Brics gathering flexes its muscle

ASIA BRIEFING:A BIG focus of attention here in Beijing this week has been the meeting of the Brics (Brazil, Russia, India, China and South Africa) in New Delhi, as the rising developing nations worked on asserting themselves in a global context.

One thing the group is mulling over is its own alternative to western-dominated lending institutions.

The Brics represent 42 per cent of the world’s population, a quarter of its land mass and 20 per cent of its economy, at about €10 trillion.

It was quite a love-in, and a sure-fire sign the global balance is changing, even if it is a bit early to write America off just yet.

“Brics countries should see their different national conditions and development models as providing an opportunity for them to draw on their strengths and engage in co-operation,” China’s president Hu Jintao said.

The Brics want to make sure their collective voices are heard, although at this stage most smart investors know that you ignore these rising powers at your peril, even if growth is stuttering in some of them, particularly in India.

It remains to be seen whether the Brics go ahead and set up a new development bank to help fund infrastructure projects in emerging markets, a possible alternative to the World Bank.

This would be an interesting challenge to the unwritten rule that the World Bank chief must come from Europe or the US.

The Brics are to report back on the feasibility of such a bank before their next meeting.

It wasn’t just the Brics who were in India last week.

Goldman Sachs held its board meeting in the country in the Taj Mahal Hotel in Mumbai, which was badly damaged during a militant attack in 2008. It was the first time the bank’s directors have met in India, home to 1.2 billion people.