BRIC summit watched for signals on dollar

Russia's finance minister also took a markedly less bullish line recently, saying that the creation of a new reserve currency would require much greater integration of economic policies.

The summit is unlikely to produce any specific results because of deep differences among BRIC countries, which were initially linked together solely because of their fast-developing economies.

While they share a desire to play a bigger role in creating a new global financial order and counterbalancing the West and Japan, their often contradictory interests would make forging a common policy a difficult task.

"BRIC nations are united by their desire to take a more visible role in global affairs," Konovalov said. "They represent a growing part of the global economic potential, but they have different priorities and lack a common economic basis for closer integration."

China and India have sizable labor resources, while Russia and Brazil are rich in natural resources. China is a major consumer of natural resources, unlike Russia and Brazil, which are top producers. While China wants lower oil prices, Russia and Brazil would seek higher oil prices.

"On the one hand they need to cooperate because buyers and sellers need to cooperate, but on the other, their interests at times are set against one another," said Ron Smith, chief strategist at Alfa Bank.

There is also a huge competition among the BRIC nations for foreign capital and investment.

"BRIC is like a reduced model of the world, rich in all its diversity," said Fyodor Lukyanov, editor of Russia in Global Affairs magazine. "They have few coinciding interests, except their striving for a more just economic order."

Analysts have been pondering for years whether BRIC nations could join efforts and replace the United States as the driver of global economic growth. Most agree that however fast growing the BRICs are, their influence is still limited.

"Even together, BRIC is smaller than the U.S. economy," said Yelena Sharipova, economist with the Renaissance Capital investment bank. "They are growing very fast and getting closer to the United States. The developing nations will be biting more and more from the developed economy's pie, but it will take at least 20 years for them to reach the level of the U.S. economy."

1|2

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email