Cementing the brics

Updated: Mar 30 2013, 06:52am hrs
The five countriesBrazil, Russia, India, China and South Africatogether popularly known as BRICS and accounting for about 27% of the global gross domestic product, 40% of the world population and nearly 30% of the land mass, have decided to launch a development bank to finance infrastructure projects in emerging economies at the just-concluded summit in Durban in South Africa.

Trade between BRICS countries is growing and the bloc currently accounts for about 16% of the total world export of goods and services. The share of global foreign direct investment inflows in BRICS accounts for about 18% of the total FDI inflows globally in 2011, up from just 6% in 2000. In 2012, intra-BRICS trade soared to $282 billion, up from only $27 billion 10 years ago. So, pursuing economic cooperation between these countries will be mutual beneficial.

During the summit, the BRICS nations also decided to create a $100 billion contingency fund to tackle any financial crisis in these emerging economies and analysts say the the move is a major win for Indias campaign to reform the global

financial architecture.

During the global economic crisis, BRICS economies used their fiscal and monetary stimulus and contributed to global growth. The slump in global export demand and tighter trade credit affected BRICS countries and exports fell drastically. However, after the global economic crisis, BRICS economies recovered swiftly with the support of domestic demand and considerable fiscal consolidation.