone. Emerging nations, such as China, have huge foreign reserves and are willing to diversify their foreign holdings. But they need to secure returns on such investment since the world financial markets are now fragile and very unpredictable.

There is one thing that is predictable. The BRICS' involvement in the world economy will enhance confidence within global financial markets. But Europe is too big to be rescued by outside resources. The BRICS will not save Europe. Any action taken by BRICS nations may result in limited and temporary impacts on the European debt crisis. The stock markets may surge on the prospect of the BRICS' possible actions, but the European debt crisis was a long time in the making and it came from domestic and international financial imbalances. These cannot be remedied by the BRICS' sole involvement.

Nevertheless, it seems that the BRICS countries are willing to play a larger role in the world. Not long ago, the BRICS nations challenged the International Monetary Fund's leadership arrangement. The BRICS are seeking to reform the financial regime created in 1945, which they see as obsolete. In the past, there was an unwritten convention between the United States and Europe that resulted in a balance of power between the two. A European has always been selected as the head of IMF, and an American has always been selected as the head of the World Bank. This arrangement has driven the world economy for more than six decades.

As an increasing force in world finance, BRICS countries have a more crucial role to play in the future world financial regime. But there has been no political consensus within BRICS members, which has limited their influence. Every BRICS nation has its own national interests, and there are conflicts of interests between them.

While BRICS countries have seen strong economic growth in recent years, they all face domestic challenges, too. Some of these challenges are formidable. For example, China is facing a disturbing surge in inflation, an ever-increasing income disparity, and growing social instability. The Chinese government may have to focus on its domestic gains while pursuing more globalized goals.

This is a dangerous time for global finance, so BRICS nations should expect more challenges ahead before really taking the lead within the global financial system. There is little doubt that the BRICS will be involved more in world's economy, but, at the same time, we must expect them to face more challenges, too.

The author is a columnist with China.org.cn. For more information please visit: http://www.h5a3.com/opinion/zhanglijuan.htm

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