IFR COMMENT: BRICS BID TO BASH THE BUCK
Talk of a BRICS development bank is a convenient front for China’s bid to promote its own currency as an alternative to the dollar. Both concepts, however, are flawed, says IFR Asia’s Jonathan Rogers.
International Finance Review, April 3, 2012
The fourth meeting of the BRIC nations drew to a close last Thursday in New Dehli with the usual back-slapping and self-congratulation that accompanies such events once the cocktail glasses have been drained and the limo drivers summoned.
Now enlarged to include South Africa as a fifth initial, it can’t have been lost on any of the attendees that the acronym first dreamed up in 2001 by Goldman Sachs’ then head of research Jim O’Neill (if he’d copyrighted the term and got a royalty from every BRIC conference organised since then, he’d be laughing) has lost some of its sex appeal.
China has dropped its growth target this year to 7.5% and faces a deteriorating demographic that may soon make the days of 10% GDP growth seem like a distant memory. In the meantime, India’s growth has sagged to just over 6% and a host of fiscal and political woes are threatening to squeeze it further.
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