Emerging BRIC powers and new world order

REUTERS - Brazil, Russia, India and China -- the so-called BRIC group of emerging
powers -- have gained clout over the past decade as their economies grew faster than those of developed countries.

BRIC leaders have held two summit meetings, one each in 2009 and 2010, to discuss the global financial crisis and reforms to the world's financial and trade institutions.

Here are some facts about the BRIC countries.

* The term BRICs was coined by U.S. investment bank Goldman Sachs to describe the four key emerging economic powers, which the bank predicted would account for an increasingly greater share of the global economy.

* Together they accounted for about 22 percent of the world economy in 2008, up from 16 percent a decade earlier, based on the widely followed measure of purchasing power parity.

* Real economic growth from 1999 through 2008 averaged 9.75 percent in China, 7 percent in both India and Russia, and 3.3 percent in Brazil.

* The global financial crisis led to a sharp contraction of the Russian economy in 2009 and a small contraction in Brazil, while India and China remained on a robust growth path.

The Organisation for Economic Cooperation and Development expects the four economies to power ahead in the coming years.

Some economists believe the BRICs are now at risk of overheating and asset bubbles due to heavy fund flows into high-yielding emerging markets.

* China held $900 billion in U.S. Treasuries at the end of April, according to U.S. Treasury Department international capital data released on June 15. Bankers say China's total holdings of dollar-denominated assets are much greater, accounting for perhaps two-thirds of its official currency reserves. These came to $2.45 trillion at the end of March.

* China's economy grew 8.7 percent in 2009 thanks to a record surge in bank lending of 9.6 trillion yuan ($1.4 trillion) orchestrated by the government to support its 4 trillion yuan ($585 billion) stimulus package, which is being spent mainly on infrastructure. Average growth for 2010 will be even stronger after a brisk start to the year, though the economy is gradually losing momentum due to government steps to rein in bank lending and cool the red-hot property market.

* Brazil, already an agricultural and mining powerhouse, could become a major player in the world energy market after finding huge deep-sea oil reserves. It is the only BRIC country without nuclear weapons but it has the capacity to enrich

uranium. After a five-year run of rapid growth, its economy slipped into recession in early 2009 but has rebounded and grew at a brisk 9 percent pace in the first quarter of this year.

* Russia, the world's largest oil and gas producer, fell into its worst recession in at least a decade last year but the economy is expected to grow by around 4 percent in 2010 helped mainly by a recovery in oil prices.

* India's economy is expected to grow at least 8 percent this year, boosted by consumer and government spending, but it faces inflation, driven by high food prices, that exceeded 10 percent in May. It faces potential trouble from domestic militant groups and a long-running border dispute with Pakistan.

* The BRICs want to reduce the world's reliance on a weak U.S. dollar as a global reserve currency; among the options are a basket of currencies or a system of drawing rates. Brazil is pursuing trade in local currency with China, but analysts

caution that Beijing is wary of rocking the boat because of its huge holdings of dollar-denominated assets.

* The BRICs want more representation in the World Bank and the International Monetary Fund. Discussions to change voting power in the IMF are about to get under way in a review that has been brought forward by two years to reassure the BRICs that their concerns are being addressed.

* India and Brazil, along with Japan and Germany, are seeking a seat on the U.N. Security Council but a lack of consensus among current council members has long stalled reforms. The United States wants Japan in the council, but China objects.

* Brazil hopes to forge a common BRIC position on global climate talks but their carbon footprints and resulting negotiating positions differ sharply. Russia, the third-largest greenhouse gas emitter after China and the United States, ratified the Kyoto protocol in 2004 while developing countries are not expected to agree to legally binding emissions targets from 2013.

Sources: Reuters